 Good morning, good afternoon and good evening wherever you might be in the world watching us here from Geneva in Switzerland and welcome to the third day of the Green Horizon Summit, organised by the City of London and the Green Finance Institute and supported by the World Economic Forum. I'm Dominic Waray, Managing Director at the World Economic Forum. We've heard an array of fantastic announcements and exciting developments over the last two days of this incredible summit and today we'll focus on implementation making things actually happen. The key question for today's discussion is how to implement the commitments and funnel the much needed finance into the net zero economy that we all know we need. We're going to hear from a range of practitioners covering the new generation of asset management, banking, law, audits, big data and professional qualifications that we're all going to need to make this net zero transition a reality and we'd really like to encourage you to ask questions throughout the meeting and we'll have some time at the end to get answers from some of our panellists. So please go to Slido and type in the code GHS2020 to get your question in. That's GHS for Global Green Horizon Summit 2020. So without further ado let's get going. I'd like to go to the World Economic Forum's founder and executive chairman Professor Klaus Schwab for some opening remarks. Thank you. Let me join my colleague Dominic in welcoming you to the third day of the Green Horizon Summit. I'm proud that the World Economic Forum is supporting the City of London Corporation and the Green Finance Institute for this very important meeting. I want to express my particular appreciation to my friend and our member of the Board of Trustees Mark Carney for his pioneering role in green finance and in integrating climate risks into finance. Under the banner of realizing the transition we will spend our time together today highlighting a pathway towards a net zero economy and how to shift investment performance volumes to align with global climate goals. We need collaborative efforts and to recover from the COVID crisis while creating good jobs and setting the world on a path to a net zero economy is our objective. So it's no doubt that finance plays a pivotal role in the global post-COVID recovery and to steer the economy towards a more sustainable world. Over its 50 years of history the World Economic Forum has evolved into the International Organization for Public-Private Corporation. We run a number of platforms and we will focus on the question how we can use those platforms really to advance the objectives of this meeting and here I'm glad that we can rely on three very concrete pragmatic approaches which the Forum has pioneered. First the ESG framework, second the financing and transition initiative and third the future of sustainable data alliance. I'm very pleased to say that we have developed also with the help of the big audit companies Deloitte, EY, KPMG and PWC we have developed a comprehensive system of metrics which allows to walk the talk. To date this platform has been engaging more than 30 financial institutions including banks, investors in jewels and multilateral development banks while partnering with submission possible platform the Energy Transitions Commission and the Rocky Mountains Institute to explore transition pathways with heavy industry and transport sectors. Meanwhile our CEO climate leaders a group of more than 80 companies across sectors have collectively committed to implement net zero targets. Brian Monion, Faikeh, Sibesma and myself equally called upon our members and Zedavo's participants earlier this year to set an example and to set a target to achieve net zero greenhouse gas emissions by 2050 or if ever possible soon on. We need to be courageous in our vision for the future. We need to strive with purpose towards creating the world we would like to see emerging. In the first two days of this summit you have heard announcements on coal phase outs finance readiness and from leaders across the public and private sectors. Today let's focus on how we can implement these bold goals how we can come together across sectors and industries to make this transition a reality and most importantly I encourage you to take action despite the uncertainties despite our concern with COVID presently and we should be always aware the great reset will not necessarily come from top to down it will come from multiplied individual initiatives and engagement. Thank you Professor Schwab for once again reminding us of the two ends the momentum that is taking place and the need for multi stakeholder collaboration. The multi stakeholder collaboration piece means that collaboration both between the public and private sector but also collaboration across industries and professional service firms and this will be a big part of our conversation today in fact our next speaker is a legal professional himself and will focus on how the law can help tackle climate change so I'm delighted to welcome a few words from Jerome Overhand who is the global senior partner at Clifford Chance and I am the global senior partner of Clifford Chance which is an international law firm. First let me thank the City of London Corporation and the Green Finance Institute for inviting me to speak on this morning of the third day at the Green Horizon Summit which today is being hosted by the World Economic Forum. Now climate change is obviously the biggest challenge of our times and frankly time to tackle it is running out. Now the good news is that the number of companies that have committed to net zero targets has increased to threefold in the last year alone and that includes some of the world's biggest players like GE and Apple and the investor community is playing its part too. For example Climate Action 100 plus which represents investors with assets of 47 trillion dollars in value have demanded of the world's largest greenhouse gas emitting companies that they aim to achieve net zero by 2050 at the latest. Now you may wonder what can lawyers do about all this well frankly the laws have played an important part in addressing some of the biggest societal issues of our times whether it's the abolition of slavery the Nuremberg War Trials or the American Civil Rights Act and the law will play a significant role in tackling climate change. As a legal profession we need to take up the challenge and we need to use our skills and experience to together come up with innovative ideas and solutions. It will be lawyers who will shape those laws that we need and who will have to enforce them. Now the laws around climate change are hugely complex and fragmented and as private sector lawyers we often advise clients how to navigate those conflicting rules and regulations across jurisdictions and how to anticipate policy changes including in the area of green finance and increasingly we advise our clients on the transitions to clean energy such as hydrogen but most importantly as lawyers we need to be advocating for comprehensive and cohesive regulations to support the transition to a low carbon economy. The UK's net zero emissions clearly stand out. In 2019 the UK became the first major economy to commit to net zero by 2050 and this fact alone has a major impact on the decisions and the business decisions by our clients globally. Now as the theme of this summit makes clear finance will play a pivotal role in the transition and we see a huge increase in the number of green finance transactions that market has doubled since 2018 and London as a global financial centre is clearly a hub for green finance transactions. Industry bodies like the LMA are also very active and there is clearly a drive towards a common approach and events like this summit over the past few days and also COP26 will clearly help drive us towards a whole economy transition. Now I am a litigator so please allow me to say a few words about litigation. We see hundreds of climate related cases worldwide. This includes cases against energy companies but also cases against governments. So for example in the Netherlands which is a country where I am from the Dutch Supreme Court recently upheld a decision by the lower courts that the Dutch government must significantly reduce its emissions in line with its human rights obligations. Business, governments and civil society need to come together. We need to collaborate to work towards that common goal of a net zero future and as lawyers we obviously are responsible too and that clearly goes beyond our own carbon footprint. We can help our clients move in the right direction. We can help our clients with that transition to a low carbon economy. As lawyers we can help and work together with NGOs to support United Nations Sustainable Development Goals 13. As lawyers we can choose what we support and what we don't support. We do not have to be neutral professional service providers. Laws reflect the values of society and they address the issues of the age and our generation faces the huge and existential threat of climate change. As lawyers we must use the power of the law to deliver a sustainable future for all. Thank you. Thank you very much for those words from Geron Overhand from Clifford Chance. It's fascinating to hear there from Geron about the movement in the market and how the green finance market has doubled since 2018 which takes us very nicely into our first conversation today which is very much in a practical way how to move more of the capital markets into green finance. So to help us explore this question I'm super delighted to welcome Ron Ron Hoa who's the CEO of 91 and the chair of the ESG Leadership Forum. Welcome Ron Ron. I understand there are about 40 trillion dollars of ESG data-driven assets under management today. Could you tell us how ESG works at the moment? Is it helping to drive capital into green finance and what kinds of strategies are being used by asset managers and owners at present? Ron Ron. Thank you Dominic. First I'm not the CEO of 91. You know my boss did speak earlier so I heads up the investment institute. I'm really pleased to be here today. First to answer your question a bit more in details and in a practical way perhaps let's have a little look on the market progress at the moment. First allow me to say congratulations to the City of London Corporation and to the Green Finance Institute and of course to you the World Economic Forum for hosting such a successful summit. I think the summit in itself is a real progress for us all because we see so many mega star industry leaders across public and private sectors actually coming together making really bold statements and commitments but we actually need to make sure those leadership can be translated into the working level. So there are few emerging market consensus actually building up and one of them is actually see that to reach to net zero all of us realize we need a whole economy transition like Mr. Carney has a very well articulated but that represents the biggest commercial opportunities for us all but think about that it's a very profound statement but luckily that the industry has moved beyond the debate but the gap like you said is still very big you know there's a huge gap persistent gap between the net zero ambition and of course the you know the reality so how do we do that you ask the right question we see so many money coming from coming into the ESG related investment but we yet to see new new capital right that is the bottom line you know we see so many asset owners leading the way but the vast majority of asset owners are yet to go on this agenda let's remind ourselves according to the share action that the top 100 pension funds only allocate just little bit more than 1% of their total AUM and this is not just about pension funds though we talk about sovereign wealth funds we talk about developmental capitals and if the summit itself has a one improvement area that is we need to see more sovereign wealth funds coming forward we need to see more developmental capitals community coming forward to have a really concrete action and of course on the asset manager side which we are part of it there's a lot of progress has been done for sure but the numbers are a little bit inflated you know and I think we need to build a very strong culture as an industry to actually reject the boss ticking because you know the frankly the ESG integration which everyone has been claiming it just not good enough or perhaps will become a market