SMI Quarterly Newsletter – 29 July 2021
July 2021 Newsletter
HRH The Prince of Wales met G7 leaders and CEOs to call for coordinated action to tackle climate change
On Friday 11th June, 10 CEOs met the Leaders of the world’s leading economies at the G7 an initiative led by HRH and the first such meeting held between Government and global business leaders to discuss the acceleration of sustainable investment. HRH’s engagement with the G7 is a critical building block on the road to G20 and COP26 where the SMI and its CEOs will be active partners.
HRH hosted a reception on Thursday 10th June at St James Palace for the 10 CEO’s who were joined by the United States Special Presidential Envoy for Climate, Secretary John Kerry, and Alok Sharma, President Designate of the 26th United Nations Climate Change Conference.
A message from Brian Moynihan, Chairman and CEO of Bank of America and SMI Co-Chair, is highlighted below:
“I wanted to highlight a few key points about the work the private sector is driving through the SMI. The CEOs who joined HRH represent CEO’s from over 300 companies from across the G7 that are engaged with the SMI and/or have all committed to His Royal Highness’ Terra Carta principles for sustainability and biodiversity. The most active companies represent 9 million employees and have a market capitalization of $10 trillion and $60T in assets under management. The CEOs operate through 17 task forces focusing on transformative actions they can drive within their industry or cross-sector which may include discrete projects and assisting countries in delivering their sustainability projects. We have conducted country-specific roundtables and engaged the Commonwealth country leaders. This will help unlock sustainable business opportunities and sustainable markets at a national level, particularly in India, China, Africa, the Pacific and Caribbean island countries. Through the Transition Coalitions recently announced, the SMI formalized its commitments to ongoing collaboration with many other global efforts including:
Glasgow Financial Alliance for Net Zero
One Planet Summit
Great Green Wall Initiative
Race to Zero
The Mission Possible Platform
The Council for Inclusive Capitalism Initiative with the Vatican
We know we need to work closely with the public sector and welcome their collaboration. We are not looking for funding from them, we have asset managers, private equity, asset owners, banks and issuers that can bring that. However, there are areas we will need continued leadership, including:
Setting a clear price signal on carbon
Establishing mandates to drive market development. For example, for Sustainable Aviation Fuels
Encouraging the multi-lateral development banks and other international financial institutions to change their mode of operations to eliminate political risk or take first losses in emerging economies so that private capital can follow in large amounts
Promote the adoption of a global framework for standards, metrics, and disclosures around sustainability which the G7 Finance Ministers committed to in their communique
We in the private sector are giving input to the process. A single standard will allow our work to concentrate on the actual work of the transition, not on working multiple calculations of what to do. The SMI are here to organize the private sector (our coalition of the willing) to speed a just transition to a new low carbon future. We are here to help and are committed to the task”.
Scaling Private Sector Investment
Awareness is growing of the inextricable links between climate change and human health, social welfare and economic prosperity. From the economic destruction caused by climate-driven weather events to a health challenge – the pandemic – that has exacerbated social exclusion in vulnerable communities, lives and livelihoods are under threat. This is true in both developing countries, whose communities are among the most vulnerable to the effects of climate change, and mature economies, where large segments of the population are also adversely affected. Urgent action is needed to prevent this from derailing progress towards sustainable development. And given the scale of the challenges, this calls for far greater levels of private investment.
Helping to drive these investment flows is one of the priorities of His Royal Highness The Prince of Wales (HRH) through the Sustainable Markets Initiative (SMI). Using the SMI’s convening power, its goal is to contribute to the development of a sustainable finance system that can drive progress towards development of sustainable solutions that can be applied globally.
Commissioned by the SMI with contributions from Deloitte, EY, KPMG, PwC, supported by BCG, an interim report highlighting the private financing imperative, outlines gaps in the current sustainable investing environment and identifies key barriers the private sector faces in investing in sustainable project including the development of an investment pipeline tool that will help develop investable projects at scale while helping to direct investment into the most sustainable projects around the world.
