REPUBLIC Financial Holdings Ltd president, Nigel Baptiste, is confident that finance will play a critical role in achieving the transition to a clean and just economy.
Speaking at the virtual Caribbean ESG and Climate Financing Summit last week, Baptiste said the private sector must play a key role in limiting global warming which can impact regional economies.
He said at the just concluded COP26 in Glasgow, international economists stated in an article that small island developing states will experience catastrophic economic and social consequences.
It is against this background that Baptiste said next year is crucial, given the 2022 obligation to increase nationally determined contributions (NDC) pledges.
He noted that collective action from all sectors and all industries will be needed for the world to go much further to limit global temperature increases.
“It is a widely accepted view that finance will play a critical role in achieving the transition to a clean and just economy, and the private sector will play an important role in redefining business as usual, helping to support the transition from exploiting nature and society to restoring and respecting this important balance. Our younger generation is already fully engaged, we now need to fully engage my generation and older.”
Baptiste said financing sustainable businesses has strong financial as well as broader societal benefits, which is why sustainable finance continues to gain traction.
“It will take the collective strength of government, business, and the financial sector working together to support the shift to a sustainable economy.”
Baptiste explained the financial sector can only truly achieve results through their clients, which will require the banking sector to provide the financial support to help customers meet their technological needs and business models to be fit for the future.
“It is an increasingly accepted notion that climate investments make economic sense. The financial and business case for clean energy is stronger than ever. It will become even more so when carbon pricing becomes a reality globally. That will happen… eventually. Clean energy investments drive economic growth, with a potential to create 18 million jobs globally by 2030; and that’s including the inevitable job losses linked to fossil fuels.
“On balance, our region relies heavily on the import of fossil fuels, and this offers tremendous opportunity for investment into a blue/green resilience strategy and inclusive recovery,” he said.
The banking executive told the conference that in order for countries in the region to move forward, improvements are needed in the quantity and quality of data.
“There is a great deal of work taking place at the global level in terms of setting international sustainability standards. Also, many countries have either made, or are making commitments to adopt the recommendations of the Financial Stability Board’s Taskforce on Climate Related Financial Disclosures (TCFD). Collaboration, partnership, and coordination of efforts is vital. This is not an issue that can be solved on its own by the banks themselves, or solely by the public sector, or through regulation,” Baptiste added.
In June 2021, the Republic Group signalled its intention to lend and invest US$200 million by 2025 to support actions that would help achieve major climate finance goals.
These goals will be achieved by activities which include the lending and investment for loans that enable the sale of electric and hybrid cars, loans that are aligned to the promotion of clean fuels, renewable energy and technology, that contribute to an improvement in energy efficiency and construction loans that deploy climate-resilient technologies, Republic said in a statement in June.