What finance needs is a ‘radical’ collaboration with policymakers
Industry heavyweights gathered in London to discuss the disconnect between investors and net zero policymakers
The financial space needs a “radical collaboration” with policymakers, showing robust language on the phaseout of oil and gas to match the rhetoric towards coal, an industry insider told a London conference.
Rhian-Mari Thomas, chief executive of the Green Finance Institute, said at the Economist Impact’s 8th annual Sustainability Week that “if we rely too heavily on the finance industry to pioneer and lead the way [to net zero] we won't see the acceleration and the transition move as quickly as we need to."
She shared with delegates: "We really do need that policy support to get us there."
Taking part in a panel discussion on financing a greener future, Thomas was joined by James Alexander, chief executive of UK Sustainable Investment and Finance Association (UKSIF), and Adair Turner, chair of the Energy Transitions Commission.
Commenting on the US Inflation Reduction Act (IRA), and the appeal of it to green investors, Alexander said: “The first thing to recognize is the scale [of the IRA] is enormous and the impact that it's having is huge."
He added that "we're anecdotally seeing transactions that have been struggling to get off the ground here in the UK and like hydrogen, that have now just picked up and the whole transaction has moved, with the projects are now being developed rapidly in the US."
The UK needs to do something if we want to stay in the in the race to be the drivers and the leaders of the technology of the future.
Alexander also spoke of more grounded issues than finance holding back green infrastructure projects in the UK, such as a chronic shortage of welders in the country.
Of the Inflation Reduction Act, Turner said: “This will be a bit of a honeypot for some corporate investors. Inevitably within its subsidies there will be some wasted money but overall, it will accelerate America's process of decarbonisation."
"Having this power of innovation and engineering capability and investment behind the energy transition, in a way which wasn't there three or four years ago, is immensely positive for the world. Europe will need to respond.”
On the European side, Turner noted there was already the “stick” of a matured carbon market, which now needed to be made counterpart with the “carrot” of green subsidies that may be made available through the Green Deal Industrial Plan.
UN chief
The sustainability conference was kicked off by the secretary general of the United Nations, António Guterres, who began the event with an introductory address.
“The good news is that a number of companies headquartered in markets across Europe, North America and Asia have accelerated their net zero targets to the [20]20s, 30s and 2040s," the UN chief said.
"They understand that's where the transition will make a huge impact in the climate fight, providing major competitive advantages for first movers," he told delegates.
"Looking ahead, priority number one is the energy sector, by far the largest source of global emissions”, Guterres said.
He also warned of the dangers of inaction, referencing the recent doomsday prophies of a recent IPCC report, which warned the world it is 'now or never' as it is extremely likely the most ambitious climate targets will be missed.
The first thing to recognize is the scale of [the IRA] enormous and the impact that it's having is huge.
Also speaking on the first day of Sustainability Week was Matt Brittin, president for Google in Europe, Middle East and Africa.
His talk, titled “How is AI helping people, communities and businesses in the fight against climate change” contained two new announcements related to extreme heat.
The first was an extension of Google’s Tree Canopy tool to nearly 250 cities globally, including 90 in Europe. Tree Canopy uses AI and aerial imagery to help local authorities identify ‘heat islands’ - patches of a city that are particularly hot because of the surrounding infrastructure - and combat them through tree planting.
The second was rollout of new extreme heat alerts in Google Search. In partnership with the Global Heat Health Information Network, the alerts look to provide people searching for information on extreme heat with information about when a local heat wave is predicted to start and end, tips to stay cool, and related health concerns to be aware of.
Last year, financial services company Standard Chartered hired Kerry Constabile, a former sustainability strategist at Google.
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