Global leaders meet in Paris between November 30th and December 11th 2015 with the objective of achieving a legally binding and universal agreement on climate change. Earlier this fall, the world agreed on a post-2015 agenda through the Sustainable Development Goals (SDGs), with clear targets and indicators. All UN member states are now expected to shape their policies and leadership in accordance.
Huge challenges lay before us if we are to mitigate the major effects of climate change. Regardless of how successful we are in reducing greenhouse gases in the coming years, we have to face the fact that climate change is already happening and that we have to adapt to it. The courage and creativity of companies to find new solutions set the bar for how far politicians can stretch. A sustainable business approach builds the confidence to aim higher.
A new low-carbon era
The financial sector has a particularly important role to play in bringing about positive change. We have to ensure that capital reaches the sectors and businesses that contribute toward sustainability. Whether this comprises of equity investments, bonds or direct lending or financing, we have to assess the risks and opportunities. We also have the responsibility to allow our customers to invest their money in more sustainable companies, which are coincidently the businesses that are most likely to survive and thrive in a new low-carbon economic era.
The dragon and the elephant
Solutions can be broadly categorized into two - a reactive ad hoc approach emerging from global pres- sure and a proactive approach that stems from addressing national needs. Within this backdrop, India and China emerge as the best representative sample. The Chinese dragon and the Indian elephant have been pitted against each other on multiple occasions. Both draw on an ancient civilization, past glories, sprawling resource base, demographic dividend and of course in more recent times, global clout and ambitions. Comparisons strengthened through the decades between 1990-2010 as both economies galloped ahead to command attention from the developed world. Part of the BRICS lexicon, India and China have enjoyed leading the pack and hungered for greater global potency.
Both countries are the immediate victims of the Himalayan glacial impacts with ramifications on domestic water supply, flooding, agriculture production and livelihoods. There has been an increase in the frequency of climate change related natural calamities with a total of 1.8 billion people impacted in India since 1971. In China, a total of 3.03 billion people have been impacted since 1980. The risk scenarios become bleaker with every degree incline in mean temperature and increasing sea levels. Additionally, both countries face the indirect risks of slowing economic growth, which threatens to pull down more of the population into the poverty trap.
For us, developments in China and India regarding mitigation of climate change issues as well as economic issues associated with it are key determinants for future global state of world.
In collaboration with Solaron, Nordea Responsible Investments and Sasja Beslik are proud to present an extensive climate change case study on India and China. Read the full report here.