Paris climate agreement echoes co-operative values and principles

21 Dec 2015
 Climate change today is a geopolitical issue that attracted 147 heads of government at the COP21 sessions in December 2015. Alliance representatives led by Monique Leroux, newly elected Alliance president, attended the COP21 conference, spoke in the Lima-Paris forum and organised a side event where the importance of the co-operative and mutual financial sector was emphasized.  The climate deal which has been agreed to this weekend, mentions an important role for the finance sector to play. With the worldwide economic crisis still lingering, countries were slow to commit on financial issues. Industrialized countries promised in 2009 to provide $100 billion per year to help poor countries adapt to the impacts of climate change by 2020.  Improved openness and access to finance decisions affecting climate change seems will be essential to people, civil society and governments.  The new agreement especially calls for disclosure and transparency: “In order to build mutual trust and confidence and to promote effective implementation, an enhanced transparency framework for action and support, with built-in flexibility which takes into account Parties’ different capacities and builds upon collective experience is hereby established.” The commitment to transparency echoes core principles and values of the co-operative identity, such as the concern for community, education, and honesty.  The European Association of Co-operative Banks acknowledges the importance of transparency in its COP21 statement, aiming to create a constructive and lasting dialogue among co-operative banks, governments and stakeholders.  On the subject of transparency, during the COP21 climate conference in Paris, the Financial Stability Board (FSB) announced the establishment of an industry-led disclosure task force on climate-related financial risks under the chairmanship of Michael R. Bloomberg. The Task Force will develop voluntary, consistent climate-related financial risk disclosures for information to lenders, insurers, investors and other stakeholders. Monique Leroux, president of the International Co-operative Alliance: “The Alliance welcomes the FSB’s initiative. Improved disclosure will let investors and policy makers understand financial risk affecting the climate. Taking action starts with improving transparency, better understanding and early warnings. We applaud the task force initiative and would like to take part in it.”  In April 2015, G20 Finance Ministers and Central Bank Governors asked the FSB “to convene public- and private- sector participants to review how the financial sector can take account of climate-related issues”. G20 Leaders, in their Antalya Summit communiqué in November 2015 asked the FSB to continue to engage with public- and private- sector participants on this subject. Speaking at the COP21 Paris Climate Change Conference Mark Carney, FSB Chair, said “The FSB is asking the Task Force on Climate-related Financial Disclosures to make recommendations for consistent company disclosures that will help financial market participants understand their climate-related risks. Access to high quality financial information will allow market participants and policymakers to understand and better manage those risks, which are likely to grow with time.”