During a tour of his “Stumpery” garden at Highgrove, HRH looks back at his pioneering work promoting environmental causes, and shares his growing sense of optimism now that business leaders around the world are engaging with projects aligned to the Terra Carta, which aims to combine the power of Nature with the resources and innovation of the private sector.
Terra Carta Design Lab
Inspired by the Terra Carta, His Royal Highness The Prince of Wales and Sir Jony Ive have launched the ‘Terra Carta Design Lab’.
In collaboration with the Royal College of Art (RCA), the Terra Carta Design Lab invites RCA students and recent alumni to develop credible and sustainable solutions to the climate crisis. Young and emerging architects, designers, scientists, engineers, artists, historians, writers, and artists will be tasked with addressing the damage being done to our planet and create solutions which align with the aims of the Terra Carta.
The Terra Carta Design Lab supporting partners include Octopus Energy, the Islamic Development Bank and Amazon. If you would like to show your support for this initiative, please post the following:
[Insert busines name] is proud to celebrate the launch of the #TerraCarta Design Lab with the @TheSMI and Sir Jony Ive. The initiative will invite talented design students to develop high-impact, low-cost solutions for Nature, People and Planet. Find out more here:
Open letter FAST-Infra consultation
A new scheme, developed by the ‘FAST-Infra’ initiative (Finance to Accelerate the Sustainable Transition), is designed to help to close the trillion-dollar sustainable infrastructure investment gap. It aims to do this by transforming sustainable infrastructure into a mainstream, liquid asset class to direct investment towards sustainable, resilient projects. The SMI is a strategic partner and supporter of the initiative, which is a priority workstream within its Financial Services Task Force. As part of its work, FAST-Infra is developing a Sustainable Infrastructure Label (SI Label). This is intended to be a globally applicable label to designate infrastructure projects that fit within the sustainable infrastructure asset class through positive contribution to sustainability criteria.
Hydrogen Task Force
The Hydrogen Taskforce launched their Statement of Intent. With the spirit of the Terra Carta’s objectives of creating sustainable industries, catalyzing technology and innovation and specifically reducing emissions across industry, the Hydrogen Taskforce seeks to drive growth in the demand for and supply of clean hydrogen through company and sectoral public commitments coupled with practical, demonstrable projects.
Carbon Capture Use & Storage Task Force
At the invitation of HRH, executives from a range of companies came together as members to form the SMI CCUS Task Force focused on meaningful and actionable plans to help accelerate the world’s transition to a sustainable future. CCUS is a set of technologies that are central to achieving a net-zero emissions economy. Recognizing this, CCUS Task Force member organizations are committed to improving the understanding of CCUS technologies, accelerating their deployment and the development of demand for carbon dioxide abatement and removal services with a focus on supporting customers to address their emission profiles and recently released their Statement of Intent.
WaterAid’s ‘Mission Critical’ Report
Mission Critical, a new report by WaterAid with research by Vivid Economics provides compelling evidence of the global economic benefits which can be unlocked through investment in water, sanitation and hygiene (WASH), including:
Universal access to WASH can unlock trillions of dollars of value over the next two decades.
Achieving universal and safely managed supply of water will yield net benefits of US$37 billion per year, and sanitation US$86 billion dollars per year, between 2021 and 2040.
Every US$1 spent on flood-resilient water infrastructure could avoid at least US$62 in flood restoration costs.
Basic water services could save women and girls the equivalent of 77 million working days per year they currently spend on water collection.
This timely research and analysis signals the need for a major international effort to mobilize substantial increases in investment in climate-resilient water, sanitation and hygiene infrastructure and services. With global reach and influence, together governments, donors and businesses play a key role in closing the financing gap.
Earlier this year, together with WaterAid, the SMI announced the launch of The Resilient Water Accelerator. This is an initiative which brings together private sector leaders, key governments, development agencies and sectors to ensure that more finance is fast tracked towards providing and protecting communities’ vital water services in the face of climate change.
Refinitiv, a Founding Partner of SMI, has prepared a briefing paper for each of our Roundtables which provide an independent overview of the topic or industry, the associated risks to progress on sustainability, opportunities, and outstanding issues. Copies of these briefing papers can be found here on the SMI website attached to the relevant Roundtables.