norm of course some are doing better than others but you could argue is that are we actually seeing new new capital onto this or is that a purely risk management exercise and that is actually a base to have a very very you know proper risk management as a foundation but ultimately we need to capture the upside which is to have positive actions positive investment to actually allocate new new capitals on this very important agenda thank you very much it's extremely interesting point that you make so if you suggest that disclosure screening and risk management are necessary but kind of currently insufficient what else do you think should asset owners and managers be doing to identify perhaps the opportunities rather than the risks to go to the upside rather than the compliance side and are there things that you are doing with the city of london green finance initiative which are some examples about how to help drive that forward yeah thank you and allow me to make a few comments on the disclosure so we absolutely delighted to see the the monetary disclosure requirement and then that in itself will increase the transparency and the data quality and a lot of people feel like they stuck because they don't have very good information or very good data but the reality is that we are not going to have perfect data you know the society the business the investment industry has been surviving and in fact striving on imperfect data so it's a judgment that we need to apply you know for asset owners and there are a number of tools already out there you know there are some fantastic initiatives like night zero investment framework you know the tpi initiative make my money better and then obviously the summit we saw david blast mobilizing you know portfolio alignment which is a fantastic tool to help asset owners go on this agenda ultimately it's common sense right so we need to have a very clear strategy top down and bottom up we need to build a governance around it and obviously to have target objectives and be ready to report in many ways it's very important that we see that translate into asset class level translate into strategic allocations and translate into company level and then together with the industry debate like the city of london as part of your question the city has been embracing this topic since 2014 you know that was very much uh not early but you know a few years journey and obviously things have moved on dramatically the key work streams that we have been working on covers from a green infrastructure a greening capsule market greening banking and obviously the greening the investor work stream which is the esg working group now formally launched as the esg leaders forum and what we like about the city's proposition is very much focusing on practical area so we actually don't care you know whether you are senior or not which company you represent which sector you represent if you have a good idea we will explore and adopt and the esg leaders forum in many ways is a cross sector collaboration as you said you know one of the key challenge that we all have to overcome is to connecting green finance and green investments with real economy because ultimately we realize that lots of the real economy solutions actually embedded in a ways engineers you know project managers academic and others you know we've been working closely with great companies like arab you know tencent you know we encourage you to coming forward you know ways the city on some they're much needed and to work on some the much needed solutions that are required on this transition journey wrong thank you so much for that these are very practical ideas to explore together the governance issue and that link between the financial community and and the real economy that kind of cross sectoral connect that is extremely interesting and we'll take us into the next angle of our discussion so thank you so much wrong wrong who are the executive director of 91 and the chair of the esg leadership forum so that's a beautiful tea up from wrong there about this next segment and we do absolutely know that we need to accelerate the transition to a net zero economy in line with the Paris agreement or further and we do know that there is momentum on the business side to do this um that the corporate climate target setting has increased 70 percent since 2018 and in fact as you heard from the founder and chairman of the world economy forum of our colleagues at boston consulting group um we've helped to kind of push forward the idea of net zero commitments across uh uh the forum and there's another excellent report by kpmg and ever to ever shed sutherland which we're going to hear about which also sets out how this transition is going it was a survey of 500 global companies michelle davis the head of clean energy and sustainability at ever shed sutherland and mike haze the global head of renewable energy at kpmg worked together on this project and in this next film michelle and mike interviewed the ceo of watzilia yako eskola and jim barry who is the global head of infrastructure about the state of the corporate transition to net zero let's take a look talk to almost any international business and you'll discover a sincere and dutiful commitment to the pursuit of net zero most corporates like most people understand the physical impacts of climate change the medium term climate imperatives are well and widely understood but what about the here and now how are corporates really coping in this new research ever shed sutherland and kpmg wanted to probe beneath the rhetoric and discover the practical problems that boards are tackling they wanted to find out how the biggest institutional investors are truly changing their approach and define the scope for real and meaningful changes to the whole culture of climate risk and disclosure michelle davis of ever shed sutherland and michael haze of kpmg led an exploration with boardroom leaders from over 500 of the world's leading companies what follows is an extract of their interviews real conversations that highlight how ceos are dealing with a stark transition a transition permeating all sectors a transition demanding immediate attention in addition to undertaking the survey we wanted to interview companies sitting within different sectors and we also wanted to interview the people who are providing the capital and who are in the firing line for the new regulation as well as those people who are really at the forefront of influencing and shaping policy one of those interviews was with jim barry of black rock so jim there has been a lot of talk i mean we see it a lot in the press around how boards of companies are responding to climate risk one of the concerns that mike and i had was whether climate risk was really understood and what action was really being undertaken to deal with it would be great to hear what your experiences of this well michelle i think that's a really key question and i think the reality is you have a range of what i would call the internalization of what lies ahead depending on the company you're dealing with i would say that any company that's directly involved in the energy and power sector has finally got it even those fully exposed to carbon like the oil majors now appreciate the world has changed and you can see it in their real strategic dilemma as to whether they try and evolve for the new world are effectively ride carbon out and that's a key strategic choice they'll have to make i think when you move to the the world more generally i think any business and board that has more consumer face and more consumer facing business i think is is much more likely to sort of understand that things are changing because their customers are beginning to demand it and they're attuned to listening to the customer but i would say more generally i would say boards have an intellectual engagement on the point i think they understand it has changed they're reading the same newspaper articles they're hearing the same political pronouncements that the rest of us but i'm not sure generally it's fully internalized i think that's a journey a lot of boards are going to go on over the next few years and i think for a lot of them it's going to be a real challenge because it's going to require a such a dramatic change in thinking as they face up to the full implications of decarbonizing our global economy jim one of the things that really worries me about the climate change agenda is the impact it is having on asset valuations there are assets sitting in investment portfolios across the world including black rocks own portfolios that i know and i think you know are overvalued because climate risk has not been taken into account what does this mean for an organization like black rock as it looks across its own investment portfolio is this a concern for you and what sort of actions you plan to take to alleviate this mike i think the issue of stranded assets is critical and for investors like myself where we have as much carbon exposure as we have renewable exposure you know it becomes the critical issue because i can look at a nasa today um that's you know kind of is carbon exposed like a pipeline say an oil pipeline and maybe i can get comfortable on the back of contracts it has as i look out over the next 15 20 years but the real question is in seven to 10 years time when i come to sell that asset will i have any confidence in the 50 to 20 year cash flows from there and i think that that goes to the heart of the risk you're now taking with respect to investing in what i would call the the conventional carbon-based energy and power sector hello yakko thank you so much for joining us today vortzilla is very much engaged in the climate change agenda both on its own behalf but also with its customers what do you think needs to be done to enable corporates to prioritize dealing with climate risk and what do you think makes a company act quickly or delay acting at the moment what prevents some some from acting or acting quickly enough is is really that i mean there are there are a lot of issues and barriers one is i mean clear signals what is what are the concrete measures and and and it should be done i mean you don't have clear signals what is important and what is not regulation definitely lack of lack of consistency sometimes the regulation is is too slow sometimes it's it's extremely fast and and the ambition levels are are are extremely high i had a meeting with our our finished prime minister where we visited one of the first players in the power to x technologies here in in finland basically creating capturing co2 and creating from air a fuel which can be then used as a as an energy source so this is a carbon neutral process it's a it's a it's a way how to improve the the air inside your house or your office or school so you i mean you if you if you decrease the co2 in in your air i mean you you work better and and and then you create actually free fuel from from air and and this is a this is an example created from from the people reporting to me together with outside startups players university so again cooperation our our people having having the the really the the interest on on looking at decarbonization and and one example again of of how how important and how how great it is to develop these these new new fuels and and the new world corporates are embracing the reality of climate change they now understand that this is not just a nebulous issue this is something that impacts every single business you don't have to be in the fossil fuel sector no matter what sector you're in climate change matters and what i got from this report is corporates have made this a boardroom issue CEOs and other senior executive officers and not non executive directors are taking this incredibly seriously the other message that came through really was that while they're taking it seriously the solutions are not always obvious and there's a lot of work to be done at a corporate level to actually achieve the type of carbon business that they're hoping to achieve over the next 10 years jim and the echo thank you so much for giving us your time today to be interviewed and i think it's pretty clear that without companies an understanding climate risk and in a way that enables them to develop a detailed strategy for making the changes that are required everything's that that's happening now isn't going to have the desired impact this is hugely important and i'm genuinely grateful Mike and i are grateful to you