Action on climate change could release $14 trillion into global economy

Lord Dr Michael Hastings CBE has called on treasurers and finance professionals to come together to meet the sustainable development goals by 2030 and “unleash $14 trillion” into the global economy.

“All the economic assessments say if we meet the Sustainable Development Goals by 2030, we unleash $14 trillion of new resource into the global economy.”

“That is four times greater than the annual revenues of the United States of America which we release into the global economy. And if we were to do that, that would not only create 600 million new jobs, it would create a burning platform of consumerism,” Lord Hastings added.

Indeed, he was keen to emphasise that action climate change presented an opportunity for businesses to grow. Lord Hastings believed that protecting the planet would help drive prosperity in less economically developed countries and that business should embrace this.

“The poorest people in the world, when they get the opportunity, one of the first things they do is buy toothbrushes and deodorant,” he said. “Just think of what that means for Procter and Gamble, Unilever and for Colgate – it’s fantastic!

“These companies have grown on the back of wealth, as we’ve seen from China, India, from parts of the world that have become more prosperous. If we can drive prosperity and hold also civic duty, companies will benefit, profits will grow. But if we don’t take care of the bottom of the pyramid, we all pay a bigger price,” he said.

Speaking at the Treasury Leaders Summit in London , Lord Hastings argued that for the $14 trillion to be released, treasurers had to start looking further into the future as the climate crisis moves ever closer.

“The biggest global catastrophe facing us now is not nuclear war, we’re highly unlikely to have nuclear war, but we’re highly likely to be swamped by relentless rain, or by a planet that is no longer producing the food we need, either because it’s super dried up or super whacked up,” Lord Hastings said. “And these things are global impacts that require global solutions and require human responsibility beyond individual prosperity.

“Then those who are responsible for treasury are going to be asking if this cataclysmic thing which is coming down the road is going to damage us all deeply and it is. Therefore, it’s going to pull away at the profits and resources of a company.

“That requires a much greater sense of common vision and therefore has to fall on corporations, companies and institutions to choose to work together for the better common good like the Sustainable Development Goals,” he added.

Uncertainty requires ‘humanity’

In uncertain times such as these, Lord Hastings urged treasurers to maintain their “humanity” and called on treasury leaders to invest in people.

“How do you retain your humanity in uncertain times? There is a deep need not to separate the responsibilities of individuals as citizens, from the duties of people fulfilling their jobs as treasury leaders to keep those two things in tandem.

“Very often it falls on those who have financial authority to constrain costs, but because of uncertainty, investment is held back, training is held back, recruitment is held back. But, the greatest assets, we always see in any organisation, are its people.”

However, Lord Hastings argued that too often the value of people is lost on treasurers and financial controllers and that had to change as uncertainty continued.

“But truly, we don’t really believe that [people are the greatest asset], because treasury leaders often push the view that the greatest asset is a better balance sheet. The greatest asset is just ensuring you hedge against further debt.

“I would say that in times of uncertainty, we need to be more invested in the development of people’s skills and potential, more invested in their security and their futures,” Lord Hastings added.