Will it take a market crash for investors to move into climate financing?
- Markets have yet to take on board the shift in the world’s financial needs as it grapples with the challenges of the pandemic and climate change
- Financing reforms are needed to attract private-sector assets into long-term public investments in climate change alleviation and other socio-economic priorities
The coming crash in leading stock markets, which will be triggered by upward pressure on prices, wages and interest rates, will leave panicked investors scrambling for cover. There is still safe ground but it involves a leap of faith from short- to long-term investment priorities.
As José Vinals, group chairman of Standard Chartered says, “trillions of dollars of investment are needed” from public and private sources to cope with the fallout from Covid-19 and the existential threat of climate change. But it will require a financing revolution to meet that demand.
Vinals was speaking at the recent Asian Development Bank (ADB) virtual annual meeting in Manila, which attracted politicians, government officials and financial experts from across and beyond Asia, where they reached a remarkable consensus on the urgency of achieving financing reforms.
As a former senior International Monetary Fund official, Vinals symbolises the consensus needed in treating global savings, whether collected by governments or private financial institutions, as a public good when it comes to saving the planet from climate change, disasters and pandemics.