for participating in this thank you the one message i want to give is that there is no vaccine for climate change clearly in recent months there has been a lot of discussion about COVID-19 and the wider climate change agenda let me say one thing COVID-19 although incredibly serious is unfortunately nothing more than a dress rehearsal for climate change the climate change and corporate value report the journey has begun let's take it together thank you so much michelle davis and mike haves for that extremely interesting film and it's clear from that that the climate issue is in the boardroom it's clear that there is a lot to be done and it's clear that this summit is really promoting momentum on that issue we saw Larry Fink's announcement yesterday on the back of the Chancellor now before we move on you will all know that today of course the last day of the green horizon summit is also the 11th of November that is armistice day the day which commemorates all of those who have died in wars around the world we're just after the midday point in Geneva which means we're just after 11 a.m in the UK so i'd like us all to join in observing a minute's silence thank you thank you very much and welcome back to the discussion so so far we've heard about how momentum for the green finance transition is growing among asset owners and managers how what could be done to speed it up and how momentum towards net zero is also picking up amongst industry sector CEOs we're on our way but we're not there yet more needs to be done the importance of deepening the green finance dialogue and action between the finance and real economy sectors seems to be emerging as a key part of this jigsaw so let's take a closer look at an initiative that does just that financing the transition to a net zero future it's a world economic forum project an umbrella project that helps more than 30 financial institutions to engage with heavy industry and transport companies across the world steel chemicals aviation shipping which sectors which account for about 30 percent of the global co2 emissions and together these companies and investors are looking to find new ways to finance the transition so let's hear from a few of the project partners and please join me in welcoming daniel hannah who's the global head of sustainable finance at standard chartered elsa pelanza who's the global head of sustainability and esg at barkley's and shawen kidney who's the co-founder and ceo at the climate bonds initiative welcome to all of you and delighted to have you with us shawen if we can start with you many commentators are saying that the economic build back from covid-19 offers a unique opportunity for a great reset including building a green economy and such like what opportunities for scaling green finance do you see emerging as we recover from the covid crisis shawen over to you well look we've already had the comments earlier on about from jim barry about the extent to which the covid crisis is the understood as a climate crisis which absolutely is so we have to inoculate for worse pandemics going forward which colors have built back better agenda which is very much privy to the case in europe at a regulatory level and also in china and they can begin to be in a couple of other countries but the other thing that it really tells us as we start thinking tough thoughts about emissions reductions is that it's time to get tough on transition we haven't tackled difficult areas we've been tackling the relatively easy areas i mean they looked incredibly tough 20 years ago don't get me wrong energy looked tough but we're winning on energy it's fantastic we're winning on electric vehicles thanks to china largely the cost of electric vehicles is going to plummet in the next couple of years so if we had to achieve our 2030 targets and Ursula von der Leyen is exactly right we need to achieve 55 emissions reductions on night night levels by 2030 to have a chance even a reasonable chance of a future for our kids then we have to tackle the areas like steel like concrete like manufacturing across the board like plastics where we haven't adequately done the work now when i say we haven't adequately done the work i mean is that we need to be looking at 2030 targets not some 2050 target which is currently what we're doing in those industries with a linear trajectory to 2050 in fact what we're being told is the trajectory is a j-curve that we've got to reduce emissions by 7.6 minimum on average every single year globally which is going to require some drastic changes in all the emitting sectors now the money is interested you know with a proof of concept and green bonds and social bonds look at Europe's 14 billion place yesterday so on we know that the money the investment community is really keen for product the subscription levels are unbelievable we simply have to create the right kind of assets that we can fund for these mechanisms and we have to make sure they're consistent for changes so the work to be done and we've already signalled this the EU taxonomy work is transitions why is a transition investment what does it mean for a steel company a cement company an oil and gas company what are sufficient ambitions but necessary to shift that sector how do we judge entity promises when BP promises with its new plan which looks really good that it's going to move to zero net carbon by 2050 is it actually ambitious enough in the context of the Paris Agreement that's the work and that's also the market you will see blooming in the coming year transition investments transition bonds in these kinds of sectors that's super interesting i mean you've been working on the green bonds issue for you know many years and you've been a pioneer in that space and you know we've all been with you and supporting you just this issue of transition and the creation of a transition label is extremely interesting can you just tell us a little bit more like what that means and how you see that particular intervention helping kind of get us through that j-curve that you're talking about if somebody doesn't really understand what is this transition label that you're attaching to finance so we've seen the paper we published in September five principles for transition needs to be followed there are a lot of people who don't feel they've got permission to be part of the green bond market such as a BP and this is a way of giving them permission if they've got the right kind of assets they're funding which it consists of the transition but there's more to it than that which is the entity level i've mentioned principles we've said we've got to be in line of the Paris Agreement right you can't have a transition to nowhere and we all know that where we have to get to is emission reduction to the primary source so in line of 1.5 degrees it's got to be science-based it's not about opinion here it's got offsets don't count in other words you can't buy green energy from from Germany to build a gas plant in Italy you have to actually look at the asset itself or the capex of the company itself we're looking at technical viability we're not looking at political economy because there are so many issues in political economy including the ambition of the regulators here so we're keeping it separate of that and then finally and most importantly we're looking at actions not pledges and that's not a particularly difficult five principles it's a minimum five principles i'd say what we end up having is a labelled bond market we've already got the beginning of different flavored ice cream we've got green bonds we've got blue bonds we've got resilience bonds we've got sustainability bonds new section part of the same ice cream display transition bonds for the difficult areas that we've got to get tough in and and they're going to require a different kind of analysis and different kind of support but it's the same principle it's shifting your money to make a real difference on the challenge of our millennia which is climate change does that make sense Dominic it makes sense to me Sean and I very much like the I think it's going to be the quote of the session so far you can't have a transition to nowhere I think that's a terrific kind of thing to bear in mind Sean Kidney co-founder and CEO of the climate bonds initiative Elsa Polanzak we move on to you of of Barclays Barclays made a bold commitment to align its portfolio to the Paris agreement can you tell us about that and also what you think the financial sector overall needs to do now to drive the transition we heard some ideas from from Sean there but be very interested in your take on that Elsa sure thank you so much Dominic and thank you all to the incredible organizers that have put on such an amazing set of conversations this week I think it's shown an immense amount of progress and a really exciting sense of momentum so yes Barclays did set an ambitious goal or commitment to align the entirety of our financing portfolio to Paris but really importantly we overlaid that with an ambition to be net zero by 2050 precisely because it's about this critical question of how this plays out in the real economy we recognize that we are responsible for our own portfolio and that's a big part of it but we want to make sure that we're also being stewards of the real economy to the extent that's possible and I think this gets into the whole premise around our approach in particular it's basically predicated on the idea that the highest and best position of a bank or use of a bank's resources is to be stewards of that transition for our clients and with our clients and I think there's no doubt we need policymakers to set really ambitious agendas and timelines and really to enable that unlocking private capital but fundamentally there's a huge amount of capital waiting to be deployed and it's just a matter of getting it into the right conduits to make that that change happen and I think Sean got into some of that very specifically when he was talking about the bond market I think it is really exciting to see new instruments being made available and it's just a matter of plugging those in fundamentally this is not about a one size fits all approach and I do have to give credit to the World Economic Forum and the work that you all have been doing around this the financing work around the transition because it's really about partnering as you have done sector leads with financing leads and making sure that we are actually getting into the nitty gritty of what it takes to transition those hard to abate sectors because fundamentally it's going to require slightly different objectives or slightly different approaches depending on what's at stake as Sean mentioned fundamentally we're all headed in the same direction we need to make sure that that North Star is kept in mind but we do need to make sure we're being quite specific about how we get there in our case we're absolutely hearing from clients that they're looking for more and better financing options to make this transition possible and we think that capital markets are critical to ensuring that that there'll be sufficient capital available to actually make this happen and it's really about making sure that those focused mechanisms are made available in addition to our net zero ambition and our commitment to portfolio alignment we set 100 billion green finance commitment by 2030 now I think you're seeing a lot of banks do this fundamentally there's large numbers being lobbed out into the universe and that's great and it indicates the direction of travel but the really important thing here is not just can we one up each other with big numbers but actually how are you deploying that and what does that mean in terms of its significance inside the industry are we fundamentally changing the nature of our focus to make sure that there's a strategic approach to engaging the same clients perhaps we've engaged for years but making sure that we're engaging them in conversations around transition and change in business models on their own and are we deploying that capital in a way that's actually going to enable that to happen so we've seen a couple of exciting examples happen in our own portfolio everything from enabling the growth of the solar industry in Japan to the the sustainable and and social housing sector here in the UK but fundamentally I think we're seeing this happen incredibly rapidly and it's just a matter of how we can plug in and play that stewardship role thanks Elsa that's brilliant there is a really important point there and it's this sort of feeling that okay so people are making commitments but turning those commitments into action is probably the key and Barclays you're also a member of the principles for responsible banking what are those to those who don't know it and is that something that is helping to take financial institutions into this move from commitments to action absolutely so the principles responsible banking for those who might not be familiar if you're familiar with what the asset managers and others have done around the principles responsible investment this is really a platform that's focused on banks in particular and the whole premise behind it is how might we align our strategy and approach to align to society's goals both in terms of the Paris Agreement and also in terms of the Sustainable Development Goals broadly speaking the important thing about the PRB is that it's a strategic platform and it can either be considered to sort of a foundational underpinning element or an umbrella that's overarching your whole approach however you'd like to think about it fundamentally it's a package that encapsulates every bank on the planet who's willing to join in and I think that's what's so exciting about it in Barclays case we have a very different business model and different makeup of our portfolio including a large investment bank from those who might be smaller development banks in very specific geographies but the fact is the PRB is able to bring us all together to enable a united and cohesive approach to sustainable banking broadly speaking and how do we start setting out some targets and putting teeth behind that I think importantly the important factor of the PRB is that we have actually built in by the industry and for the industry a set of expectations that these banks will align and improve progress or else they'll be invited to to leave the PRB and rethink their approach and I think it's that kind of expectation setting and commitment to progress that's really important because I think the world is sick of people throwing general goals out into the universe and then not proving progress and so this is where the the objective of disclosure and then making measurable progress is so critical also that's extremely helpful it does sound that there's so much kind of momentum taking place both within individual institutions and across these kinds of platforms for commitment and we're just getting to that tipping point perhaps of you know action starting confidence building mainstreaming starting to take place also Polanza the global head of sustainability and ESG at Barclays thank you let's turn to Daniel Hannah of Standard Chartered Daniel welcome we've heard a lot here from Sean about transition finance and from Elsa about you know what's happening in some institutions and the movements across things like responsible banking now Standard Chartered you have a significant footprint in emerging markets how can transition finance and these sorts of elements play out in those markets do you think is it uniquely a kind of a richer country play or is this a more broader piece of momentum at stake no I think well first of all thank you very much for the opportunity to speak on this very distinguished panel and what has been a fantastic conference and I think we've heard a lot about the momentum in sustainable finance more broadly but to your point around the emerging markets I think actually this is where the big challenge is right now if we as a planet want to shift the trajectory of global warming away from the three to four degrees that we're seeing at the moment and I think we need to see the similar sort of momentum really happening in emerging markets which frankly face the biggest risk from climate change but also have the biggest opportunity to leapfrog to low carbon technologies and Sean mentioned steel in his section maybe just to pick on a very concrete example of this in action if you take steel and aluminium production they generate about three times the total amount of emissions that the entire mining sector does and it's predominantly in the use of coaking coal and the production of say steel and now the long-term fix to that is to switch to hydrogen and decarbonize that process completely but actually just by switching from blast furnaces to electric arc furnaces and using renewable power and those electric arc furnaces we can halve the amount of emissions that are created in the steel process and then by using scrap metal by introducing circular economy principles we can actually reduce the emissions by eight fold now in the US 80 percent of steel is made from electric arc furnaces in China that number is 12 percent so I think we can see how just in that one example in these hard to abate sectors that Sean mentioned actually with some focused investment we can really start shifting that emissions trajectory to where it needs to get to but the reality is that there is currently a massive shortfall of capital going to emerging markets in general and in particular in sustainable finance and we just published a survey called the 50 trillion dollar question where we went out to asset managers who are responsible for 50 trillion dollars and so it's almost the equivalent of half the world's GDP and the good news is and I think it sort of reflects what we've heard on over the summer over the last three days is that increasingly almost all investors that are aware of sustainability want to increase their portfolio to it but the sort of bad news or the challenge that we've got in front of us is there's only about 13 percent of the people that we've asked asset under management is currently focused around sustainable development goals and driving that kind of transition and actually if you look at the emerging markets only 20 percent is going to Asia and actually 10 percent is going for the whole of Latin America Africa and in the Middle East so we need to see a significant shift of capital to really drive the transition in emerging markets which I think ultimately is also going to be determined of where the planet submission profile goes over the next 10 years. Daniel thank you so much for those of us who've been in this space of some time this is an incredibly interesting discussion because there's sort of we're not only mainstreaming if you like in the finance conversation we're mainstreaming the idea about the shift of the economy talking about steel and chemicals and plastics and such and you mentioned steel you know together our colleagues at the energy transitions commission and the Rocky Mountain Institute the world economic forum we're looking at how to bring together those sectors and representatives from those sectors with the financial community and of course the geographies of these play out as you say in in many emerging economies you mentioned the SDGs and the development dimension of course as you well know Daniel one kind of phrase that is very prevalent in financing in SDG territory is this phrase of blended finance and how it can help crowd in more private finance I don't know if you could offer our viewers you know any thoughts on what that blended finance term means and whether it's something that can be applied as well to this challenge that you set out because I'm sure we've got many people from the international development and official development assistance community watching as well. Yeah no thanks Dominic and I think great great question and I think blended finance does play a very important role here and it's and for those that aren't familiar with the sort of term it basically means blending development or concessional capital that wants to achieve public goods with commercial capital and by doing that you reduce the cost or extend the ten or increase the amount or all three and really capitalise capital from the private sector to go where it wouldn't have done otherwise and Standard Charter has done about five billion dollars worth of blended finance over the last few years and a lot of this has gone into areas such as renewables so for example earlier this year we did a transaction with the ADB the Asian Development Bank and we're using blended finance we were able to underwrite a solar project in Vietnam and I think this is a great tool for overcoming and for catalyzing that sort of lack of investment that I mentioned a little bit earlier so I think scaling blended finance is definitely a really important plank I think there's a couple of others I'd also suggest which is Sean talks about ice cream if you like I sort of talk about rainbows but in both I think we're saying the same thing in the sense that we need to see the success of green bonds now really being replicated into other areas so blue bonds orange bonds driving capital into things like sustainable oceans into gender equality I think is also really important particularly when you talk about the sustainable development goals and but then also sort of green becoming a multiple different shades of say olive and it's this transition finance that is going to be complete very important next year and I completely agree with Sean this is one of the big spaces and a great example of that actually we just closed the first aviation transition bond with Etihad a few weeks ago and this was not only where the use of proceeds were focused on effectively electrifying ground fleet and and sort of other areas which really reduce emissions but also there was an embedded effective ratchet effect where if Etihad doesn't meet its sustainability objectives it has to go and buy offsets to do so so I think transition products are another key development in the market and then the final one which I would just just talk about briefly which is because we were talking about this a couple of days ago is is offset markets itself and I think we all want to decarbonise business models but the reality is this is going to take several years and in the meantime we need other ways of taking carbon out of the economy and so having a robust transparent and credible offset market is really important which is why we're very excited to be part of the task force of scaling voluntary carbon markets that really underpins our thinking and others across the sort of market and buyers and sellers of these credits around how that process can really be achieved and scaled in a way that it can really be a credible part of the toolkit over the next few years. Brilliant Daniel there's so much we could just kind of carry on with this panel we've got loads more to get through unfortunately but I can see that Elsa and Sean have got some thoughts emerging Daniel Hannah their global head of sustainable finance at Standard Chartered I do believe that our colleagues in the financial sector can learn any smell creation of product can smell deals rainbows ice cream you know there's something going on in the space which is making this a very very exciting time so thanks a lot to our speakers there we're going to see you a little bit later in the Q&A and for those of you watching and you'd like to submit some questions don't forget to do that at Slido with that code GHS Green Horizon Summit GHS which is capital letters 2020 okay so let us move on because we've got another building block in this agenda to get through we've heard about the asset owners and the managers in the financial sector that there's some things afoot we've heard of ice cream and rainbows and transition finance and blended finance and maybe even offset markets we've seen the movements in the real economy but one important question that also needs addressing is skills jobs and re-skilling and the green economy is a big ticket issue we know that for many policymakers and those in the economy itself and the recent report by the World Economic Forum found that a net zero I think I've got it here found that a net zero nature positive economy could create get this 395 million jobs by 2030 it's a pretty important number if we're looking at kind of coming through and out of the covid crisis that has hit us so for our discussion today we really want to look at the skills that financial analysts and others in the financial sector need to also scale this green finance transition and to help us with that I'm delighted to welcome Rehan Marie Thomas the CEO of the Green Finance Institute and of course co-host of this very thing that we're all part of the Green Horizon Summit Rehan Marie is joining us live from London hi Rehan Marie to introduce us to some of the thinking