Day two of the Green Building Council’s Transform conference on Thursday was strong on pushback to what was happening in the US and the need to focus on positive momentum. “Global capital markets are accelerating their deployment of capital into green finance, green projects and the global transition,” said one speaker.
When Mette Wendel, symbiosis facilitator for Denmark’s Kalundborg Symbiosis told the audience at Transform that “systems make it possible, but people make it happen” in relation to circular economy, she touched on a truth that’s permeating the conversations.
The US is, frankly, off in the corner of things we’d rather not focus on. Even speakers from the USA including chief executive of the US Green Building Council, Peter Templeton and Chris Pyke, chief innovation offer for GRESB in the US, gave only minimal mention to the “situation” there.
Because, as we heard from speakers including Esther An, chief sustainability officer for Singapore’s City Developments Ltd, Katherine Tapley, head of sustainable finance at ANZ and Sarah Barker, managing director of Pollination Law, global capital markets are accelerating their deployment of capital into green finance, green projects and the global transition.
Even in the US itself, Templeton says that the USGBC is looking beyond the “fickleness of (federal) policy” to see where the signals are clearest. That is at the state and local government level, he said.
“There are 24 states that represent the majority of the population (of the US) who are saying they will step in.”
Lisa Reynolds, chief executive of the Green Building Council of South Africa, said the concept of a “just transition” is uppermost. Her organisation is saying to the government, “how can we help you?” because while the policy is great, the implementation to date hasn’t been.
Sustainable finance is proving a good lever, she said.
In a discussion on sustainable finance with GBCA chief executive Davina Rooney, Esther An stressed the need to “mobilise the money where it matters”.
In the Asia-Pacific, which is home to around 60 per cent of the world’s population, and is exposed to increasing intensity and frequency of climate events, the twin focus of climate mitigation and reducing nature impacts is where it matters.
An says if we don’t solve nature, we won’t solve climate. We do both, or not at all.
“A healthy planet is essential for healthy businesses.”
Her organisation is already undertaking Taskforce for Nature-Related Financial Impacts, she said. This is something investors are appreciating.
“Even our banker looks at our ESG performance,” An said.
If we don’t solve nature, we won’t solve climate. We do both, or not at all. “A healthy planet is essential for healthy businesses.”
Having been one of the early adopters of sustainability-linked loans, green bonds and other instruments to enact energy efficiency, renewables and Sustainable Development Goals innovation, CDL now is now obtaining a $400 million sustainability-linked loan for nature-linked finance, based on the TNFD framework.
Globally, she said that while ESG has been “taking a beating” in the Asia region it is still attractive and important. The ASEAN region is “blessed with resources” and this puts us in a strong position to grow the regional economy with solutions that include nature as well as energy efficiency and renewables.
In a panel discussion on the trends in finance, GRESB’s Pyke said the value currently lies in “focusing on fundamentals”.
Finance in the form of debt finance and equity capital is providing the fuel for long-term, systemic change and value creation.
In the EU and UK, regulation is driving this. In Australia and Asia, however, decisions are being made based on the “financial fundamentals of risk and opportunity.”
Katherine Tapley said that while capital was driving change in decarbonisation, it’s important not to “confuse the waves with the current” and see capital flows as the end goal.
The end goal is a sustainable planet, healthy human beings and a liveable climate. These goals are rapidly becoming normalised to the extent that Barker said the current shifting sands on ESG in the US and US-embedded corporates show us who was doing ESG as a “performative” and tick box exercise, and who’s genuinely embedding it as fundamental.
Regulation
In the EU and UK, regulation is driving this. In Australia and Asia, however, decisions are being made based on the “financial fundamentals of risk and opportunity.”
She said she’s been fielding calls from sustainability people in Australia asking her to come and talk to their board about the fact those fundamentals have not changed. No matter who’s in the Oval Office.
“You don’t get to choose what issues are material to you as a business, that is decided by the market,” Tapley said.
The whole green finance sector has already got the memo, with an “almost overnight” repositioning of green finance from the US to the Middle East and Asia, according to Nicole Yazbek-Martin from the Australian Sustainable Finance Institute.
As a “lowly middle power” we need to take account of all markets, including the EU and Asia, and stay the course.
