G20 Foundation Publications China 2016 | Page 66

DEVELOPMENT MEETING THE SCALE OF OUR GLOBAL CHALLENGES MARGA HOEK Board member, Dutch Sustainable Business Chairman, Green Minds - Sustainable Scientist Network Author, Managementbook of the year 2014 New Economy Business The year 2016 marks the beginning of acceleration. As we prepare for Cop 22 in Marrakech in November, we increasingly recognize the significant events in 2015 that have marked the threshold of a new era. The United Nations presented 17 Sustainable Development Goals (SDGs) and the COP21 Paris agreement, agreed by 195 nations, to combat climate change set a new direction and scale for global goals. They have turned a page in history. Both were, to a large extent, a message from and for the business world: to create a positive impact on all the assets of the world, and contribute to developing an economy that is here for the world and leave behind the exploitation of a world serving the economy. 66 This is especially pertinent considering that over 50 of the world’s top 100 economies are in fact corporations, and the costs resulting from the damage to our planet are tremendous. In the last decade alone, the world economy suffered a loss of 2.7 trillion dollars because of natural disasters. Business has contributed to the mass destruction, but it also holds the key to the solution. Capital impact: from moving billions to shifting trillions The redirection of capital is crucial to accelerate the transition to this new, val ue driven economy. What we invest in, will grow. What we divest from, will phase out – and it should. In a recent WEF survey, 750 economists said that they see a climate-induced catastrophe as the greatest threat to the world economy in 2016. With this urgency in mind, Achim Steiner, director of the United Nations Environmental Program has proclaimed 2016 the ‘Year of Green Finance’, knowing that it is crucial to focus on capital investments. And thankfully, we are already seeing an increase in the growth of sustainable capital and a strong divestment from fossil fuels as well as an increase in the growth of sustainable capital and sustainably responsible investing, as there are increasing indications that previously considered risky investments in sectors such as cleantech, are now leading to above average returns. Over 42 billion dollars in green bonds have been issued and the amount of sustainable investments has increased over the past two years by 60%. Market value is increasing rapidly with the low carbon market worth more than 5.5 trillion dollars today, showing growth of more than 3% per year. Last year alone 270 billion dollars was invested in low-carbon clean energy solutions, in addition to at least 130 billion in energy efficiency. Additionally, thirty stock exchanges worldwide have joined the Sustainable Stock Exchanges initiative, committing themselves to promoting sustainable investments. Divestment from polluting fossil fuel companies is starting to become more prevalent. Examples include the largest pension fund in Washington D.C. which recently announced their divestment of 6.4 billion dollars from 200 of the world’s most polluting fossil fuel companies, and the Norwegian pension fund GPFG, the largest investment fund in the world,