on the re-skilling and upskilling in the financial sector that will be required to speed up the sunrise on the Green Horizon Rehan Marie over to you thanks everyone so much Dominic and hello everybody on day three of Green Horizon Summit let me start by saying clean energy infrastructure is very labor intensive especially during the early stages there's a model that was cited by professors Cameron Stiglitz and Stern and others in their often referenced paper on covid-19 fiscal recovery which states that for every million dollars investment you can generate 7.49 full-time jobs in renewables infrastructure 7.72 in energy efficiency and that compares to only 2.65 in fossil fuels and similarly the international renewable energy agency recently released a post-covid recovery agenda citing that an ambitious stimulus program could create five and a half million more jobs over the next three years versus a business as usual approach and such an initiative would also allow the world to stay on track for creating the 42 million renewables jobs that the agency's global renewables outlook projects for 2050 we heard at the summit yesterday that nature creates jobs too some 1.2 billion jobs in sectors such as farming fisheries forestry tourism are all dependent on the effective management and sustainability of healthy ecosystems and nature-based solutions provide some of the most job-intensive activities which include reforestation ecosystem or watershed rehabilitation and restoration management of invasive species and the use of agroecological approaches in food production and Dominic mentioned the fantastic report that we've brought out recently on this very topic but in order to channel capital towards these sectors and finance the developments needed to support these new jobs we also need to develop and broaden our skills and financial services Christine Lagarde said at our conference on Monday that finance needs to become green finance and that means embedding the implications of climate change and depleting natural resources into every department of every financial institutions not just the relationship managers the credit officers and investor relations but also the strategy team HR comms and marketing as well as the operations finance and treasury functions and we need climate literacy all the way from the boardroom to the grad scheme according to the KPMG eversheds report that we heard is being launched today only 25 percent of board level executive interviewed felt that they had the necessary skills to address climate risk it is a monumental undertaking but the consequences of failing to do so not only impact financial stability but the impacts the stability of our climate as well so we've been speaking recently to those in the financial industry and academia about the skills needed for green finance jobs and how to fill that skills gap unsurprisingly we've heard of the need to marry financial expertise with science and engineering and increasingly we see we see the need for finances to familiarize themselves with biodiversity and the risk posed to supply chains and business models from depleting natural resources without doubt we also need finances to develop policy expertise both to inform investable policy and to respond to a rapidly changing policy backdrop and we've heard over the past few days the need for better data standardized data decision useful data it's the lifeblood of the markets but without knowledge data will only ever just be another set of numbers so that's why we need financiers who can interpret the data through their understanding of policy regulation and science I also see that in order to mobilize capital towards the programs and projects that will pivot our global economy we need project management skills stakeholder management skills the ability to lead broad groups of stakeholders sometimes with really differing agendas and operating styles towards defined outcomes and above all we need financial institutions that nurture those who think differently those who are comfortable dealing with uncertainty and ambiguity and who are able to make sound judgments through collaborating and applying new knowledge rather than extrapolating from historic trends that aren't representative of a future that will be disrupted by climate risk and new technologies that adage what got you here won't get you there has never been more applicable than when we consider the challenges of greening finance and financing green at the green finance institute we recognize the need to support finance professionals to build and broaden their skills and that's why we're so pleased to be co-hosting this summit with our investors the city of london corporation as well as with the world economic forum and why in july this year in conjunction with the majesties government and 12 professional bodies including the charter bankers institute we launched the world's first green finance education charter the signatories collectively have more than 2 million members within the financial sector globally and together the 12 bodies have committed to integrate green finance and sustainability into their core curricula new qualifications and the continued professional development of their members as well as encouraging the adoption of global and national standards and engaging with the public and private sector around emerging best practices at the time of the launch of the charter i said green is one of the most exciting creative and fast growing areas of finance and the skills required to drive the agenda will be increasingly sought after as the global economy shifts to net zero on day three of this whirlwind green horizon summit following hours of inspiring statements announcements and speeches by global leaders and with yet more to come today i'm even more convinced of that statement i hope you agree and i hope you enjoy the rest of the summit including this next video what would it be if every finance practitioner understood the basics about climate change green finance is about marrying the very best parts of traditional finance to these new skill sets an awareness of the science of familiarity with the policy and a deep understanding of the energy technologies that we're going to need in order to really make a dent on co2 emissions there are going to be significant changes to the investable universe the types of companies that are going to do well in future and the types of companies are going to struggle there will be winners and losers and we don't know who those winners and losers are going to be yet and investment professionals need to understand how to do that analysis how to do the valuation around that so that they can allocate capital effectively to meet the challenges of the transition to net zero access to talent is going to be one of the most exciting areas frankly for companies as they confront the challenges of the energy transition certainly in the case of the oil company on whose board i serve we've been around for 60 70 years we have you know an extraordinary pool of highly trained highly capable people who have developed for an industry that is heading towards gradual obsolescence so the challenge for us and i would say it's the same in any business to a greater or lesser extent is in identifying how people can be re-skilled and redeployed for the technologies of tomorrow job postings on linkedin for portfolio managers 20 percent of those are now looking for sustainability skills but only two percent of portfolio managers actually say that they have those skills cfa uk and other signatories to the green finance education charter are moving quickly to deliver qualifications and training to try to fill that gap and ready the next generation of investment professionals and the existing universe investment professionals to meet that challenge we started by creating a new masters that sits within the business school on climate change management finance creating a new empirical research unit that looks at how climate change is changing risk and return in the capital markets and i'm happy to report and this year applications for our program have gone up 110 percent and 98 percent of our students have been employed three months after graduation but it is difficult because the environment is changing quickly regulation and policy change quickly the uncertainty concerns public policy so what are the rules and regulations going to require us to do where will we be penalized and where will we be rewarded by government policy the second is technology the third is how customers are going to change their buying choices when you do the math you realize that we've not got much time to move the needle on climate change up the educate and train new leaders in this space the biggest change is going to be in the way that society views the investment sector investment is an enormously important activity because it's how society allocates its capital to economic activities society is choosing to change the way that we allocate capital understanding the dynamics of green finance and how probably the most influential stakeholder out there for companies which is their owners how they are now starting to demand much higher standards in respect of the environment so thanks for that that was a fantastically interesting video because you can see that all of these different pieces of the jigsaw are coming together the skills investment that we're going to require on top of some of the other things that we've talked about and that are innovations and developments and strategic collaborations creating in the finance and industrial sector communities now the final piece of this puzzle this jigsaw which we're building is of course the access to the right data that we're going to need to make better investment decisions i'm sure those of you who are watching this is cramming a whole kind of like kind of three or four MBAs into one 90 minute session don't go away and get that cup of coffee yet because we've got a super panel coming up for you on this one we've got so much in here if you were planning to do something on the hour move it to 10 minutes past the hour that's when we're going to be landing at the end of this because we want to get this next set of information in for you which is really really super interesting data and metrics now all of us know that there's so many things going on some people call it an alphabet soup of initiatives and at the world economic forum we heard from many of our partners they wanted to demonstrate how to generate long-term value not just through solid financial performance but also by delivering on those esg factors so an exercise was embarked on to identify a set of universal metrics and disclosures not not a new framework but rather a set of metrics taken from those existing well established standards and in consultations of corporates investors it's been found that many agreed the universal esg metrics and disclosures would be beneficial especially if they are part of a broader suite of reporting so it's really exciting to see how this work is galvanizing movements towards more common global standards for esg reporting and super proud to have a close partnership with the standard setters regulators and policymakers that has helped making this happen that's that multi-stakeholder flavor if i can throw in another ice cream option to this discussion so this work is ongoing and let's talk to some of those who are related to it especially the environmental component of that esg piece and so i'm delighted to say that here with us we have mike zehat maya who's the partner of risk technology and sustainable finance that Ernst and young sherry madera who's the chief industry and government affairs officer at refinitive and clara barbie who's the chief executive at the impact management project keep those questions coming i can see on my ipad here that they're all stacking up and we've got all of our speakers who've been involved so far ready to get involved but if we can go into this discussion and perhaps start with yourself mike what kind of insights do you think investors gain from environmental environmental data from corporates and and how do you think that affects business in the marketplace mike over to you so if you go back to what what carney announced on monday which is around three hours reporting risk and returns all of those are undepend by data and there are two aspects of that one is trust in that data are they confident in that data to be able to make decisions