We seem to be at an intersection. The intersection is the moment that we realise our futures are threatened by many things, particularly the climate emergency. The intersection is that the solution to the climate emergency is a mixture of government, finance and technology. The three areas are critical to solving our future.
Government is obvious. If there is not a regulatory oversight demanding change to switch to green and renewable energy sources, then nothing changes
Finance is less obvious, but just as critical. If financial institutions continue to fund firms that destroy our habitat, biodiversity and emit poisonous gases, then the future is unsustainable.
Technology is the final piece and is a new element. When we can track and trace every CO2 gas emission everywhere, we have a new capability; when we can track and trace every pollutant and change of temperature everywhere, we have a new weapon.
These three areas are converging rapidly to deliver a new idea. The new idea is structured management of our future. We regulate it, we manage the financing of it and then the technology monitors whether we are delivering it.
It’s been a long journey, but I can see this today. From the farming of fields to the flow of flights, technology is tracking and tracing every carbon emission emitted by anyone anywhere. Governments can then take actions, whether popular or not, to limit and reduce such emissions and create laws over how industries from energy to airlines operate. Then banks and financiers, as the connection between industry and government, can act and restrict such operations.
Now I know this is not simple – if it was, we would have done it by now – but the financial markets are the connection between fossil fuel expansion and energy firms abuse and fossil fuel contraction and the end of that abuse. These are the companies – the banks and others – who can allow planet abusers to march on or stop.
Thing is that you cannot stop fossil fuel funding overnight. As Ana Botin, Executive Chair of Santander, said just over a year ago:
“We cannot just cut the energy off where a lot of the economy is still powered by coal. But we did announce that we are not going to finance any new coal projects. You have to find a sensible balance between transforming and supporting our customers.”
This is the most important point and one that many may not understand. Sure, there are bad practices out there in the oil and gas industries, but you cannot just switch them off today. You have to create alternatives and yes, we are working on them, but they don’t appear overnight.
The result is that we may well see the planets’ temperature rising for the next two decades but, by 2100, I would be amazed if we had not reversed the climate emergency and returned to a sense of normality. However, we will only ever achieve this if government, finance and technology work together hand-in-hand to make it happen. Is that impetus there? Do they want to do this? Can they work together to make it so?
These are critical questions for the short-term that will massively impact our long-term, and the only way it will happen is if government makes this a priority. I’m not sure they have, so let’s make this a critical agenda item for the future and all of us should place pressure on the regulators to get financiers and technologists to solve our planet abuse issues today. Not tomorrow. Today.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...