The Global Climate Action Summit (GCAS) brought together leaders from business, government and civil society with the aim of celebrating worldwide climate action achievements to date but also strengthening commitments, across all sectors, in preventing climate change and fulfilling the Paris Agreement.
The event was co-chaired by: Executive Secretary of the United Nations Framework Convention on Climate Change, Patricia Espinosa; Special Representative for Climate Change Affairs of China, Minister Xie Zhenhua; Chair of the Mahindra Group, Anand Mahindra; the United Nations Secretary-General’s Envoy on Youth, Jayathma Wickramanayake; UN Secretary-General’s Special Envoy for Climate, Action Michael R. Bloomberg; and California Gov. Edmund G. Brown Jr.
As part of GCAS, on 12 September 2018, HSBC hosted the Financing the Low-Carbon Transition Forum where participants from HSBC, Blackrock, DE Shaw, Bunge, Off Grid Electric, Climate-KIC, Steptoe Johnson, and Milbank discussed the subject of 'Renewables: Financing as a Catalyst for Sustainable Change and New Frontiers in the Low Carbon Transition'.
Christian Deseglise, HSBC Global Head of Central Banks and Global Co-sponsor of Sustainable Finance, who delivered the closing statements during the GCAS panel said; “The Forum delivered powerful messages about the compelling business opportunities that are arising from the transition to a low-carbon economy and from rapid evolution in renewables, batteries and other technologies. It also highlighted the work that still needs to be done, particularly in order to increase the pace of adoption of climate change disclosures and raise awareness of the economic case for investing in renewables and other sustainable technologies which will allow a rapid ramp-up of climate investments.”
On the same day, HSBC also launched the third annual HSBC Sustainable Finance research report which canvasses the Environmental, Social and Governance (ESG) views of 863 issuers and 868 investors and includes findings for all major geographies (Asia, North America, Europe, GCC) alongside standalone reports for China, HK, UK, US and Canada.
The report finds that businesses and investors are increasingly prioritising the likely impact of their actions on society, citing financial returns and tax incentives as their top two considerations for focusing on ESG. For pension funds and sovereign wealth investors, the number two driver after financial returns is state regulation.
Further, 61 per cent of institutional investors and 48 per cent of businesses have an ESG strategy in place, with many committing to measuring and managing their impact on people and the planet, and providing information about areas such as their carbon emissions, working conditions, and relationships with communities. However, fewer than 10 per cent of total investors currently have dedicated ESG investment funds, but this is expected to grow 22 per cent over the next year.
There are, as would be expected, geographical differences. For example, 87 per cent of businesses in Europe and the UK have an ESG strategy in place while only 21 per cent in the US and 13 per cent in Hong Kong have one. Also, companies with at least USD10 billion turnover in China and Hong Kong list supply chain initiatives as their number two driver for ESG financing.
“Once again, the survey is providing invaluable insights into investor and issuer attitudes toward ESG. This year, it highlighted an important new trend, namely that financial return has become the top driver of ESG investment. As a result, capital will increasingly flow towards the more sustainable companies. This is a welcome development which will likely accelerate the transition to a more sustainable economy.” said Mr Deseglise.
Christian Deseglise, is HSBC Global Head of Central Banks and Global Co-sponsor of Sustainable Finance