Last Thursday and Friday (22 & 23 April), Ditchley held its Mill Reef conference virtually with 60 participants from 16 different countries including the UK, US, Germany and China.
Global finance, states and societies: how can finance be one of the heroes of a green recovery from the great pandemic?
Taking British, European and Chinese perspectives and bringing together discussion of the future of the UK as a financial centre after Brexit; climate change action and pandemic recover and balanced regulation in the digital age, this conference covered a range of big themes.
Discussion of the relationship between global finance, governance and responses to climate change revealed some of the deeper structural shifts underway in politics, geopolitics, the digital revolution and laid bare by responses to COVID-19 which have reinforced trends of rising debt burdens, growing inequality, increased intervention by governments in many aspects of the economy, a turning upside-down of the market versus government orthodoxy and a shift towards more protectionism. The boundaries between economics, politics and the role of governments are changing, and the potential for "radical transparency" of digital information exposes decision-making in ways that material effects.
There was a view that action on climate and pandemic recovery can go hand-in-hand and that action on climate is a route to recovery and a more sustainable future. But that there are now huge challenges for the role of government and companies over how to drive and measure and build capacity for the change needed.
There was real concern expressed over the problems of systemic greenwashing and a need for more rigorous approaches to the take up of sustainability or environmental, social and governance (ESG) within companies. On the other hand, the turn towards ESG was seen as a fundamental and much needed shift in the ways companies see their role in the world and signals at least some of the ways the future will be different from the past.
Some of these questions were crystallised by challenges over the role of central banks in decarbonising the economy. Does the existential threat of climate change mean they should take positions in relation to the reduction of fossil fuel or should that be left to other actors so that central banks retain the capacity to consider other risks?
The COVID crisis has demonstrated the importance of engage with publics and the wider politics in order to better understand and communicate difficult policy choices. Politicians must deliver for their electorate and explain how dealing with the climate crisis is going to be paid for and what it will mean for millions of people. There was concern over the ways political leaders in the West are competing to own the "green space", setting targets and making promises but without attention on delivery or what happens when the costs begin to be felt. Regulation over climate action must, it was argued, have public buy in.
The challenge is to create the goals and rewards to make clean energy widely and cheaply available and in so doing inspiring people to join a global effort. Calling for a shared sacrifice will be less effective than calls to join a shared mission.
Further details of the conference can be found here. The Director’s conference report will follow.