Governance, risk & compliance Check your F
inding a tonic for the world’s ills requires effort, solidarity and, of course, investment. While it may be swept off the front pages by cabinet resignations, pandemics and world wars, climate change withstands the turmoil of the daily news cycle and ignoring it comes at a price. So what exactly is that price and where should the money come from? Probing the finances of the world’s largest banks seems like a good place to start. And if anyone’s well- armed to offer insight into the sector’s role in fighting global warming, it’s Werner Hoyer, president of the European Investment Bank (EIB), fresh from New York Climate Week.
The EIB, owned by EU member states, is one of the world’s main financiers of climate action and environmental sustainability. It is unsurprising, then, that the bank is set to play a key role in addressing the climate emergency over the next decade. That’s something that, according to Hoyer, requires trillions of euros in investment, whether it’s spending €2bn
green credentials
Sustainable investment has long been a watchword for banks across Europe – especially with new EU rules forcing institutions to be more transparent. Nor is this merely a theoretical risk: German police recently raided Deutsche Bank’s offi ces claiming the institution had misled investors over green investments, even as the European Green Deal was specifi cally created to make the EU economy more sustainable and inclusive. Nikki Peach talks to Werner Hoyer, president of the European Investment Bank (EIB), to understand how it ensures its investments are truly green, how sustainability can support both a bank’s reputation and its bottom line – and how new rules might accelerate developments.
developing 71 floating wind turbines off the coast of France or simply building decent flood defences. Whatever the solution, at any rate, the EIB is there to provide it. The first bank to introduce green bonds to global capital markets in 2007, it was also the first multilateral lender to align its operations with the Paris Climate Accord – including stopping all financing for unabated fossil-fuel projects. The bank also has an ambitious agenda to support €1trn of climate action and environmental sustainability investments by 2030 and to commit more than 50% of EIB finance for climate action and environmental sustainability by 2025. At Cop26 in Glasgow, the bank announced the first dedicated EIB Adaptation plan and committed to tripling its adaptation financing by 2025. This is a bank, in short, that seems to put its money where its mouth is. Its president hopes to lead by example, believing that all global financiers have an obligation to align their activities with the Paris Agreement – and to do so with immediate effect.
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