Against a background of continuing turmoil in the mainstream financial industry, leaders from the sustainable banking industry, academics and experts in the green economy, launched four policy recommendations to transform the financial system from a short to a long-term focus, today.
CEOs from the Global Alliance for Banking on Values (GABV) – a network of the world’s leading sustainable banks, the Green Economy Coalition (GEC) – the largest civil society alliance working on green economy, and the Norwegian Forum for Environment and Development (FoRUM) announced four practical proposals as part of a new initiative ‘Banking because the future matters’ at a specially convened event on the eve of a major United Nations conference, Rio+20, in Brazil. The proposed measures would deliver a profound shift in the financial system from one primarily focused on short-term wealth creation, to one wholly focused on long-term resilience and prosperity. They are:
• To incentivize private institutions and create new public ones to offer sustainable products
• Promote diversity to increase innovation
• Improve long-term, sustainability reporting
• Discourage speculative activities with no social benefit.
The authors of the proposals stress that a green economy will only be realised if private finance plays a more active role in the real economy – the part concerned with real goods and services as opposed to buying and selling on the financial markets, and the right kind of financial policy reform happens. Each proposal includes a series of practical actions to support these goals. Speakers at the event included the Danish Minister for the Environment, Ida Auken; banker and environmental economist, Pavan Sukhdev; Brazilian government advisor Professor Ladislau Dowbar; and Nick Robins, from HSBC.
Speaking at the launch Lars Pehrson, CEO of Merkur, a Danish sustainable bank, and one of the founding members of the GABV said, “We have identified simple, practical policies that are in the long-term interests of people and the environment. Crucially, they help shift the financial industry away from short-term incentives to encourage the development of a resilient financial industry capable of providing long-term improvements to people’s quality of life.”
Merkur, and a growing number of sustainable banks around the world have proved that a commercially viable approach to banking, which balances the interests of people and the planet, is not only possible it’s backed by an increasingly strong business case. A recent Rockefeller Foundation-financed report, shows sustainable banks outperformed the world’s biggest banks against a number of key financial measures, from 2007 to 2010.
The proposals aim to build on this track record, expand the role of sustainable banking and reform the mainstream financial industry. They are the result of a broad consultation in the run-up to the Rio+20 conference, which aims to bring government, private sector, NGOs and civil society together to reduce poverty, advance social equity and protect the environment. The consultation included contributions from practitioners, academia, policy-makers and civil society.
“Finance is the vital life blood for a green economy” says Oliver Greenfield, Convenor of the Green Economy Coalition. “If we are to lift people out of poverty and create green solutions, finance need to be embedded in communities and assist social and community innovation, not remain in remote towers serving its own self-interest”.
Andrew Kroglund, Director of Information and Policy at the Norwegian Forum for Environment and Development, said; “Reforming the financial system will require a range of enabling policies, and cultural changes. We believe today’s proposals provide an important contribution to a system that has little to do with short-term profit, and everything to do with long-term value creation.”
James Niven, Global Alliance for Banking on Values
About the Organisers:
Global Alliance for Banking on Values
The Global Alliance for Banking on Values (GABV) is a growing membership organization, made up of sixteen of the world’s leading sustainable banks, from Asia and Latin America to the US and Europe. They are bound by a shared commitment to find global solutions to international problems – and to promote a positive, viable alternative to the current financial system. These organizations believe that we must improve the quality of life for everyone on the planet, recognizing that we are economically interdependent and responsible to current and future generations. www.gabv.org
Norwegian Forum for Environment and Development
The Norwegian Forum for Environment and Development (ForUM) is a think tank and national and international contact point for the coordination of policy initiatives and recommendations. These are anchored in a community of 54 member organisations in Norway, and the viewpoints of our international partners and those in the Global South. www.forumfor.no
Wiping the slate clean: no climate justice without debt justice for Africa
Thursday 25th May marks Africa Day. However, a debt crisis exacerbated by climate change threatens to undo decades of development progress.
Climate finance isn't enough. We need debt cancellation
As G7 finance ministers meet in Japan, our friends at Debt Justice outline why the global north must end climate usury