around investment we've heard a lot about investing and the need for both talk about blended finance development finance as well as private capital coming in to be able to support that so that is all driven by an understanding of the data that is out there and to inform decisions around what to invest in what is the benefit that's going to be able to be delivered from that and other returns going to be able to be delivered from a financial perspective now that is underpinned by data the question that also we have to face today is does that data exist within the market i think that's one of the underlying challenges we face which is this is a very nascent emerging data set it is relatively highly fragmented there are parts of the segments in both markets industry segments that the data isn't particularly robust or there isn't a coverage or granularity i think one of the things we have to recognize is that for us to be able to support three hours and to be able to divert markets in this space that data needs to evolve very quickly across the globe and so one of the things i think organizations need to be cognizant of is that in consuming data they are going to have to recognize that that data is going to evolve very quickly over the next two to three years and they need to be ready to be able to deal with that to be able to explain the changes of that as that data evolves over time i think the second thing is is that we've heard a lot about commitments around disclosure so we heard from Andrew Bailey around TCFD reports putting the adoption here in the UK those are really critical commitments that policymakers supervisors and regulators are making which is it gives us confidence in what's being reported but also in encouraging the coverage across wide parts of the corporate and investment environment because getting that data not just in the premium listed but more broadly across corporate world and financial institutions will help inform those decisions being made Mike thank you for that it's extremely interesting and this point about you know how patchy the data is and it will change and evolve and people will have to be agile is very well made from but we might have some people kind of watching or listening to this thinking that the sort of ESG frameworks are a bit peripheral it's like whatever i mean you have so many kind of clients and a viewpoint of this landscape can you see already any effect on businesses in the market of these developments so i'll start with the capital from the financial services and provision of capital for supporting investment so across the G20 most of the G20 central banks have made commitments to undertake some form of stress and scenario testing over the next 18 to 24 months i think that's critical because as we're hearing today financial services knows that this is a risk that they now need to understand and be able to quantify as part of not only giving capital is understand this as a physical hazard that may impact the returns and also impact the quality of the investment they're making now on the other side of the fence the the organization receiving that investment now we need to move to a different world which is where they have looked at things like working capital and they've looked at how they finance the working capital of their organization i believe they're going to be moving to something i call it working carbon where as part of their operational decision making they're now going to be able to start thinking about carbon from an environmental perspective first because the banks are going to have carbon limits as they have credit limits that they are going to be monitoring managing and limiting the amount of investment against the carbon emissions and carbon density of of those uh the carbon that they're financing on the corporate side they need to be able to make operational decisions decisions decisions which includes understanding what is the working carbon within their organization i think there's a second aspect to that which is the as we start evolving and we've heard of it uh today which is there is a conundrum we face making that transition is going to generate potentially more carbon as we transition and i think that's one of the questions that we will start seeing coming through is in those decisions around what is the working carbon and the carbon i'm going to generate to transition there has to be an ability to be able to evidence not just that they are making that investment investment to transition but they are actually transitioning because from a financial services perspective the banks and the providers of that capital will want to be able to see that those organizations that they are financing supporting that carbon investment and the capital investment making will move over time and organizations are actually transitioning. Mike thank you for that and this is a material issue for those of you who are listening if you heard any of the kind of data points there that Mike was giving and that idea that banks the financial community will have carbon limits like credit limits i think is a bit of a cut through comment and one that should be taken on board from many boards and companies let's turn to sherry madira if we can who's a chief industry and government affairs officer for Refinitiv welcome sherry we heard there from Mike a little bit about data quality already could you tell us about the work of the future of sustainable data alliance and what you're doing to help improve data quality sherry over to you great thank you very much and thanks for having me it's a it's a topic that i think that we really need to address which is thinking about data not only for now but also for the future so as you say the future for state of state sustainable data alliance was launched in Davos earlier this year and the purpose of that was to bring together a coalition of the willing a number of members from around the world to look at the the question of what data is isn't available in order to be able to help to channel capital into sustainable investments and over the course of the last number of months since then we've been working with stakeholders around the globe to try and look at you know what are the key issues coming out here and i think that over the course of the last few days we've seen quite a lot of reference to data and data gaps the reality is if you define what a data gap is it means that there is already a data set that's been identified and that it hasn't been fully populated by all those that need to disclose that information to make it a comprehensive data set in fact there are data holes out there as well there are entire areas where we don't have any data that has been defined and been able to be used quite efficiently by financial markets in order to be able to bring to bear some of these decision-making and and let me give you some examples to put a little bit of sort of color to this there's been a lot of increasing talk about biodiversity and understanding nature and the impacts on nature and how it is that we can make sure that our investment propositions also take into account the impacts that investments and and issuers have on nature this is a tough thing to in order to be able to get the data on we can consider it you know a big data gap at refinitive of the universe of companies that disclose ESG data only 20 percent of those disclose any reference to biodiversity impacts and a lot of that is to do with a lack of definition of some of those terms a lack of definition of what that data is but also sort of the granularity that's needed in terms of making some of those data sets meaningful you know often data is collected in a binary form you know is there a policy on water usage is there a policy on effects on biodiversity the answer to that data set is yes or no yeah again the granularity there needs to be much more meaningful in order for those data sets to be useful in in the round you know a couple of key findings I just wanted to highlight you know in advance is that you know there are three things that a future sustainable data alliance has been considering you know one is thinking about retrospective versus forward looking data a lot of the last three days has been looking at how is it that we can think about what's going to happen next you know a lot of the disclosure data we have is retrospective so how is it that we can actually put into action reliable data that's looking forward the second thing is to think differently about data I reference biodiversity and a lot of people are talking about geospatial data and being able to use those data sets in order to be able to understand biodiversity impacts better but actually alone they only have limited utility the reality is you need to pair those with asset level data and location data in terms of disclosure pieces to be able to put two things together in order to be able to make decisions very useful for a financial community so again we need to think differently about it and think about combining data more effectively and the third is thinking about taxonomies and taxonomies and definitions standards obviously a big part of this this panel and for the last three days is essential in order to be able to move forward as much as a harmonized global view as possible from a data perspective the reality is we need to actually make sure that we really in lockstep understand which data sets are going to be able to be the proof points for those standards and those taxonomies so those three things I think are a good way for us to start thinking about making practical use of data talking to regulators talking to governments and talking to the industry about how they can all play their role cherry thank you so much for that there's so many things which are kind of coming through from this conversation that we're having this morning at least in europe time there's some brilliant movements going on you know in the environmental community a whole range of earth scientists an earth commission looking to try and work through as you say those data holes in terms of biodiversity water and lots of movement in the NGO community a science-based target network to help on the science-based target initiative very much on water and nature and such so there's movement you know outside of the financial and and compliance community there's also I mean if you are a sort of tech innovator I mean this is music to everyone's ears I mean the the data the data holes the geospatial monitoring and this sort of tech environment tech sustainability agenda it sounds like it's really going to take off over the next few years to help your work and possibly others I don't know if you have any sort of thoughts on those sherry well definitely I think we're at a time where where data sets are exploding and so with the more data you know people think well more data better actually the you know that that is grossly over simplifies things really we need to be able to channel and use data effectively and that's where innovation can come into play so we're dealing with this at an optimal time in terms of us having as a society a huge amount of innovation that's already underway a number of technical platforms the use of AI how it is that we can create analytical models etc but one of the other things that we need to be aware of is you know and applauding the initiatives that we've heard about today is the being able to keep talent up to speed and being able to have enough talent in terms of people resources to be able to help craft not only the technology but help make sure that the decisions are sound as as they work through the system so there's still a lot to do but there's a lot of underlying data to play with which is a good place to start fabulous thank you so much sherry what an exploding area of activity let's turn to clara barbie the chief executive at the impact management project clara you're helping standard setters to develop a vision for a global sustainability reporting system you released a statement in september together with deloitte and i think ourselves at the welding week forum which generated a lot of excitement in can i say the ecosystem tell us a little bit about that and what's next great well i'll start with why that was conceptually important and then i'll i'll talk about why i think the next 12 months are critical and to refer to your flavor of ice cream the multi stakeholder why that has got to be the framing for what happens next so so in the statement that was released