Aviva Investors Event at COP 21 (Opening remarks)
09 December 2015
Ladies and Gentlemen,
Good morning. It is my great pleasure to be with you today.
Climate change may be the battle of our generation.
It is battle to preserve our world and our means to prosper. It is a battle that we need to give because the cost of inaction is huge, and we know it.
And there is also an unfair part of this battle that we need to be aware of. The countries most affected by climate change are the ones least responsible for it. The cost of our inaction today will not be paid by us, but by our children-- and the children of our children.
The status quo is not an option. We need to act.
To build the future we want we need collective and sustainable global action -- action that delivers results.
For some people, the issues I just mentioned may seem far away from the issues stock exchanges deal with. For some, stock exchanges have no role in the transformation needed to build the world we want.
But this is incorrect.
Private sector must do its part. We need to unleash the power of private enterprise, its innovative capacity and its capital mobilization capabilities. Because of this, stock exchanges have a role to play, and a critically important one.
So, let me get concrete and focus the rest of my intervention on my main messages: the contribution stock exchanges can make to meet economic, social and environmental goals.
The first way is by promoting investment in sustainable development.
Stock exchanges have a strong record of providing capital to risk takers with innovative ideas. Businesses that start in a garage can end up among the largest companies in the world, thanks in large part to the financing mechanism of stock exchanges.
Now we need to harness that market dynamism to drive investment towards sustainable development solutions. And believe me, the task is not minor.
Meeting the SDGs requires massive investment, in the order of 5 to 7 trillion dollars a year - of which about 3.3 to 4.5 trillion per year is needed in developing countries alone. Much of this is for basic infrastructure, food security, health, education and climate change mitigation and adaptation.
Thus, stock exchanges have an important role to play in encouraging new innovations, technologies and products for sustainability and to channel investment into those areas.
The second way private sector can help achieving the SDGs is by promoting good governance in business practices.
Good governance in business means environmental and social corporate governance practices -- what many investors refer to as "ESG" performance practices. Any company that plans to be successful for the long term must have strong ESG practices. This is not an issue of morality - it is about bottom line issues. Consumers demand it. Policy makers demand it. And investors demand it. Companies understand this and are adjusting.
Stock exchanges and capital market regulators have a strong role to play in this area. They have traditionally been responsible for creating formalized, well regulated markets with transparent, well-governed companies. This historic mission extends now into the future: a future of creating sustainable companies that report on their ESG performance.
Ladies and Gentlemen,
Together we can promote alignment between market signals and much needed public policy goals to protect the planet.
Together we can help create a world of prosperity, also for future generations, and where they do not have to pay the price of our inaction.
And, today, we can begin to work on the new ideas and the practical steps that will take us there.
Thank you very much.