How Financial System Can Save Our Planet

Despite the imminent threat of climate change, it is business as usual for our corporates in the financial sector. FILE PHOTO | NMG

By Business Daily

Do you know that humanity has less than 11 years to avert irreversible and catastrophic effects of climate change? This sounds scary but scientific evidence shows that man’s irresponsible investment, production and consumption have placed the earth’s system under immense strain.

Unless concrete action is taken by our species within this limited period, our planet is headed for a shutdown and with it, our own existence. The Amazon, California and Australian fires and melting of glaciers in Pakistan are all telltale signs of this looming apocalypse.

The United Nations had warned as much about the impending doom in its last year’s General Assembly’s Meeting and called global community to action. The Climate Change Action Campaigners such as the 16-year old Greta Thunberg and civil societies are also continuously adding their voices to call for prompt action without commensurate reaction.

According to World Bank estimates, extreme climatic conditions could cost the Kenyan economy equivalent of 7 percent of its GDP by this year, 2020. The National Climate Change Action Plan 2013 estimates that the total investment required for climate change mitigation up to 2030 is between Sh1.4 trillion and Sh1.8 trillion.

This is a colossal sum of money that could have gone to other investments if we had incorporated sustainability issues into our consumption and production of capital from the onset. At the heart of our planetary troubles is our financial system which includes the commercial banks, insurance, capital markets, Saccos and sector regulators. These market players and regulators play a pivotal role in capital allocation, managing risk and mobilizing savings and investments. However, the financial system is dependent on other sectors of the economy. Read more>>

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