The International Arab Banking Summit “IABS” 2016
“The Effect of Climate Change on Banking & Finance”
29 – 30 May 2016 Rome – Italy The Cavalieri Waldorf Astoria Hotel
Assessing the ripple effects of climate change, it became evident that global warming is altering the world’s vital monetary lifelines, stemming from natural resource exploitation, agriculture, manufacturing, construction, transpiration, to eventually forge the biggest impact on the financial system.
Despite the pessimistic outlooks and immanent threats, the Union of Arab Banks still foresees potential for prosperity in a Green economy, for both developed and emerging markets, that rivals history’s most notorious industrial and technological revolutions.
If a 3°C increase in earth’s temperature impacts by approximately 2 percent global GDP, then maintaining low Celsius thresholds require substantial innovation and resources; a surge in business and political activity that positions the public, private and financial sectors at the forefront of an environmental goldmine.
On one hand, the energy sector represents a beacon of prospects and is estimated to reach between USD 190 and 900 billion per year by 2050. With oil prices disrupting foreign and local markets, the transition towards low-carbon footprint resources shall prosper selective markets and industries from massive investments. One of the instruments orchestrating such transactions, the “Green Bond” market, estimated at US$78 trillion, is expected to rapidly flourish those who gain the required savvy.
On the other hand, stakeholders are not equipped to predict behavior beyond the realm of economics. Per se, governments, regulators, insurers, bankers and traders are destined to assume the role of identifying and assessing climate risks, such as hurricanes, floods, which directly endanger their own and their citizens/customers’ assets.
In Brief, climate financing, estimated at $62 billion, is spurring momentum for those that strengthen their green endeavors. Yet, to reap benefits, specialized expertise and alliances must be formed between stakeholders enabling them to comprehend the varying impacts on their business.
The uniqueness of this summit, is that it unites, government & international body officials, policy makers, central bankers, financial sector decision makers, insurers, prominent investors, business leaders, and renowned stakeholders that are influencing the transition between energy, finance and technology, into one comprehensive event; covering equally the relevant aspects and topics that benefit all participants.
• Understand climate risks and the impact of Paris COP 21 on the global economy
• Identify climate opportunities, challenges on your business
• Gain knowledge from world renowned speakers and practitioners
• Network with more than 300 governmental, baking, technology and industry leaders
• Share insights with prominent public, private and financial sector experts
• Brand your organization as a climate leader to a universal audience and media
Amongst the outcomes of Paris COP 21, 186 countries pledged emission reductions to cover 96 percent of the worlds’ emissions, while the advanced economies decided to contribute—from public and private sources—$100 billion a year by 2020.
IEA’s 2014 “Special Report on the World Energy Investment Outlook” estimates the investments required to achieve the 2 Degree Celsius commitment is to reach US$790 billion per annum by 2020 and to reach US$2.3 trillion per annum by 2035.
As at July 2014, the World Bank (IBRD) had raised US$6.4 billion equivalent in green bonds through 68 transactions and 17 currencies. IFC issues a local currency bond in Peru, and German development bank KfW issues a EUR 1.5 billion green bond aimed at German investors. Zurich Insurance Group to invest up to US$2 billion in AAA rated green bond funds. US firm Bank of America Merrill Lynch (BoA) joins in corporate green bond issuance and sets ten year goal to reach US$50 billion environmental business.
As at August 2014, US$22.2 billion in labeled green bonds had been issued and by the end of that year, their total volume surpassed US$40 billion; rivaling the appeal of the most lucrative investment schemes.
The global banking firm ING Group grows its renewable energy project loan portfolio to more than US$1.5 billion. The Australian bank Westpac commits up to $6 billion for lending and investment in clean technology and environmental services by 2017.
The IMF and the World Bank fashioned spreadsheet tools to quantify, for more than 150 countries, the efficient level of energy taxes to address climate and other environmental costs, and the carbon, fiscal, economic, and broader environmental benefits of reform. According to the World Bank, the annual adaptation costs in developing countries alone are around US$9-41 billion, while as per the UNDP, they can range up to US$86 billion per year.
The size of the investable commercial property market was US$26.6 trillion at the end of 2014. There are estimates that the direct commercial real estate transactional market will exceed US$1 trillion per annum by 2030, compared with 2012 annual volumes of nearly US$450 billion. Real estate accounted for more than a third of the total assets under management by the world’s 100 largest asset managers in 2013, according to a survey of the investment industry by Towers Watson.
1. The Impact of Climate Change: Grasping opportunities & overcoming challenges
• The sectors most affected from Paris Cop 21, positively & negatively.
• The reality of climate change on the banking and insurance sectors’ profitability, opportunities, risks and pitfalls.
• The influence of oil prices in research and development; is the race for alternative energy affected by the price of the barrel?
2. Leading the Green Economy: Understanding trends & managing cost effectiveness and attracting new markets.
• The industry giants’ ability to reduce emissions, the impact on production cost and
ultimately, the bearing on retail prices.
• The role and successes of SMEs and start ups in promoting a green economy.
• The pressures of customer behavior on demand for low carbon foot-print products & services; and their willingness to share the price tag.
3. The “Green Rush”: Investors’ appeal and the skills required to flourish
• The Incentives for Banks to shift portfolios towards low carbon projects and green investments: trends, opportunities and challenges.
• The significance of the Green bond market on the financial system, the investors’ attraction with the knowledge required.
• Investing in Green real estate: Energy efficient buildings versus conventional.
• The role of the food industry in reducing carbon emissions, and which diets are more environmental friendly.
4. Climate Risks: The effects on the economy, roles & responsibilities and mitigation techniques
• The resources and data required to mitigate and identify climate change risks: stress-testing of climate-related risks.
• Carbon sanctioning and the opportunities for reforming energy and environmental policies at the national and sub-national levels.
• The role of international bodies and entities in Combating Climate change: Financial Stability Board, UNEP, IMF, World Bank and others.
5. Key Partnerships: Achieving results and sustaining the momentum
• Achieving the 2 degree Celsius goal: the fiscal policy, monitoring, control and technical & financial support; defining the roles and responsibilities of Governments.
• The adaptations required from regulators and central banks to monitor new green related financial schemes and markets; regulations, policies, monitoring tools & sanctions.
• Public & Private Partnerships: Risks, rewards, Solutions and Recommendations.
Structure of the Summit:
The Annual International Arab Banking Summit will comprise of the following Elements:
Keynote speeches by senior government and banking officials, and leading economic and financial experts from the region and the international community.
Discussion and dialogue moderated by a senior official (Economist, Banker, Media Economist) thus allowing for more informative, and in-depth sessions.
An exhibition for sponsoring institutions, whereby the participating Institutions and companies will be able to establish and develop business ties.