Collective awareness of the profound social and economic implications of climate change is now irreversible. A recent study by Oxford Economics estimates that global GDP could decline by between 2.5% and 7.5% by 2050 if global temperature rises by 2°C above pre-industrial levels by then. The World Bank warns that this same warming could push 100 million people into poverty as early as 2030, and the World Economic Forum’s benchmark survey on global risk perception has shown how, over the past decade, purely economic risks have been displaced from the podium by environmental ones.
The World Climate Summit taking place in Madrid these days will undoubtedly constitute a great opportunity to further highlight these and other consequences and to encourage more organizations, individuals, and companies to make a net positive, urgent, and collaborative contribution during the transition toward a more sustainable economy. However, we cannot overlook that current regulation still provides considerable interpretative leeway regarding individual and collective commitments, which does not guarantee that the pace of debate is aligned with meeting the targets established in the Paris Agreement or the 2030 Agenda.
In this context, however, there is one incontrovertible fact: pivoting toward a more sustainable economic model will require substantial investment from all economic agents—from large multinationals to the smallest SME, regardless of their field of activity—and financing these investments cannot be borne by the organizations established to combat climate change. It should be noted, for example, that in the European Union alone, decarbonizing the economy by 2030 will require annual investments in the order of €2.5 trillion.
Given this reality, the financial sector has stepped forward and explicitly assumed its essential role not only as a financier of the sustainable transition, but also as one of the driving sectors of that transition, as evidenced by the pioneering Katowice Commitment and more recently endorsed by the six Principles for Responsible Banking.
In this context, and aware that the Spanish productive fabric requires even more granular work due to the high presence of SMEs—still today, the business segment finding it most difficult to understand the advantages and transition toward more sustainable models—in 2019 and prior to COP25, the employers’ associations representing the banking, savings banks, insurance, collective investment institutions and pension funds, and credit cooperatives sectors in our country established Finresp: the Center for Sustainable and Responsible Finance of Spain.
While we sometimes correlate the contribution of financial agents to mitigating climate change with sustainable finance, in reality this also encompasses areas such as investment or presents interesting development vectors through products such as microinsurance, which protect sectors as important to our economy as agri-food from the adverse effects of global warming.
Since its inception, the center has also joined the International Network of Financial Centres for Sustainability FC4S, which not only connects us with best practices in responsible and sustainable finance from the other 27 centers established worldwide since 2017, but also serves as a transmission belt for Finresp and Spain to become references for how to contribute to the sustainable transition of small and medium-sized enterprises.
In the coming days, Finresp will have the opportunity to participate in the World Climate Summit to make even more explicit and visible its commitment and that of the sectors promoting it to contribute to climate change mitigation and social transformation, and above all to establish itself as a faithful and committed partner to the administration and companies: the other two vertices of the essential triangle for the fight against this change, both social and economic, to be truly effective and transformative. But, especially after COP25, we will continue working to make the Spanish financial sector an agent of change in the transition toward a new sustainable paradigm, aware that this is a long-distance race and not a sprint.
Juan Carlos Delrieu, Director of Strategy and Sustainability at AEB
Antonio Romero, Corporate Director of Member Services, Control and Resources at CECA
Elisa Ricón, General Director of Inverco
Cristina Freijanes, General Secretary of Unacc
Mirenchu del Valle, General Secretary of Unespa
