A Shared Vision For the Future of Global Stock Markets
The United Nations is holding its annual climate change conference in Bonn this week, but the tone this year is different. Driven by a growing litany of harms associated with a warming planet, global governments are getting down to the brass tacks of implementing the Paris Climate Accord. Even the two long-time holdouts, Syria and Nicaragua, have finally pledged to join the Accord. In fact, the U.S. stands alone in threatening to withdraw and ignoring reality while doubling down on fossil fuels.
The reality of climate change and growing resource constraints are starting to sink in for governments and companies. It is hard to get business done when supply chains are broken by flooding, heat waves, agriculture disasters, and resource shortages. Informed consumers and shareholders are demanding transparency and action on problems as diverse as pay equity, climate change, slavery, and toxics.
In recognition of these growing threats and concerns, and with the goal of building resiliency into our global economic, social, and political systems, the United Nations issued a set of Sustainable Development Goals (SDGs). The SDGs create a shared vision of a sustainable and equitable future by 2030 for all. As importantly, the SDGs provide clear guidance and a common language on how to achieve this future. Corporations, foundations, universities, local and national governments, and individuals are quickly committing to work on SDG goals specific to their operations and missions.
In tandem, movement toward sustainability is also in the markets. A new UN project: the Sustainable Stock Exchanges (SSE) Initiative went live today. It is designed to work with stock exchanges around the world to encourage partnerships and best practices for sustainable development. As You Sow is proud to be one of the 75 global members on the Green Finance Advisory Group working to develop the Sustainable Stock Exchange framework. If stock exchanges can create greater transparency on sustainability issues and foster greater investment in companies and technologies linked to the UN Sustainable Development Goals, then capital will be directed to solve global problems and make the SDG vision a reality.
To accomplish this, the SSE will engage markets in four ways: by strengthening environmental disclosures; promoting green products, technologies, and services; growing green dialogue; and, ultimately, greening financial markets. While not a simple task, supporting a transition toward a green financial system can help reduce climate change, decrease resource depletion, support human rights, increase equity, and foster market resilience, among others.
As You Sow’s bi-annual Clean200 report has shown tremendous growth in green energy-producing companies as savvy investors capitalize on this growth sector. But these investments are just the beginning of the $2trillion per year needed to achieve the great transition to a clean energy future. By creating greater accessibility to green and sustainable markets, we enable all investors to join in simultaneously in protecting our world and reducing risk in their portfolios.
Investors are ready and willing. We don’t need to wait for political leaders. Each of us can commit to take action now to green our portfolios. In addition to investing in clean companies, investors can choose to invest in fossil freeand ESG mutual funds. We’ve made the argument recently in a whitepaper showing how companies can benefit by offering ESG options in their employeeretirement plans.
While the UN Climate Conference happens only once a year, a variety of tools — from the SDGs to clean and green investing solutions — already exist to help investors start protecting the planet the other 364 days of the year. As the Sustainable Stock Exchange and other new initiatives gain ground, this path will only get easier.