Sustainability edition II
Daniel Hanna Global Head, Sustainable Finance
2021 has started with positive news on climate despite the difficult backdrop of COVID. The US re-joined the Paris Agreement to keep global warming well below 2 degrees and more than 100 countries have now pledged to net zero by 2050, which means they will emit no more CO2 than is removed from the atmosphere. This follows China committing to become net zero by 2060 last year. These commitments, if they happen, will help slow global warming over the coming decades. However, commitments are the easy part. Moving from words to action will mean transforming every activity in modern life and every sector of the economy. Rapid action is needed to make meaningful progress on reducing emissions and also ensuring progress towards lifting living standards and achieving the UN Sustainable Development Goals by 2030.
In emerging markets, governments still need to attract international and private sector capital to help fund their sustainable development requirements. We believe that capital is not flowing into these markets, where it matters the most, and where it can have the most impact. For instance, a solar energy investment in India will help avoid over 7 times more CO2 than one in France.
Looking at our $50 Trillion Investor Panel’s investment in SDG 7 (affordable, reliable and sustainable energy for all), there is a gap of USD3.5 trillion to reach the private-sector investment required over the next decade. This means that in these countries, there is an opportunity for both the public and private sector to collaborate towards driving capital towards sustainable development such as roads, buildings, energy and water projects.
Our research also shows that global investors are generally underinvested in emerging markets, with at least two-thirds of their AUM (assets under management) currently invested in developed markets despite the fact that almost nine out of 10 global investors have seen their emerging-market investments match or outperform those in developed markets. The articles we have collated in this edition of Bankable Insights reflect many sustainable development opportunities across emerging markets.
This edition of Bankable Insights focuses on the opportunity for individuals, corporates and institutions presented by the shift towards sustainability. We look forward to hearing your thoughts on the articles and working with you to deliver the ideas presented within them.
