The Role of Capital Markets in driving the transition towards a carbon zero economy

Date: 23 March 2021

Chapter Zero France


Chapter Zero France


  • Jean Lemierre – Chairman, BNP Paribas
  • Lorenzo Bini Smaghi – Chairman, Société Générale 
  • Kate Hampton – CEO, The Children’s Investment Fund Foundation
  • Jürgen Rigterink – First Vice President and Head of Client Services Group, EBRD (European Bank for Reconstruction & Development)
  • Mireia Gine – Associate professor of Finance, IESE Business School, Board Member Banco Sabadell
Watch the recording: The role of capital markets in driving the transition towards a carbon zero economy

Climate change is as much a financial concern as it is anything else. “We need to be careful about sustainability otherwise there’s no future, there’s no long-term investment, no quality investment and that would be very dangerous for the whole industry and the world,” explained BNP Paribas chairman Jean Lemierre on day two of the CGI’s Global summit.

To achieve financial sustainability, the Chapter Zero France panel argued, banks must do three things:

  1. Shift capital allocation towards low carbon by setting ambitious goals of increasing financing in the renewable economy.
  2. Help clients to achieve their own goals through advice, finance, and innovative solutions.
  3. Transparently work with other banks to define environmental, social and governance (ESG) standards to assess whether targets are achieved or not.

Additionally, the panel agreed that banks must consider the public interest while supporting companies to transition in the most transparent and engaging way.

This session largely focused on climate-related financial risk, and the need for banks to recognise it as a pressing issue. Banks need to be able to identify and manage climate-related financial risks in their investment pipelines and portfolios, the experts stressed – suggesting a framework composed of project risk and portfolio analysis. 

The panel agreed a cultural change is needed in some boards to take the transition strategy seriously and facilitating that has to be a priority within banks. The panel discussed how board members can be convinced to make climate a boardroom priority, in order for a bank to start fulfilling its moral and financial duty?

“Engagement is number one because (climate change) is a new issue for a lot of people,” explained Kate Hampton. “It starts with being serious about cultivating deep awareness across boards and not relying on sustainability officers to sort this situation.” She went on to explain that some companies have come up with their own transition plans which have then been shared with shareholders.

Jürgen Rigterink argued: “(Taking action against) climate change is not necessarily against business if you do it right, it is good business for the bank. It is a way to be profitable and to have a competitive advantage over the others.”
Currently, there are governance roadblocks like unawareness and lack of the right financing rolls hampering progress – but these can be overcome through education and sharing the load of climate issues across several boards. A well-established validated transition roadmap as an appropriate pathway, the panel concluded, will speed the process up.