Reflections from an Industry Outsider
Updated: Jan 19
In November 2022, I began working at A Future Worth Living In. At AWFLI, we help financial institutions understand their role in addressing the climate crisis, working particularly with pension funds. As well advisory and consultancy work, we also provide a bespoke research service. Our current project explores the Just Transition away from coal in Western Australia.
This feels a million miles away from how I spent the majority of last year - up Strathfarrar Glen in the Highlands, working on a place-based education project and living in a static caravan.
Before joining AFWLI, my perceptions of the financial services sector were probably similar to most people who work in sustainability: complex, unethical and one of the main drivers of climate change. This perception was not helped by my love of the BBC TV show Industry, in which one of the characters, a trader, utters the withering put down, "I think about you as much as think about climate change". Lol.
However, like it or not, finance is now the hot topic of climate negotiations and climate action. As we've moved beyond pledges to the decade of action, governments and business are literally going to have to put the money where their mouth is. Cop26 and Cop27 negotiations almost became unstuck around the subject of finance, and the failure of the $100 billion per year pledged for developing countries in 2009 (!) to materialise. Last year, at Cop27, a loss and damage fund for climate vulnerable countries was established, alongside calls for multilateral development banks and financial institutions to mobilise climate finance. McKinsey has estimated that the total cost of addressing climate change is $200-350 billion per year by 2030, which is less that 1% of forecasted global GDP in 2030. At this point, it's actually going to cost more to not address climate change.
Certain financial institutions have already started their journey to Net Zero, but on whole it seems the sector is still grappling increased mandatory reporting on climate change, and figuring out what it really means to address the Net Zero goal. I have been genuinely surprised by how little knowledge of sustainability and climate change exists in the parts of financial sector I've been exposed to so far (this includes attending events specifically about Net Zero finance). There is certainly a willingness to learn but right now, this lack of knowledge is seriously impeding progress to a Net Zero, nature-positive future.
The last few months have also challenged my pre-conceived ideas of greenwashing and bad decision-making by financial institutions and businesses. There is no question that are bad faith actors using various greenwashing strategies to disguise business as usual activities. However, it seems that the weak sustainability we often see and criticise is due to a lack of knowledge and desire for quick wins, rather than a wish to deliberately mislead. This is no excuse, though. We are talking about institutions that have far more resources than most for addressing climate change and sustainability.
With all the insight that three months can give, my conclusion is that we need more sustainability people going into financial services. This would give the much needed rigour and perspective on sustainability and climate justice that currently, is severely lacking . And financial institutions need to look beyond their traditional recruitment pools and concerns about reporting requirements, and think about bringing in people from diverse backgrounds who can embed sustainability across their operations and investment portfolios.
I'll continue to keep writing and reflecting on working at A Future Worth Living In, and I'm looking forward to seeing where investing in climate and nature goes in 2023. Finally, a few things I have found useful/interesting over the past few months: