Extract from my speech to the City Livery Club Women in the Livery Lunch August 2nd 2021 on the topic of the City and Environmental Social and Governance Issues, hosted by Mei Sim Lai.
You will hardly have been able to avoid talk on all media about the upcoming climate conference COP26 in November that the UK are hosting in Glasgow. A time for all nations to reassess their progress towards the goals set by them in Paris in 2015 and to pledge anew in the context of our current understanding of the world’s climate as we establish how far we are along the road and how we will need to redouble our efforts.
It is in that context that I am working with others at the City Corporation to promote the work of the financial city and the opportunity that COP highlights to work with government and other international organisations and multilateral development banks to drive this agenda and help fund the transition needed to reduce carbon emissions and minimise the likely temperature rise.
The City Corporation has these matters firmly in hand, first of all in walking the talk with its own Climate Action Strategy reviewing all its operations as well as its investment strategies for its properties and financial investments.
Working closely with the Green Finance Institute, where I am the vice chair, we are planning and indeed already actively involved in the COP26 programme. The City are hosting a pavilion at COP26 and putting on a parallel real and virtual programme in Glasgow and London working with significant sponsors and in alignment with the Government departments. Branded as part of the Green Horizon series it will be a very visible contribution by the City and its leading businesses. This programme will continue after November as we deliver what has been promised
We also continue the international promotion of the City as a global hub for business and only last month I spoke at the Saudi British Investment forum on green finance and tomorrow lead a session with Latin America on the same topic of disclosure and compliance issues.
This drive towards net zero is wider than purely environmental matters. It involves Environmental Social and Governance matters ESG. A recent survey said that 66% of investors said London was world-leading or one of the world’s best cities in tackling ESG issues. Clearly an important feather in the cap of the City and the UK. However the absence of consensus, data and the ability to track these measures could cause some backlash or rightful criticism of claims that investments might turn out to be unverifiable. The City is keen to see a consensus on this taxonomy.
The initiative launched by Mark Carney under the Taskforce for Climate Related Financial Disclosure means that UK businesses are now either required due to their size or regulatory regime or are voluntarily considering the climate impact of all their actions and reporting thereon. This is being taken up internationally and other initiatives are gaining momentum.
Whilst the S is less easily measurable, work is progressing here at the Impact Investing Institute has been set up with the City Corporation with private support and government funding to drive this work – such as help in funding the rebuilding of the new City YMCA where the social impact of such provision was as relevant an outcome as the interest rate on the loan.
As to the G in governance – well I am a lawyer and so I like to think that how a corporate is governed is considered to impact the performance. This leads into the area of good processes, board composition and the inevitable need for diversity ( of thought) and engagement and communication with stakeholders.
This interplay of good behaviours should all work together and the E the S and G don’t need to conflict with each other.
Since this is a women in the livery event with a predominance of females present let me mention an argument and a hypothesis that I like the sound of that blends the social with the climate impact.
In low- and middle-income countries the fact of gender discrimination means that adolescent girls living in poverty are often the most vulnerable to the impact of climate change. This includes disruptions to their education, increasing their time in poverty, and with the risk of early and forced child marriage. Yet, ensuring that girls receive a proper quality of education can resolve this. Indeed, research suggests that girls’ education can strengthen not only their life chances but also climate strategies in three ways:
First by empowering girls and advancing their reproductive health and rights. The Intergovernmental Panel on Climate Change estimates suggest that together with family planning, girls’ education has the potential of avoiding nearly 85 gigatons of carbon emissions by 2050.
Education will help girls participate in climate leadership and pro-environmental decision-making – look at the women and young women taking leading roles on climate issues around the world.
And thirdly education will develop girls’ green skills for green jobs. We all know that girls are underrepresented in STEM ( science technology engineering and maths ) yet in pursuing a new green learning agenda, girls can have the opportunity to develop the skills not only to participate in green jobs and so help to redefine and transform our economic systems.
Would that not be a great social outcome for all those young women as well as for the climate? To me that is what ESG can lead to in so many real life situations.
I would argue that the way that we operate as individuals or within our businesses organisations and livery companies we can play a part however small and ensure that we prepare for a potentially very different future environment
My reasoning is that it is good for the planet, for people and for profit. I don’t need to be a goody two shoes I need to be a hard-nosed financier/lawyer who sees the future and wants to be investing in it.