COP27 Must Unlock Private Finance

The COP27 climate summit starting on Sunday in Egypt must be used as a catalyst to unlock trillions of dollars of private money, says the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.

The comments from Nigel Green of deVere Group come ahead of the biggest global climate conference and as UK Prime Minister Rishi Sunak reverses his decision to skip the event following pressure from green campaigners and politicians.

The deVere CEO observes: “Sunak’s screeching U-turn reinforces the importance of this summit in helping to reach consensus on action to combat climate change which remains the most serious risk multiplier to our planet, to our communities, and to our way of life.

“I hope COP27 acts as a catalyst to boost private finance inflows into the cause.”

He continues: “As financial advisers, we should use the climate summit as a legitimate reason to highlight the issues of human-inflicted environmental damage to clients and spell out the clear financial benefits of acting now.

“Climate change is a key defining issue of our time. It will be a critical determinant in long-term financial returns, and the highest net economic benefit is reducing the impact of climate change.

“In short, we’re running out of time. The scale and seriousness of the problems mean that solving them will not only take political and social will, it will also take trillions of dollars.”

This is why, he says, it is now critical that “private money is unlocked and mobilised in the battle to mitigate the worst effects of human-created climate change.”

Nigel Green goes on to add: “For this to happen, all sectors within the industry, including financial advisories, need to step-up and promote the values of Environmental, Social and Governance (ESG) orientated investments.

“If we fail on this, the level of finance will simply not be available, nor at the pace necessary, to halt the catastrophic effects of global warming.

“Clients’ investment strategies also benefit. Funds investing in entities with robust ESG credentials have outperformed their benchmarks over recent years.

“From a risk management point of view, including these companies in portfolios is, clearly, a sensible decision to take.”

The deVere CEO concludes: “Awareness among investors about ESG has been increasing in recent years. But we should work harder to ensure it is consistently at the heart of investment decision-making.

“COP27 is a chance for us to extol the virtues of ESG, which can include future-resilient returns and to give clients the tools, knowledge and solutions they clearly want.

“It is an opportunity for our planet that cannot afford to be squandered.”