Tackling climate change must be a high priority in the global economic recovery from coronavirus, says Dr Andy Sloan, Chair of Guernsey Green Finance
In the early days of lockdown, I was asked to respond to the publication of new research by HSBC indicating how companies with strong environmental credentials had been outperforming others during the pandemic. I wrote that one fact was axiomatic: “Sustainable finance is going to be even more front and centre in the post Covid-19 world.”
Going forward, the economic rules of the game are clearly going to change. As former US Secretary of State Henry Kissinger said at the start of April, Covid-19 is a world order changing event.
Its impact on a whole range of economic, cultural and social factors will not be determined for a long time. Economic models will change, but no-one quite knows exactly how.
Coronavirus arrived just as the climate movement had gathered serious momentum. In 2019, both the UK and France agreed to net zero emissions targets, Greta Thunberg had become a household name, central bankers were talking about “climate stress tests”, and “green quantitative easing” had become a legitimate policy topic.
It is too early to call the impact of Covid-19 on global climate change policies. It has stalled the build up of greenhouse gas emissions – they will fall in 2020 and perhaps 2021. But it is important not to forget climate change remains with us. Covid-19 has not eliminated that challenge.
The danger is that as countries exit lockdown and seek economic growth, many will be tempted to conclude that environmental concerns are a luxury they can ill afford. That would be a mistake. The crisis has already had immense social effects in the way people work and commute. These should be built into a strategy for economic recovery when the crisis recedes.
There are signs that momentum won’t be lost. Writing together in The Times on World Earth Day, at the end of April, co-Heads of COP26 Alok Sharma, the UK’s Secretary of State of Business, and Italy’s Environment Minister Sergio Costa, wrote: “We believe [rebuilding the global economy] should focus on supporting a clean, inclusive and resilient recovery, building on the principles of the Paris Agreement and the Sustainable Development Goals. We will work together to ensure that the linked challenges of public health, climate change and biodiversity are addressed.”
The world generally met the challenge of lockdown collegiately and consensually. Nations now have a real opportunity to ensure they embed sustainability into financing economic recovery in a similar fashion.