Conservation finance: It’s time to see where we are


Helen Avery
Published on:

Sustainable finance initiatives are great, but now is a good moment to take stock of the progress on commitments already made.


Being engaged in sustainable finance, you can lose track of reality. At conferences, when new initiatives are being launched thick and fast, it can feel like we are far along the path to remaining within a 1.5-degree warming scenario, or stopping the onslaught of species extinction, or helping three billion people earn more than $2.50 a day – pick your Sustainable Development Goal. 

And then of course, everyone goes home.

The Climate Week and UN General Assembly in September felt particularly intense, bordering on surreal, and several bankers I spoke with made the same observation. 

For one, Greta Thunberg had sailed in – the 21st-century Joan of Arc, sincerely rallying for her peers and the planet they will inherit, only to see her underlying message playing second fiddle to her now celebrity status. 

“Did you see Greta?” echoed across the city from excited adults. 

Greta Thurnberg_300
Environmental activist Greta Thunberg
sailed in for Climate Week

I mentioned Greta to a group of students as part of a presentation on sustainable finance. Their faces were blank – because 16-year-old kids from deep in Brooklyn don’t read the Guardian or the New York Times (or Trump’s tweets for that matter). 

On the finance side, it was equally bizarre. There was what seemed to be a relentless set of initiative launches, doled out with slickly written press releases and fighting for attention. More than one bank launched at least three initiatives that week. 

At the risk of sounding negative, it felt like too much. Too much rallying; too much of ‘yet more commitments’; too much talking about what will be done; too much disparate thinking and slight tweaking of wheels that have already been invented.

There was no pause to take stock of all those commitments that have already been made. 

Reality check

Where are we with those? What happened to that fund you launched last year? And if it’s not working well enough to talk about – well, can we talk about that? Because that may be more helpful than this new initiative you’re keen on now. 

This doesn’t have to be a big PR push all the time. 

But it seems not many of us want to do the reality check.

Personally, I find the reality check grounding. It gives some sense of position. I recently came upon an essay by the Buddhist and former environmental journalist Catherine Ingram called ‘Facing extinction’. It’s as brutal as the title suggests, but its summary of where we are currently – nowhere near where we need to be – was comforting. 

And yes, we can make room for ‘resiliency’ alongside our focus on solutions. And no, this pause to take stock and to put the overly optimistic trumpet down doesn’t lessen the sense of urgency or quash the moral imperative to act. 

The thing most banks grappled with was this one – being transparent on the good and not-so-good-yet – not just producing a shiny CSR report 
 - Simone Dettling, UN Environment Programme Finance Initiative

Rather, being frank and honest about the pace of the situation – a race we are losing – can be calming. It can open the door to connection and therefore collaboration. 

To this point, I was appreciative of the launch of the Principles for Responsible Banking at the beginning of this chaotic Climate Week. 

It had its celebrity moment at the UN signing, but then an entire day was dedicated (at BNP Paribas’ offices) to hearing many of the chief executives of the signatory banks discuss what they plan to do, how they will measure their commitments, publish progress and hold each other accountable. 

There were sometimes 10 chief executives on the stage at a time, not jostling for airtime but actually committed together, delivering their five-minute orations. There was also a lot of focus on transparency – one of the pillars of the Principles. 

Contentious issue

Simone Dettling of the UN Environment Programme Finance Initiative was a sensible voice. After all, she successfully achieved the mammoth task of coordinating the development of the Principles among the 30 founding signatories, which evolved into 130 banks signing up, representing one third of the financial industry. 

In her introduction, she pointed out that of all the pillars of the Principles, transparency and accountability was the most contentious: “The thing most banks grappled with was this one – being transparent on the good and not-so-good-yet – not just producing a shiny CSR report.” 

It echoed the keynote speech of Hiro Mizuno, the CIO of Japan’s $1.4 trillion Government Pension Investment Fund (GPIF), who pointed out that the 3.5-degree increase scenario that the GPIF’s portfolio represents is a litmus test for where the world is. 

Disinvesting would make that number decrease and look better, but, Mizuno argued, it would simply “be passing the ownership on to someone else who cares less about negative externalities.” 

We need greater acceptance of the not-so-good-yet, as Dettling calls it. 

ING’s announcement cut through the noise during the week. It published the first progress report on Terra, an initiative it launched over a year ago to align its €600 billion lending book with the goals of the Paris Agreement.

It shows clearly where it is meeting its targets and where it is not – it is the first bank to do this. That is something worth trumpeting.