Mindy Lubber believes that climate risk is a financial risk and that understanding this connection is critical to addressing the threat.
“Our job is to make sure that – be it climate change or water scarcity or, quite frankly, any number of social issues – they have as big an economic impact as any other,” she said. “They must be part of the financial framework.”
According to Lubber, firms must recognize the economic impacts of climate change and incorporate them into their decision-making processes. Investors may help by working with firms to set emissions reduction targets. According to Lubber, the world’s top 100 firms are liable for 80% of emissions, making their actions particularly essential if climate change is to be curbed.
Unite stakeholders for change
One of the obstacles to mitigating climate risk, in line with Lubber, is bringing together the assorted stakeholders involved and reaching consensus amongst them. It highlights 4 critical cohorts particularly: investors, the investment community, corporations, and governments and authorities.
Balancing all these different interests is not going to be easy, but given the risks, it’s imperative. “If we don’t address climate, the impact from an economic perspective, from a societal perspective and from the perspective of the future we are building for our children is indeed frightening,” she said. “So we really need to do it and look at what the problems are and what the solutions are.”
This is where system change comes into play. Lubber describes how the Ceres Accelerator for sustainable capital markets may help create lasting, positive change by ensuring fair and consistent regulations across the economy.
Overcome politicization
Finally, Lubber acknowledges that climate issues have been politicized and that this politicization represents a big obstacle to further progress. In their view, the primary job of corporate boards and investor fiduciaries is to research risks, so ignoring climate risks could lead on to poor decision-making. But politicization only exacerbates the issue. “It distracts us and slows things down,” she said. “The fact is, the politics of hate, the politics of division, the accusations of woke capitalism that somehow investors shouldn’t look at all the data available to them – that’s madness.”
What are you able to do about it? Lubber believes that fostering collaboration and consensus amongst stakeholders is vital to driving change toward a more sustainable future. “The role of analysts and financial players is absolutely critical,” she said.
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