What is Green Finance? Simply put, green finance or sustainable finance, is financial investments flowing into sustainable development projects and environmental initiatives. After some 30 years of working on this issue, sustainable finance takes into account environmental, social and governance (ESG) considerations and includes a strong green finance component. For a long time, sustainable finance and its products were a niche market.
Today, sustainable finance is central to the future of the global economy and it’s It’s a vital tool to deliver the Paris Agreement and the Sustainable Development Goals. It’s changing how financiers think about risk management, traditional investment portfolios, banking, credit etc.
Is Green Finance the same as Climate Finance? One aspect of green or sustainable finance is climate finance. The Intergovernmental Panel on Climate Change (IPCC) SR15 report, made it clear that “rapid, far-reaching and unprecedented changes in all aspects of society, but bring clear benefits to people, ecosystems and the economy.” The report calculates that a 1.5C warming trajectory would require the global economy to cut greenhouse gas emissions by around 45 per cent between 2010 and 2030 and be at net zero emissions by 2050.
The world needs to a build net zero global economy by 2050. Every bit of extra warming matters.
The financial sector has a critical role to play in redirecting large amounts of capital away from high carbon assets into low carbon and climate-resilient infrastructure.
The IPCC estimates that around USD 2.4 trillion or roughly 2.5% of global GDP annually needs to be invested in the energy system between 2016 and 2035. There is also a target figure in the Paris Agreement of mobilsing US$100 billion a year by 2020 by developed countries for developing countries. The International Energy Agency (IEA) estimates that we need to spend US$359 trillion by 2050 to avoid catastrophic climate change.
Public finance will not be able to deliver this enormous need for low carbon funding, so private sector investment is vital (approx 80% of climate financing will need to come from the private sector).
Why a Public Scultpure? Done well, sculpture can be a rich way to depict complex notions, as it can catalyse a deepening of thinking between individuals and communities and it has the capacity to influence. In this case, we hope our sculpture will influence present and future investors in their financial response to environmental challenges.
While companies and investors are increasingly seeking ways to effectively mitigate risks and increase their green investments, more needs to be done to raise awareness on the cultural ‘change’ dimension.
The financial sector is leading sponsor of the arts and this initiative is a compelling way to focus on the story of green finance – a story that needs telling, celebrating and pushing forward to transition us to a safe low carbon future.
Why London? The intention is not just to have a green finance sculpture in London. We plan for it to be a global inspiration that can be adapted in other financial centres across across the world.
London has been a source of much of the green finance leadership and the sculpture will celebrate London’s leadership. In 2016, the City of London Corporation launched its own Green Finance Initiative, building on over two decades of innovation across asset management, banking, capital markets, insurance, regulation and research. In June 2018, the UK Government announced that it will fund a new Green Finance Institute with the City of London Corporation to “champion sustainable finance“ in the UK and abroad.
Will it be a temporary or permanent sculpture? It will be a permanent sculpture. We want the sculpture to be an enduring symbol of green finance.
Will you be fundraising from individuals and corporations? Both. In our first phase of fundraising we received monies from individuals. In our second phase of fundraising, we are seeking corporate donations or corporate sponsorship. If needed, we will do some crowdfunding.
What do you mean by a phased, pledged fundraising approach? To ensure the success of this project, we are phasing our project costs based on our fundraising activities and pledges received.
Phase 1 – our initial fundraising activity began by getting pledges from individuals which then turned into donations. These have paid for costs to get the project going and will take us up to commissioning the artist.
Phase 2 – will begin once we have received corporate pledges that will cover the artist fees, and associated costs such as installation, insurance, planning applications, project management, fundraising and launch activities.
Will I get a refund if for some reason the project does not go ahead? No. It is not possible to issue refunds for this project. If for any reason the project doesn’t reach completion or surplus funds are collected, any remaining funds will be donated to a charity or charities chosen by the sculpture committee.