We enjoyed the opportunity to share our insights on green finance and digital assets at the Annual CITIC CLSA Flagship Investors’ Forum 2021, together with fellow green finance thought leaders Sean Kidney of Climate Bonds Initiative and Michael Sung of Fudan Fanhai Fintech Research Center.
Rather like global temperatures, demand for sustainable investments is heating up. Unfortunately, the financial system is still far from sustainable and in the meantime most borrowers and investors have no meaningful access to green solutions. At the same time, while the green and social bond market continues to grow, so too does the estimated cost of tackling climate change through green finance – China’s latest revised estimate is a whopping USD76 trillion of new green money over the next 30 years. Financial centers need to do a lot more and be a lot more creative to mobilise private capital at the required scale and speed.
Here are some of the key talking points we shared:
#1 Professional and retail investors are currently mostly underserved. We need to fix the shortage in supply of climate-aligned investment products and services to serve investors of all types, and for this, we need to embrace the enabling power of fintech to accelerate, and help democratize, green finance.
#2 Opening up sustainable finance to professional and retail investors will require support from regulators at various levels – including more creativity and ambition. Regulators need to strike the right balance between investor protection and accepting new innovative fintech products that enable sustainable finance. There is no pathway to sustainable finance that does not embrace fintech and innovation.
#3 A leading international sustainable financial center needs to be much more than a robust green bond market. To get to where we need to be, private and public sector stakeholders, including regulators, must work together to support the ecosystem, to develop new ideas and deliver new products to market.
