Mobilizing private capital is absolutely essential in tackling climate change. The last seven years have been the hottest on record, and 2021 was the fifth-warmest year, according to the Copernicus Climate Change Service.
Last year we saw more extreme weather incidents, such as the winter storms in Texas, the heatwave on the U.S. west coast and Kenya’s two straight failed rain seasons. The situation is becoming more and serious on a global scale and is happening at a much faster pace than many had expected.
As such, it’s abundantly clear that governments alone are unable to fight the devastating impact of human-triggered climate change. Of course, they must provide top-level funding, but governments are best-positioned to develop, implement and manage policy, incentives, standards, metrics and regulations. Yet, there will be a massive funding shortfall if the reliance is solely on the public sector, particularly as governments are still grappling with the pandemic fallout.
Three Ways to Unlock Private Capital
Consequently, and as a matter of extreme urgency, enabling, unlocking and mobilizing private capital is crucial. And I suggest this could be done in three steps.
First, cooperation is a must from financial advisories, insurance firms, banks, wealth and asset managers, investment companies, fintech groups, banks and auditors, amongst others, to unlock and assemble the trillions of dollars of private finance that is urgently needed. If this doesn’t happen, the necessary funds won’t be there.
Second, a regulatory framework for environmental, social and governance (ESG) investing is now needed on a global scale, to bolster investor confidence and protections further.
And third, all climate risk and vulnerability stats must be made available by governments and their agencies straight away, so as to further boost the case for ESG-led investments.
Last year deVere pledged to place $2 billion of assets under advisement into environmental social and governance (ESG) investments within five years, and we are also one of the 18 founding signatories of the UN-backed Net Zero initiative, the international alliance of powerhouse global finance companies that will help accelerate the transition to a net zero financial system.
Climate Change the Most Serious Risk Multiplier
Of course, climate change is the most serious risk multiplier to our world, to our communities, and to our way of life, and a lack of understanding of the magnitude of the problem will have devastating consequences down the line.
As such, urgent private finance funding is now vital.
Click here for my YouTube, LinkedIn profile and Twitter accounts.
London-born Nigel Green is founder and CEO of deVere Group. Following in his father’s footstep, he entered the financial services industry as a young adult. After working in the sector for 15 years in London, he subsequently spent several years operating within the international space, before launching deVere in 2002 with a single office in Hong Kong. Today, deVere is one of the world’s largest independent financial advisory organizations, doing business in 100 countries and with more than $12bn under advisement. It specializes global financial solutions to international, local mass affluent, and high-net-worth clients. In early 2017, it was announced that deVere would launch its own private bank. In addition, deVere also confirmed it has received its own investment banking license.
© 2022 Newsmax Finance. All rights reserved.