The finance sector must take urgent action to tackle climate change if it is to keep customer support and protect the planet, an ethical finance pioneer has claimed.
Omar Shaikh, managing director of the Global Ethical Finance Initiative (GEFI), which will host a major global summit in Edinburgh this year, said businesses must now turn their words into actions if they are to meet consumer demand for environmentally friendly investment.
His comments come after Mark Carney, the outgoing head of the Bank of England, warned that the planet is heading towards irreversible heat levels and facing a “tragedy on the horizon”.
Shaikh said: “Mark Carney is right to call on firms to wake up to the climate change crisis. It is time to move from talk to action so that we can protect the future for everyone.
“Financing fossil fuel companies is increasingly problematic for many asset owners with concerns around stranded assets and stakeholder reaction – yet great opportunities exist in the clean energy sector.”
Shaikh called on all financial firms to make ethical investment opportunities clear to their customers, adding: “Today’s consumers believe that investments should reflect the issues they care about, such as tackling climate change, and this is starting to have an impact on the decisions made by institutions and public bodies.
“But all financial institutions need to do more to enhance their transparency and choice by highlighting the impact – good or bad – of what they are financing, and flagging ethical options to their clients so they can ensure their money is deployed in line with their values.”
'Worthy but not enough'
Carney, who will soon take up his new role as United Nations special envoy for climate action and finance, told the BBC Today programme earlier this week that he is concerned “we will spend another decade doing worthy things but not enough”.
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The GEFI, which works towards a fairer finance system for people and the planet, will have a specific focus on climate finance this year.
Its 11-month campaign includes October’s two-day Ethical Finance 2020 summit at RBS’ headquarters in Gogarburn, supported by the Scottish Government.
The event is set to attract hundreds of major international investors, asset owners and finance leaders to Scotland to explore opportunities in green financing.
Bodies represented include the United Nations, Bank of England, the Financial Conduct Authority, RBS, Baillie Gifford and HSBC.
In November Scotland will also host the 2020 UN climate change conference, at the Scottish Events Campus in Glasgow.
A recent YouGov poll showed that two-thirds of Scots feel it is important that banks and other financial institutions take into account ethical, environmental and social issues when undertaking investments.