" "BIOGRAPHIESRobert Tacon spent over 35 years in the bankingindustry, with some 27 years with Standard CharteredBank, before retiring in March 2007. During his lastten years with Stanchart, he initiated itsenvironmental risk management policies andprocesses, which were eventually expanded to coversocial and climate change issues. Mr Tacon alsointroduced the Equator Principles into StandardChartered and was the bank's representative withUNEP FI from 2001. He was the Treasurer of theInitiative for two years, before taking on the role ofChair in 2007. He stepped down in December 2009after hosting the highly acclaimed UNEP FI GlobalRoundtable conference in Cape Town in October2009. He is is the Managing Director and founder ofBoundes Sustainability Limited - a company thatprovides training, policy development and climatechange solutions primarily to the banking industry -and continues to have an advisory role with UNEP FI.Paul Clements-Hunt has been the Head of the UNEPFinance Initiative since November 2000. UNEP FIwas instrumental in the 2004-06 development andlaunch of the UN Principles for ResponsibleInvestment (PRI). The PRI is now backed by over400 institutional investors representing more thanUS$16 trillion in assets under management. MrClements-Hunt, who was one of the two lead UnitedNations representatives throughout the PRInegotiations in 2005-06, sits as the UNEPrepresentative on the PRI Board.FINANCE053IN TERMS OF DOMESTIC POLITICAL HORSE-TRADING IN THE US, THE ACHIEVEMENTOF BRINGINGTHESE MAJOR DEVELOPING COUNTRIESDEEPER INTO NEGOTIATIONS WAS A SIGNIFICANTSTEP FOR THE US PRESIDENTglobal deal has shifted from the UN COP16 in Cancunto the COP17 meeting in South Africa at the end of2011. As the Financial Times2puts it: "Hopes ofenacting a US climate change law this year havedimmed. Circumstances conspire against it, and evenif conditions were helpful, no measure that raises thecost of carbon-based energy - as any meaningful lawmust do - is ever going to be wildly popular."Despite the rollercoaster ride of the global policyprocesses around climate change, and the fact manypolicy questions remain, there is a feeling abroad insome of the smartest and most forward-looking cornersof the investment universe, that a line in the sand hasbeen crossed for carbon. Those investors who oftenlead the "finance and investment herd" rather thanforming part of it, understand that a carbon-constrained future will be part of investment realityand are positioning for that. Despite the crucifyingnature of 2007-8, the uncertain rebound of 2009, andthe crushingly difficult fundraising environment of thepast few years, notable examples spring to mind.Investor George Soros, who sits on the UN SecretaryGeneral's climate finance group, spoke to a privatedinner at the World Economic Forum meeting in Davosin January 2010, a few weeks after the anticlimacticlast few hours at Copenhagen. The philanthropiststressed the need for innovative solutions from publicand private actors. He then sketched one such climatefinance solution in terms of turning the US$30 billionin "quick start" public financing promised atCopenhagen into a US$100 billion climate fund,through a non-orthodox use of the Special DrawingRights of the International Monetary Fund (IMF). Equally, one of the most respected investors in the Cityof London, Stanley Fink, formerly of the UK's ManGroup (one of the largest hedge fund groups in theworld), has been active in the past two years providingseed funding for two environmentally focusedcompanies that base their investment philosophy onopportunities connected to a transition to a low-carbon, resource-efficient economy. If anecdotalevidence is to be believed, there is a growing group ofhard nosed, mainstream investors who have got themessage that return on investment and responsibilityof investment - the two ROIs - can be aligned, andthat alignment starts in the carbon markets withopportunities linked to climate change.And there is one more important positive whichfinance and investment can take from Copenhagen. Itis the fact that US President Obama did return fromthat windy, wet and cold capital with something neverachieved before - the BRICs3at the "emissionsreduction table". In terms of domestic political horse-trading in the US, the achievement of bringing thesemajor developing countries deeper into negotiationswas a significant step for the US President. Closing itsrecent editorial on the prospects of a climate bill in theUS in 2010, the Financial Times did offer up thesmallest glimmer of hope: "It goes without saying thata cap-and-trade law or, better, an outright carbon tax,is needed and eventually it will happen. Afterhealthcare, nobody should say the chances of reform in2010 are nil, but the odds look long.4" n1 On 17 December, 2009, the Board of the Principlesfor Responsible Investment (PRI), an investorpartnership backed by more than US$20 trillion inassets, wrote to heads of government in Copenhagento express their frustration at the limited engagementat CoP15 between climate policy-makers and theinvestment community. The PRI is an investorinitiative in partnership with UNEP Finance Initiative(www.unepfi.org) and the United Nations GlobalCompact (www.unglobalcompact.org/).2 "A carbon long shot," Financial Times page 8, 17May, 2010.3 BRIC, an acronym first used by Goldman Sachs'Chief Economist Jim O'Neill in 2001 to capture theeconomic exuberance of Brazil, India, China andRussia, with South Africa added later by someobservers to form BRICS.4 "A carbon long shot," Financial Times page 8, 17May, 2010.
