Green Finance, Member Exclusive

Green Finance Briefing: Burning for change

  • The heat wave that hit Europe proves once more the urgency of the climate crisis, and that we all need to collectively and proactively work towards investing in solutions.
  • Join us on Tuesday, July 26 at our Banking on the Planet conference, where we'll discuss how the banking and finance industry can start its sustainability journey.

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Green Finance Briefing: Burning for change

Extreme heat is breaking records all around the world, inflationary headwinds cloud global economies, the war in Ukraine doesn't look like it will stop anytime soon, and an energy crisis waits around the corner. It’s hard to pick a battle these days when so many things are out of our control. 

This year has been a lot, and we’re only halfway through. A story of conflict and stress, unearthing our incapacity to realize the change that’s needed for us to thrive – time and time again, it seems like we choose to prioritize immediate gains and personal ideals, to the detriment of the wider community.

Maybe it’s this heat getting to my head, as I live in Europe, which is now experiencing record temperatures. But I hope that this wave proves once more the urgency of the climate crisis, and that we all need to collectively ask ourselves if our habits, lifestyle, and jobs are sustainable or if they contribute in any way to a livable future. 

“Half of humanity is in the danger zone, from floods, droughts, extreme storms and wildfires. No nation is immune. Yet we continue to feed our fossil fuel addiction. We have a choice. Collective action or collective suicide. It is in our hands,” said UN Secretary General Antonio Guterres at a recent event.

Guterres will most likely go down in history as one of the most passionate and influential climate advocates. He was a key ally at last year's COP26, where countries agreed to come up with national plans to reduce greenhouse gas emissions, called nationally determined contributions (NDCs). 

However, nobody seems to be doing their homework – “I don’t see that many new NDCs on the horizon, frankly,” said Frans Timmermans, the vice president of the European Commission.

Given the current geopolitical and macroeconomic situation, prospects for the next conference, COP27, which will be held in Egypt later this year, seem increasingly desolate. Egypt was supposed to set an example with their NDC as a host nation, but the plans it submitted were below expectations. 

We need to be brave now, because it will only get harder the more we delay and deny. We need to think about how we can contribute to solving this problem – there are many solutions, and they already exist. 

In light of this, here at Tearsheet, we try to do our part in our little corner of the world, together with our audience. Next week, on Tuesday, July 26, we will be hosting our inaugural Banking on the Planet Conference, to talk about such solutions and bring together the minds fighting to do the hard work that’s needed. 

If you want to join us on this journey, make sure to register and tune in to our sessions. We're all in this together, and as Guterres said, it’s in our hands. 

Chart of the week

Earlier this month, the European Central Bank carried out its 2022 climate risk stress test and found that 60% of banks do not yet integrate a climate risk stress-testing framework into their work.  

The biggest challenge outlined in the report was data gaps, especially when it comes to reporting emissions. This drove banks to opt for an extensive use of proxies, especially in Scope 3 emissions, which can lead to diverging results.

“Banks need to invest more in climate-relevant data collection and become less dependent on the use of proxies, particularly in view of possible developments in climate risk disclosure regulations. The ECB expects banks to step up their customer engagement and make significant progress in developing data infrastructures that allow for proper counterparty assessments,” the report said. 

Quote of the week 

“Climate change has already been addressed. We have all the technology. We have all the people. We have all the money. We just need to distribute the right resources to the respective problems. If we have been so successful at creating climate change, surely we can be even more successful at addressing it.”

  • Lubomila Jordanova, CEO and co-founder of Plan A

What we're writing

It's digital, but is it green? The effects of payments on the environment, in 4 charts

Payments won't be green until we tackle the emissions inherent to the smartphone industry. In 2021, the e-waste generated globally weighed as much as the Great Wall of China.

The culture shift needed for the banking system to focus on climate risks

Employees often wait for top-down guidance on climate issues, but there are also many banking professionals fighting for change inside their institutions to address this.

Greenwashing on Wall Street

Regulators are cracking down on misleading claims at big banks, signaling that they’re paying close attention to the wave of greenwashing happening in finance

What we’re reading 

Net zero climate target could fail without more copper supply 

Shareholder ESG support down but not out, researchers say

Alarm as fastest growing US cities risk becoming unlivable from climate crisis

Climate emergency is a legacy of colonialism, says Greenpeace UK

Climate Risk Stress Test 2022 – are our banks ready?

BlackRock tilts the tables on ESG toward value stocks

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