Ideas from the speakers
Given increasing geopolitical instability and pushback against international climate action, the first key theme to emerge revolved around “leveraging bad intentions for our collective benefit.” Participants emphasised the potential for the current erosion of the post-war global financial architecture to become an “exciting time of change and disruption.” With a shift away from investment in the U.S., as its technological advantage is perceived to be eroding and its risk profile changing, there is an opportunity for diversification into green and emerging markets.
Up to now, global capital has been constrained by systemic passivity, but this “tyranny of the tracking error” is beginning to shift. To illustrate the harmful biases that need to be addressed, it was noted that the MSCI World performed better over the past decade when fossil fuel investments were excluded. While the risks associated with reliance on fossil fuels have again been exposed by the war in Iran, the green economy’s performance has remained resilient across multiple shocks. In fact, green energy has consistently performed alongside, and now outstrips, fossil fuels despite the latter being heavily subsidised. Moreover, the green economy already represents the fourth-largest sector and has seen growth exceeded only by technology, which itself is driven by a relatively small number of companies and may therefore lack resilience. The overall message was that the green transition is already underway, is financially compelling, and that prevailing biases suggesting otherwise need to be challenged. The discussion also highlighted the need for a course correction from a political economy perspective. As net zero is increasingly framed as a “woke left policy” rather than a matter of physics and economic common sense, this suggests a failure to communicate its urgency and relevance in ways that resonate with people's everyday lives. Relatedly, the growing climate refugee crisis was identified as an increasingly significant issue.
A further call for adjustment concerned the approach taken to developing and implementing solutions. Attempting to apply political processes directly to markets does not always prove effective, and participants suggested instead leveraging the discipline, incentives and value-chain mapping capabilities of the financial sector to guide more targeted efforts across sectors and jurisdictions. There was also a call for greater reflection in identifying and prioritising successful approaches, with the UK’s Biodiversity Net Gain legislation discussed as one example. Another necessary shift lies in addressing the “proposition problem” within the climate and nature space. Complex frameworks and taxonomies can lead to paralysis rather than progress, as they often fail to attract large-scale public and private investment. Many worthwhile projects remain too small to engage major investors, influence finance ministries or shape national debate. As a result, there is a need for compelling, large-scale and politically relevant propositions that clearly define the problem, delivery mechanism and funding model, and that are supported by communities. One example discussed was a hypothetical national programme combining habitat restoration and engineering to address coastal erosion in the UK. Participants argued that effort and resources would be better spent systematically developing a pipeline of such propositions worldwide.
Insights from the audience
Audience reflections reinforced the idea of leveraging bad intentions for collective benefit, particularly through discussion of the opportunities presented by the war in Iran, which was described as “Asia’s Russian invasion of Ukraine moment.” With volatile energy prices and greater insecurity, participants suggested that the crisis demands a response to public fear and uncertainty through viable, financially attractive sustainable alternatives that connect nature with economic security. However, it was also noted that in some places the communications battle is at risk of being lost, as certain interest groups continue to advocate for renewed domestic fossil fuel production. As one participant observed, “we are in serious danger of wasting a good crisis.” Similarly, the idea emerged of leveraging concerns about overexposure to U.S. investments, for example through pension funds, to promote nature-positive alternatives. One proposal discussed was “citizens’ investment”, whereby large-scale local, regional or national infrastructure projects are financed from the bottom up. These “green bricks” could become a meaningful source of capital, similar to remittances, while also strengthening democratic resilience.
Finally, the need to decentralise and diversify risk in order to increase resilience was raised repeatedly. Participants also observed that while efforts are underway to build a global market for nature and climate, there is not yet a reliable system to measure, structure or govern it in the same way as financial markets. This was identified as an area where governments have a critical role to play.
