Climate must factor into 'every financial transaction,' says Just Climate Chairman

Climate must factor into 'every financial transaction,' says Just Climate Chairman

In this year's final episode of ESG Insider, we talk with David Blood about two big sustainability issues impacting the financial sector as we head into 2022: Plugging the climate financing gap, and aligning investment portfolios with Paris Agreement goals.

David is a senior partner at Generation Investment Management, the sustainable investment firm he founded with former U.S. Vice President Al Gore. David tells us about the strategy behind Just Climate, a new venture Generation Investment Management launched in October 2021 to tackle the net zero challenge at scale.

"To achieve our goal of limiting global temperature rise to less than 1.5 degrees C, every financial transaction must take climate into consideration," David says in the interview. "I don't believe yet that the asset owner community or the asset manager community fully embrace that, have fully internalized that notion."

He also talks about his role leading the Portfolio Alignment Team. This group was created in 2020 by Mark Carney in his capacity as U.N. Special Envoy for Climate in response to rising interest from investors and lenders in measuring how portfolios align with Paris Agreement goals. The Portfolio Alignment Team published its latest report shortly before COP26.

In this episode, we also speak with Carter Powis, a consultant with McKinsey who led the firm's support of the team.

"Knowledge of portfolio alignment tools is still in a very nascent state across the financial sector," Carter says. "As a result, there are some pervasive misunderstandings about what these tools are and why they're important."

Photo credit: Generation Investment Management

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