by the standard setters in september it the framing of a comprehensive corporate reporting system was used and i just want to unpack that and explain why we need what i see as three theories of change which are completely interrelated but we need all three of them running together at the moment and and comprehensive corporate reporting recognises that and this is to state the obvious a company creates or destroys value for itself and therefore for its providers of capital by creating or destroying value for other stakeholders however the value creation and destruction there is not necessarily proportional as we all know otherwise the world wouldn't look the way that it does and we wouldn't need sticks and carrots from governments in the form of regulation and public policy but when it comes to corporate reporting the that fundamental truth is incredibly useful because if you just start with the information that's in the financial statements the theory of change that we need to work hard on there is that that information which is serving providers of capital about the performance and position of the company that's appropriate to capture in financial statements needs to be better this has been referenced already by others previous days this morning but we need to see appropriate impairment of assets for example if we don't get the existing financial accounting standards that we have to be appropriately reflecting climate risk we stand the chance of not achieving net zero ambition the way that we need to so that's the first theory of change we need to improve the way that the current financial accounting standards are done the next theory of change is to acknowledge that what is reflected in the existing financial accounts of a company is by no means the whole story in fact some will tell you based on research that it represents that only 16 percent of the value of the company from a market capitalization perspective so what about the other 84 percent and as is increasingly you know I think on people's lips this notion of enterprise value creation becomes important how do we make sure that actually the annual report of a company the core communication tool to investors is not just talking about what's in the financial statements is talking about the rest of the value that they needed that an investor should be looking at when it thinks about the market cap of a company and that's that next theory of change we need to run out very hard because the information just isn't there at the moment so there's a group of standard setters that we're working with who are exclusively focused on that how do we perhaps the best framing up for it is how do we get to better financial reporting that actually includes sustainability related financial disclosures and that's where you know let's start the alphabet soup here we've got IASB we've got FASB in the first theory of change I described in the second one we've got SASB we've got CDSB we've got the IR framework the integrated reporting framework which provides that connectivity between this broader set of information about enterprise value creation and what's in the financial statements as well and then we've got a third theory of change which is the reality that it's not just investors that drive company behavior and that actually to my earlier point that there isn't a proportional relationship between the value we create or destroy for the world and that which we then create or destroy for investors we have to hold companies to account as well using other tools and that's where consumers suppliers employees and really importantly public policy and governments come in and that disclosure theory of change emphasizes the fact that although the enterprise value creation reporting by companies if we were to really get that right and get that right quickly I do think on issues like climate change it's going to pick up almost all of the significant impacts that companies have on that topic we need to be very cognizant that it won't necessarily always pick them up and especially when you think about a just transition and you think about other kinds of sustainability issues we need to be cognizant that just relying on enterprise value creation disclosure to pick up all of a company's significant impacts would be dangerous and we need to have this accountability of companies to disclose all significant impacts whether it's in public interest reporting sustainability reporting or other kinds of communications to other stakeholders so that we can then activate the theory of change that gets all the other participants the governments the consumers the suppliers etc to use the information to drive change at the company level using the tools that they have so that that's how we think about a comprehensive corporate reporting system and how disclosure has these theories of change that can help with net zero I want to close just by observing that we are at an incredible moment right now that is akin to where we're back in the 1930s with financial accounting standards where only in the last few months you have got a whole series of players including the International Business Council of the World Economic Forum but also the European Commission by OSCO at the securities regulator level and the IFRS foundation itself for financial accounting standards all coming forward saying that it's they all need to play a role and and I see that as the as the perfect manifestation of your multi-stakeholder ice cream flavor you know that that represents big market players in the form of the CEOs of 140 big companies progressive jurisdictions like Europe and then the crucial private independent standard setting bodies such as the IFRS who I think is you know really speaking in concert now with the voice of these sustainability and integrated reporting standards that we're working with too and I will just close by saying I was very encouraged by an open letter that came from my OSCO and the chair of their sustainable finance task force which I think really helped to show people that although those those parties that I just referenced have been observed to be perhaps running in parallel in some cases even the media has suggested they're in conflict I OSCO in a recent response to an open letter that we facilitated by the standard setters actually said the threads need to come together and that I OSCO wants to play a role at the securities regulator level in making that happen so I think over the next 12 months we're going to get to a situation where you haven't just got you know everyone starting to row in the same direction you've just got everyone in the same boat albeit perhaps with different orders to move things forward I will close there Clara thank you so much for that and it's just it's just so exciting to see all of this kind of leadership across the ecosystem and what you're doing at the impact management project is just immense considering the alphabet soups that you were talking about and creating not only a direction of travel but also a momentum and a confidence that we can get there like you say a pivotal moment like in other moments in history we are coming towards the end of our discussion here but I can tell you that there's been so many questions that this little iPad on my desk is kind of not going trying hard to cope I think we really should do our best to get a couple of them in because there's some very nice ones lots of people obviously have sent some anonymous ones in but there's there's a couple of nice ones and so I don't know if anybody wants to pick these up I think this might be from some of those in the professional services or banking sectors but the question is and thank you Adi Pradhana for sending this in how do we push banks in emerging markets so maybe this one for you Daniel how do we push banks in emerging markets to integrate sustainable finance in their lending portfolios and here's the killer especially when countries regulations are not there yet Daniel you must have come across that scenario and I wonder if you can reply to a D2 with any of your thoughts look I think that's a great great question and a tough one I mean I think that there is no silver bullet to this I think as we as we've just heard and I think as this excellent session has shown there is a number of different things that need to come together not just the intent the regulatory environment but also the skill set that bankers need to have and the information and data that we can really track this with with credibility I think from our side we've been working we have a commitment to measure manage and reduce our scope three emissions so the emissions that are generated by our lending itself and we've run a number of workshops across emerging markets on how we do it we're also the chair of the equator principles at the moment in terms of the best practice in terms of infrastructure financing and again have been encouraging other emerging markets banks to really join that so I think there's within the banking community there's an effort from our side to really replicate what we see as good practice and then engage with regulators to to move this on but I think encouragingly we're also seeing a number of regulators now starting to produce their own sustainable frameworks so the EU for example is talking to China around its sustainable financing framework how the taxonomy and how that can be applied but we've seen countries from Australia to Malaysia also adopt these kind of regulatory green financing frameworks and I think one last thought just on this the height of the pandemic the HKMA published a white paper talking about the importance of green finance green finance and climate risk so I think this really shows that there is this momentum across regulators I think there will be growing momentum in the banking sector and emerging markets and and technology is kind of enabling a lot of what we couldn't do a few years to really drive it the question now is how do we scale that rapidly over the next 10 years to really make a significant difference brilliant thank you Daniel I do apologize to all of our great panelists and all of those of you sent questions I can squeeze in one more and I really like perhaps to us to land where we began maybe with Rong Rong Hua executive director of 91 it perhaps plays to some of the some of the issues that you raised or Rong Rong when you began our discussion but Steve Podmore hi Steve thanks for watching writes could we talk about the need for system innovation and new models and fund structures to allocate capacity building and risk capacity at the scale and speed required you seem to internet that we needed more than what we were doing at the moment Rong Rong so perhaps takes us back to beginning of where you set us off on this on this journey and I wonder if you've got any reflections on Steve's question there sure I mean it's a it's a million dollar question now different asset managers are doing differently now for us maybe just say how we do it you know we yet to crack the whole investment strategies but for what we do is we apply a very rigorous you know at the board level across all our investment process and and and thinking and obviously we don't just take data for the sake of it we actually think of very hard we build our own internal rating or scoring system if you like but ultimately we really apply our assessment according to different funds strategies and process and ultimately so for example the data issue is not going to run away but what we are trying to do is asking the right questions so for our global environment funds for example you know the process are based on what we believe in terms of fundamental research fundamental investment thinking asset allocation idea generation but really deep within that we creating our own assessment in terms of looking for winners of this place and we actually has gone to the risky ways using scope three carbon rather than just a scope one and two carbon and of course they are there are issues within that in itself but nevertheless we are see we are seeing that the winners on top of the transition and I think that's a very key message and dominate as you said is that there are flowers every way and no one is doing better than others the best way to learn is actually by doing and trying so that's why we work with our competitors we work always our peers we challenge data providers and actually just trying to give a go but most importantly we must be sincere and transparent with all