Banks and pension funds are still not taking sufficient account of the risks of climate change, writes Mark Sanders, Associate Professor in Economics of Transition and Sustainability at Utrecht University and member of the Sustainable Finance Lab.
This blog was published on 10 October 2018 on the climate blog of the NRC.
With the Paris climate goals, we have set ourselves ambitious technical but, even more so, economic and political challenges. As an economist, I particularly see us facing enormous investments and, therefore, a role set aside for the financial industry. Many larger and smaller players in the financial industry underwrite the Paris goals and claim to be willing to take up their responsibility. Forerunners are moving away from coal (like the PME Pension Fund) and using their client network to put energy efficiency on the agenda (like ABN-Amro Bank).
The supervising bodies have also woken up. Last spring, for instance, Klaas Knot, president of the Bank of the Netherlands, stated in a speech:
“Because climate-related topics can affect the solidity of financial institutions, they should be a focal point for both banks and supervising bodies."