Government policies and climate change

Governments worldwide have begun drafting policies which insist on transparency when it comes to how climate change causes potential risks within the financial sector.

As climate change regulations are rolled out, trillions of dollars will be invested in:

  • clean energy
  • climate-friendly technologies

What happens next? The global financial industry needs to shift gear and join the fight.

Global banking pressure cooker: shape up or ship out

When the values of society expect a certain outcome, public policy leans that way too. Consumption takes a different direction, which has the potential to change risk into opportunity.

Climate change is set to have a significant and lasting impact on economic growth and prosperity. Financial markets have tended to shy away from the risks but can no longer do so.

It’s staring us all in the face. Banks and other financial institutions need to come to the party.

Central banks and climate change: opportunity amidst crisis

Society relies on a positive ripple-effect which must start from the top down – and the world’s largest financial institutions are stepping up. If they don’t, they will become obsolete. They need to face the writing on the wall and turn crisis into opportunity.

What steps are needed to reach Net Zero by 2050?

These are some of the critical questions being asked:

1. How do financial institutions handle rising inflation and interest rates, if the cost of food keeps increasing due to, e.g. drought and flooding?

2. How can we show economic growth if emerging markets see a decline in productivity due to extreme heat and other climate impacts?

Major central banks are responding to pressure from investors, realizing that there are opportunities knocking on their door. These opportunities lie in low-carbon products and the companies who produce them.

Which traditional banks are playing the long game?

Some of the key players putting their money where it matters include:

  • JP Morgan Chase – pledges to invest $1 trillion worth of climate efforts over the next 10 years
  • Bank of America’s climate finance target is $1 trillion by 2030
  • The Bank of England has set up the ‘Future of Finance’ project to look at how financial services might evolve, and what this means for those who use and regulate them

Show us the money: keep investing in clean energy

The financial industry must re-evaluate and rearrange itself to reach the goal of Net Zero by 2050*.

In order for them to do so, global energy systems would need a financial injection of up to $5 trillion annually by 2030! Is this realistic? According to the experts: yes. What needs to take place is solid groundwork for a smooth transition. These steps will bring us closer to the global goal: investment in clean technology which will result in a greener future.

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