the things we're doing well or the things we don't do well and the good thing is for our three funds for example our global environment funds our uk sustainability fund and emerging african infrastructure funds and the financial performance and the positive e and s impact has been really impressive and we hope that that continues and that the other thing allows me to say is that as much as we think about the long term the industry as a whole are so strapped with short term performance right everyone looking at quarterly and you know and yearly and everything we have to go over that short term hurdle I really align the long term capital with the long term objectives fantastic run run well it's a great way for us to close out thank you to all of our wonderful panelists and speakers we could you know we could carry on all day on this there's so much content and discussion to be had we've heard from professionals across the investment legal banking sectors we've covered esg finance skills data metrics ice cream rainbows and all of it is telling us you know that we have this connection across the industry across professional services across banking across real economy coming together and driving this agenda forward that horizon the green horizon is probably getting closer faster than many of you who might be watching have considered and any one of our fantastic panelists I'm sure would be delighted to be contacted and to help you take that journey quicker faster and importantly as Ron wrong said together so a special thank you to the city of London and the green finance institute for hosting us to mark Carney for championing this topic in his role as special envoy on climate action and finance we come to the end not only of this session but also with the green horizon summit in general for the last three days the world economic forum has been a proud supporter of the 2020 green horizon summit I say 2020 because I hope Reanne and others you might be interested in thinking whether this is not just a one-off and in terms of final words on the green horizon summit who better to close us out than the right honourable the Lord Mayor of London William Russell ladies and gentlemen what a wonderful summit we have had we have tackled some of the most urgent questions in the sustainability agenda and examined all aspects of finance through the lens of climate action as the Chancellor said on Monday we are entering a new chapter for financial services in the city a green future what has been made most clear is that we are fast approaching a world in which every financial decision will take climate change into account the transition to a net zero climate resilient economy is inevitable the shift in capital to align with the Paris agreement is unavoidable financing the greatest economic transformation of our time is the future of finance and like President Lagarde I look forward to a time when we no longer talk of the green economy or of green finance but simply the economy and simply finance over the first two days of the green horizon summit we heard from luminaries from governments from leaders in finance they are of one mind the transition is already on us and we know what to do I was particularly struck by Mark Carney's three hours to me they are the formula for success in this new world one reporting better reporting enables financial institutions to price climate risk and value to risk better risk management keeps the financial system stable for all and enables prosperity and together reporting and risk management unlock number three the returns for returns are inherent in the transition for companies financial institutions and ultimately individuals this truly is the commercial opportunity of a generation but as we have heard this morning how we deliver the transition how we transition finance operates is a rapidly evolving art the race has begun in earnest across asset management across sectors in transition across banking data and related service provision and those that crack the code first will capture the greatest market share we are truly harnessing the power of financial markets to do good and to deliver the net zero and climate resilient future that we need as we look forward to COP26 in Glasgow in 12 months time I see five priorities emerging for the city and for all of financial services first we need to redouble our efforts to improve the quality of climate risk disclosures the UK has taken an important step by setting out a road map to mandatory TCFD more countries will follow as financiers we need to play our part here too second the asset management industry needs to step up to the plate by increasing asset allocations to positive action strategies to do this we need to crowd in behind David Blood's proposal for forward-facing comparable metrics implied temperature rise is compelling and I look forward to the city's asset management community taking this forward third we need to scale voluntary carbon markets rapidly as we heard from Bill Winters yesterday this is a complex area but there is a pathway forward before COP26 I believe we can progress a pilot offset market hopefully here here in London I would encourage you all to read the full consultation released by Bill's task force yesterday fourth we need to connect to green capital in London and around the world with the growing pipeline of investable projects in emerging markets yesterday the bluebird backed climate finance leadership initiative launched a new consultation paper on private private finance considerations for policymakers this should be mandatory reading for finance ministries but ahead of COP26 we should put these considerations to the test London should partner with a handful of leading emerging markets to pilot the policy considerations bringing capital and policy together to accelerate a sector level progress towards net zero finally we need to come together as one global industry in Glasgow next year we need a dedicated space for new commitments and new actions from finance I'm looking forward to it but we have much to do there is much left unset and much detail still to cover that is why I'm delighted to announce our new green horizon perspective series which will run monthly on the road to COP26 in Glasgow green horizon perspectives will tackle the unspoken work of the transition and highlight the innovative new solutions from financial and professional services that are bringing a below two degrees future into view so thank you for joining us over the last three days we look forward to seeing the commitments and actions you and your firms make on the road to COP26 in Glasgow thank you to our partners at the world economic forum and co-host the green finance institute who are at the forefront of the transition and of course thank you to our sponsors thank you to our speakers our moderators our production teams who have kept the entire show on the road these past three days no mean feat before you go if I can invite each and every one of you to stay for a few more moments as we screen a short call to arms from Sir David Attenborough our planet too big to fail reinforces the core message of the green horizon summit financial markets have the power to put us on track for Paris and prosperity and all of you have the power to make it happen our economic system is underpinned by the services of nature and the stability and resilience it provides but flaws in the finance system have helped tarnish our natural world the impact of climate change and nature loss becomes increasingly difficult to predict into the future and even more complex to ensure what's the point of receiving a pension when our children cannot even play outside revolutions happen when the majority of people think that it's a mistake to try and block change in the terminology it would be a climate minsky moment and that's what we need to avoid which is why we need to start moving today do we invest money in the practices that take us deeper into this crisis or in the solutions that could get us out of it our finance sector has unwittingly bankrolled the destruction of the very natural systems it relies upon since the Paris accord was signed in 2015 banks globally have continued to invest 1.9 trillion us dollars into the fossil fuel industry and that despite knowing where that's leading and what the consequences are the financial system is not doing a great job of distinguishing between good and bad growth putting ourselves on a trajectory to devastate the natural world and our way of life forever but our future doesn't have to be this way our finance system needs systemic change the financial sector is an enormously powerful and effective force and can be a force for good no sector is better placed to drive the transition to a sustainable economy than the finance sector itself the public needs you to take the lead and needs you to be brave and building a better system can start now with fire key actions as we move to a sustainable economy all companies banks and investors will need to understand where they are vulnerable there's the physical risks what will flooding wildfires and many other major events mean for the portfolios of banks there's the reputational risk of not being seen to act on climate change or financing things that are creating other environmental or social consequences as companies adapt to meet net zero targets they will also face transitional risks if we continue to downplay the scale of the transition across all economies around the world then the adjustment when it comes will be much more severe the biggest risk is inaction inaction today the finance system has the ability to dial up the positive and drastically dial down the negative impacts of every decision made ESG or environmental social and governance reporting should be the bare minimum for all companies ESG is great but it's quite narrowly conceived at the moment we need to go much further what we need is for financial institutions to demonstrate and report on how they're reducing their impact on the natural world those responsible companies that start accurately monitoring and reporting their impact and risks will thrive those that don't will be left behind shareholders are just one part of the picture we need to recognize that investors customers employees all stakeholders are changing so there's a really interesting shift and I hear this from people who work in finance they say we've got new clients it's actually opening up new demand in the financial sector to come up with financial portfolios that don't just extract revenue but that invest in the future this changing financial landscape heralds the end of business as usual but brings with it an exciting world of new opportunities achieving net zero requires a whole economy transition every company every bank insurer investor will have to adjust their business models but doing so could turn an existential risk into the greatest commercial opportunity of our time the clean energy sector is already exploding and the entire food sector is transforming too within a decade alternative meat proteins are expected to grab over 10 percent of the 1.4 trillion meat market taking society and the environment into account in all our actions will soon be business critical fortunately for the finance sector the opportunities and benefits to society are endless we need to build a finance system which is recalibrated to the long term one that is transparent so all investors can see what their money is funding and one that takes climate nature and social development into account in all financial decisions the finance sector plays a crucial role in the fight against climate change but it cannot do it alone we need a coordinated response across many sectors government energy technology the legislative and regulatory environment bringing all these together to make a meaningful impact the thing that gives me hope is that people are rethinking how capitalism should be structured at the top table it's huge and if they're successful then we will live in a much more sustainable future if they do not succeed then the economies will collapse and civilization itself is at risk as we navigate our way through the biggest economic crisis since the second world war the existential threats from climate change and nature loss are still looming now is the moment to reframe our idea of value and build a new system one that will safeguard ourselves from future global shocks if we do this we'll be leaving a legacy of which we can feel justly proud