Kickstarting climate finance into financial markets

Earlier this month BNP Paribas sustainable finance teams' participated in the Climate KIC Mission Innovation summit in Dublin.

Mainstreaming climate finance into financial markets requires collaboration, and earlier this month BNP Paribas sustainable finance teams’ participated in the Climate KIC Mission Innovation summit in Dublin.

The event kicked off with an emphasis on the role finance can play as a change agent, helping to direct capital to climate projects, and ultimately questioning how finance can address the huge challenges faced by climate change.

Leadership for innovation

Speakers highlighted the role of leadership, calling for high level leadership across the entire innovation chain, helping to create better conditions for an entrepreneurial ecosystem to thrive. Development banks were also credited for their leadership role in scaling up green finance within capital markets, having been one of the first issuer types to come to the green bond market back in 2007.

Reporting – specifically the merits of self-reporting – were debated amongst one panel. The role of big data, transparency and consistency of definitions were also contested with interactive audience polling.

The strategic imperative and behavioural forces

Centralising Environmental, Social and Corporate Governance (ESG) issues rather than annexing them outside the core strategy was a central theme of the conference, with panellists emphasising the need for a mind-set shift inside the financial industry. Within the investor panels, speakers also referenced the UN Sustainable Development Goals as a valuable way to frame sustainability strategy, as they enable forward looking thinking that focuses on future value creation to solve key challenges facing both society and the planet. The ultimate conclusion was that investors must recognise that sustainability is an imperative, and not an option. Psychology is also fundamental to this, and speakers highlighted that framing sustainability in fear is ineffective and instead the discussion for integration must focus on the opportunities gained.

A systems based approach and embracing digital

The ‘shifting the trillions’ financing panel featured BNP Paribas’ Strategic advisor for Sustainable Business, Pierre Rousseau, who emphasized that a systems approach to sustainability helps to shift from product aligned thinking to a solutions based mindset, and is key driver for banking to be a mobilising force in addressing sustainability challenges such as climate change. This systems-based approach is also central to the circular economy – i.e one centred on a closed loop in which resources can be repurposed to keep creating value – and Pierre argued that “the circular economy is the economy of tomorrow”. BNP Paribas’ Global Head of Energy Transition and Environment, Sebastien Soleille, was also a speaker on scaling up infrastructure, and highlighted the role digital will play in addressing data issues, including helping to develop metrics and tools that accelerate investment and financing towards the energy transition.

Bio-digital innovations were also showcased at Climate KIC’s conference, through architectural and urban design firm ecoLogicStudio’s ‘Photo.Synth.Etica’ instillation. The algae biomass technology captures atmospheric carbon dioxide and stores it in real-time, equating to around 20 large trees.