Sustainability – now more than ever!
The coronavirus has a firm grip on everything: politics, public authorities, the business community, the media, and each one of us. Also at the EU level, everything is rightly revolving around it. But it has recently become clear that other important challenges have not been forgotten. Last week, the European Commission advanced the issue of sustainability on its agenda, publishing a wide-ranging consultation on its renewed sustainable finance strategy.
This is important and the right approach. COVID-19 needs our full attention in the short and medium term, and in the long term many things are likely to change – economically, politically, and socially. And yet there is no way around a transformation of the economy and society towards greater sustainability.
COVID-19 and the UN SDGs
If anything, COVID-19 may even accelerate this movement towards sustainability, for example by requiring that future economic stimulus packages take account of sustainable criteria. The European Union recognised the importance of sustainable finance earlier than others and introduced measures to that effect. In Liechtenstein, the EU is preaching to the choir. Liechtenstein and its banks have long pursued a comprehensive, holistic approach that takes into account not only climate issues, but also all 17 of the United Nations Sustainable Development Goals (SDGs). COVID-19 is connected to almost all of them. There is a great danger that the poorer strata of the population will be most affected not only by the virus, but also by the economic and social aftermath. Especially for this reason, the Liechtenstein Initiative to combat modern slavery and human trafficking, for example, is more important than ever.
Expensive but necessary transformation
In its message on the consultation, the EU once again rightly stressed that this transformation requires considerable financial resources from the economy as a whole. The responsible European Commissioner Valdis Dombrovskis emphasises the great importance of the financial sector as a nexus between supply and demand. But he also says that the financial sector in particular is still not transforming fast enough. The EU is maintaining its ambitious but indispensable goal of a climate-neutral Europe in 2050. This requires a set of instruments to better manage existing climate and environmental risks and to integrate them into the global financial system. The Liechtenstein Bankers Association (LBA) shares this assessment. Action must be taken even more quickly and decisively. Sustainability is the key to transformation and must be advanced resolutely despite the coronavirus crisis. The LBA especially welcomes the fact that this consultation is addressed to all players in the private sector and public sector as well as non-governmental organisations. This means that all relevant stakeholders are equally involved, ensuring that the results are likely to be very broadly based.
International cooperation essential
Similarly to the coronavirus crisis, however, it does not suffice for everyone to work on their own separate solutions. The climate in particular and sustainability in general know no national borders, and they do not affect only individual industries or groups. This means that only a decisive, joint approach can be successful. The European Commission has recognised this and taken the lead. The banks in Liechtenstein and the Liechtenstein Bankers Association support this approach and will continue to make an active contribution.
Consultation on the renewed sustainable finance strategy of the European Union
FC4S Working Paper - Implication of the COVID-19 Pandemic for Global Sustainable Finance