“Before I introduce the new Green Finance Institute that we are launching at today’s summit, may I say what an honour it has been on my first day in this new role to spend time discussing climate leadership with such an inspiring and extraordinary role model – thank you again President Mary Robinson for that opportunity
“Looking back at my first day in my last job, it is almost 20 years ago that I started a career in banking at Barclays.
“Having studied physics prior to that, on day one I didn’t know the difference between an investment bank and a post office so on arrival I was presented with the definitive textbook for first year bankers, ‘An Introduction to Global Financial Markets’ by Stephen Valdez, and was duly dispatched onto what I seem to remember was a pretty intensive training course.
“In preparing for my remarks today, I looked back at my notes taken from that textbook on that very first day working in finance where I had written “The purpose of the markets is to facilitate the raising of capital and match those who want capital (the borrowers) with those who have it (the lenders)”.
“Now while that is a perfectly accurate description of HOW the markets work, I no longer believe that to be their purpose.
“So today, on day one of my new job, I’m updating my notes “The purpose of the financial markets is to facilitate the movement of capital towards meeting the needs of society”.
“As the impact of a rapidly changing climate system is moving from scientific consensus to increasingly observable reality, arguably the most urgent need of society is to mobilise capital with pace and at scale to finance the domestic and global transition to a zero-carbon and climate-resilient future.
“This transition will be a monumental undertaking. It will be the single greatest social and economic transformation in human history. It will impact every sector of the economy and it will require the reallocation of trillions of pounds of capital.
“Sadly there is no graduate textbook on how we do this. The world has never undergone a zero carbon transition.
“Which is why we need to collaborate to figure out the way forward. We need to harness the innovation, the creativity and the skills of financial services to work with the policy makers, the regulators and with business to co-create the conditions needed for financial services to channel capital towards decarbonisation and resilience
“It is in order to lead these collaborative efforts that we are launching the Green Finance Institute today. We are an independent company, initially supported by seed funding from HM Treasury, the Department for Business, Energy and Industrial Strategy and our hosts here today, the City of London Corporation.
“Initially funded by government, led by financiers, the GFI will be the principal forum for public and private collaboration in green finance.
“Our overarching mission is to accelerate the domestic and global transition to a zero-carbon and climate-resilient economy through mobilising capital.
“To do this we will focus on four specific areas, as colourfully depicted by these concentric circles.
“First, the crux of our strategy, is to convene and lead mission-led coalitions to structure and scale green finance solutions.
“We will bring together extraordinary and diverse groups of global experts across public and private sectors, academia and civil society to unlock barriers to the deployment of green capital, by looking at both supply and demand drivers.
“We will focus on well-defined, real economy outcomes, building on existing efforts, aligning complementary initiatives all to create new green commercial opportunities for financial services
“We will use the GFI’s unique positioning at the interface between government and private sector to build the solutions identified – championing policy or regulatory developments, commissioning or collating data, developing new products or asset classes, promoting greater education, expertise and awareness.
“Today, we can announce the first three of these mission-led coalitions under the heading of Financing Green:
- Scaling up financial solutions to improve the energy efficiency of UK buildings – working in conjunction with BEIS
- Building capacity and financial instruments to finance resilient infrastructure in UK and overseas – as part of ambitious programme of work led by both DFID and BEIS
- Financing sustainable commodity production across supply chains (as members of the new Global Resource Initiative Taskforce) – championed by DEFRA
“We will be inviting leading financial institutions to co-create revenue generating and profitable solutions with business leaders and policy makers . The GFI is a commercial entity and so there will be a fee structure in some cases for those invited to participate in these coalitions.
“Three other initiatives that we look forward to promoting and supporting to further the greening of finance that we are announcing today:
- A focus on the climate resilience of UK pensions, where we will be working in partnership with UKSIF under the leadership of Simon Howard as well as other aligned organisations
- Actively supporting the regulatory work of the Climate Financial Risk Forum chaired by Sarah Breeden of the Bank of England
- Promoting the work of the Chartered Banker Institute both in the UK and abroad to further green banking education under the leadership of Simon Thompson
“The second area of focus will be to drive the global green finance agenda through international dialogue, partnerships and trade.
“By jointly developing and supporting the UK government’s green finance objectives overseas, we will maintain our focus on efficiently deploying green capital and promoting public-private collaboration.
“It is important that we keep building on the UK’s leading green finance track record, creating a recognised global brand for its leadership and innovation in green financial products as well as green finance policy and regulation.
“Third, we will share and showcase development across all aspects of UK green finance by building an accessible digital platform, the GFI Knowledge Hub, to curate and collate latest development in UK green finance; hosting roundtables, attending and organising summits to raise awareness of green finance best practice across both public and private sectors
“Finally, we will play an active role in supporting the greening of the financial system, collaborating with financial regulators and policy makers to optimise commercial opportunities for financial services arising from regulation and policy developments and aiding financial services with the adoption of new green finance regulation and policy.
“So today we open our doors. The GFI is a collaborative organisation and our success is dependent on attracting partners, sponsors and talent. We want to hear from you if your organisation would like to participate in one of our first coalitions, or if you are a talented, purpose-led individual with expertise in capital markets, corporate finance or trade finance who is interested in one of the secondment positions we will be offering to support our work.
“We want to hear from you on which other real economy, outcomes-focused coalitions we should convene during the course of the year and finally please do get in touch if you’re interested in sponsoring our upcoming roundtables or events.
“You can contact us through our website gfi.green or via email at firstname.lastname@example.org.
“To close, a quote from Governor Carney, which is almost mandatory for any speech on climate finance, from a speech he gave earlier this year in describing the challenge we all collectively face “the task is large, the window of opportunity is short and the stakes are existential”.
“I share President Robinson and Sir Roger Gifford’s earlier optimism and believe that together we, the financial services community, can rise to the challenge.
“The course to a prosperous and sustainable future will require new ways of thinking and new ways of doing but above all, it will require finance to live up to its true purpose.”