Bezos Fund CEO joins calls to restart climate development banks
- Andrew Steer calls on governments to offer more guarantees
- Development banks must undergo “disruptive change”
- System currently “not large enough” to play its necessary role
GLASGOW, Nov.11 (Reuters) – The head of Amazon (AMZN.O), Amazon’s $ 10 billion Bezos Earth Fund (AMZN.O), has joined calls for governments to they take more of the risk of financing climate action and help the world’s development banks become more flexible in their approach.
Policymakers at the United Nations climate conference in Scotland are pushing private sector investors to use their trillions of dollars in capital to help drive the transition to low carbon economies in emerging markets.
In developing economies, these projects often carry more risk than in more developed markets and require assistance from supranational development banks – whose lending processes may not have been adapted to the challenges of climate change. Read more
“We have to think about systemic change every now and then, and I think the time is right,” said Andrew Steer, CEO of Earth Fund, a former World Bank executive, on the sidelines of the COP26 talks. .
“There’s usually a certain inertiaâ¦ a certain path dependence and we need toâ¦ have a little more disruptive change.”
He said a “very good” option could be to use government guarantees, which could be provided as quasi-capital to banks, allowing them to leverage their investable funds.
Larry Fink, managing director of BlackRock (BLK.N), the world’s largest asset manager, has also previously urged governments to rethink the role of multilateral lenders. Read more
Fink said he wanted banks to be allowed to take more risk, which would give private sector investors more protection.
Steer’s call follows last week’s announcement that banks, asset managers and insurers with $ 130 trillion have pledged to align their investments with the UN target achieve ânet zeroâ greenhouse gas emissions by 2050.
Currently, very little of that capital is likely to be allocated to emerging markets, Steer said.
He said the development banking system was “not big enough to play the role it needs to play,” and more innovative thinking was needed.
“At the moment, we are not getting the leverage of public funds on multilateral development banks as we should,” Steer said. “We have toâ¦ organize some very serious thinking about this.”
Last week, the Earth Fund pledged $ 2 billion for projects to restore land and strengthen food systems, adding to a $ 1 billion pledge in September to help protect biodiversity and fund communities. conservation projects.
Reporting by Simon Jessop; Editing by Kevin Liffey
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