""n a new, fast-evolving multi-polar globaleconomy, climate change policy can winsupport from developing countries forlow-carbon growth, "but not if it isimposed as a straitjacket", emphasised Robert B.Zoellick, President of the World Bank Group, speakingat the Woodrow Wilson Centre for InternationalScholars in Washington D.C..The world economy is rebalancing. Some of this is new.Some represents a restoration. According to AngusMaddison, Asia accounted for over half of world outputfor 18 of the last 20 centuries. We are witnessing amove towards multiple poles of growth as middleclasses grow in developing countries, billions of peoplejoin the world economy, and new patterns of integrationcombine regional intensification with global openness. This change is not just about China or India. Thedeveloping world's share of global GDP in purchasingpower parity terms has increased from 33.7 per cent in1980 to 43.4 per cent in 2010. Developing countriesare likely to show robust growth rates over the next fiveyears and beyond. Sub-Saharan Africa could grow byan average of over 6 per cent to 2015 while SouthAsia, where half the world's poor live, could grow by asmuch as 7 per cent a year over the same period. ECONOMIC SHIFTS MEAN POTENTIALPOWER SHIFTS Increased income and growth in the developing worldmeans increasing influence. The old world of firesidechats among G-7 leaders is gone. Today's discussionrequires a big table to accommodate the keyparticipants, and developing countries must haveseats at it.Today, we already see the strains. The Doha WorldTrade Organisation round and the climate change talksin Copenhagen revealed how hard it will be to sharemutual benefits and responsibilities betweendeveloped and developing countries. Those debatesalso exposed the diversity of challenges faced bydifferent developing countries. In discovering a new forum in the G-20, we must becareful not to impose a new, inflexible hierarchy on theworld. Instead, the G-20 should operate as a "SteeringGroup" across a network of countries and internationalinstitutions. It should recognise the interconnectionsamong issues and foster points of mutual interest.This system cannot be hierarchical, and it should notbe bureaucratic. It also must prove effective by gettingthings done. THE DANGER OF GEO-POLITICS AS USUALThe danger of the political gravity dragging countriesback to the pursuit of narrow interests is that we addressthis changing world through the prism of the old G-7;developed country interests, even if well-intentioned,cannot represent the perspective of the emergingeconomies. We cannot afford geo-politics as usual. A "New Geopolitics of Multipolar Economy" needs toshare responsibility while recognising differentperspectives and circumstances, so as to build moremutual interests.CLIMATE CHANGE Take climate change: The danger is that we take a ruleA MOVE TOWARDSMULTIPLE POLESOF GROWTHWE STILL LIVE IN A WORLD OF NATION-STATES.BUT THERE ARENOW MORE STATES WIELDINGINFLUENCE ON OUR COMMON DESTINY054FINANCEIROBERT B. ZOELLICK, PRESIDENT, THE WORLD BANK GROUPPhoto: The World Bank Group