Less finger-pointing, more action needed at upcoming COP29: LGT’s Prince Max
Everybody has an opportunity and a responsibility to contribute as climate change is a global problem, notes prince
THERE needs to be less finger-pointing and more action during the upcoming United Nations climate change conference in November at Baku, Azerbaijan, said Prince Maximilian of Liechtenstein, chairman of Liechtenstein-based private banking and asset management group LGT.
“What I hope for is less talk, more action. At the end of the day, we are facing a gigantic global problem, and everybody has an opportunity and a responsibility to contribute to this large global challenge. And so we need less discussion, less finger-pointing about what others should do. And instead, we all need to ask ourselves, ‘What can we do?’,” said Prince Max in an interview with The Business Times.
The prince, who was recently in Singapore to attend LGT’s climate change conference, was responding to a question on what he hoped would come out of discussions at the COP29 summit, given his role as the head of a financial institution – with US$375.7 billion of assets under management as at Dec 31 last year – that is owned by the royal family of Liechtenstein, as well as being a member of the royal family himself.
On top of the agenda at this year’s climate conference is to set a new global climate finance goal from the current US$100 billion every year.
In 2009, developed countries had agreed to mobilise this amount of money every year to fund climate initiatives in developing countries – a target that was not reached until 2022.
With the adoption of the Paris Agreement in 2015, countries agreed to set a new target that takes into account the needs and priorities of developing countries by 2025, but no specific figure has been identified yet. The thorny issue around how much funding should be channelled towards developing countries and who should pay is set to take centre stage, once again, when the world’s governments and climate activists gather in the capital of the fossil fuel-dependent country.
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Developing countries have long argued for more financial support as they bear the brunt of climate change impact, and yet lack the resources to implement ambitious climate action.
Meanwhile, a grouping of 23 high-income countries, historically responsible for the current carbon stock and also jointly responsible for making these financial contributions, says that there are other countries today that have the financial capabilities to contribute to this goal and that are also bigger carbon emitters.
Liechtenstein is not among this grouping of high-income countries.
Amid his call for less talk and more action, Prince Max said that emerging countries have the benefit of learning from the mistakes of developed countries.
“The dumbest thing they can do is copy the mistakes that the developed countries have made, and the best thing they can do is to leapfrog and develop and build their economies in a more sustainable way,” he added.
As European banks as a whole do not have a large market share in Asia – a region made up of mostly emerging-market and developing economies – he said that LGT can best help support the region’s decarbonisation through its private banking business. This involves working with its wealth clients based in the region on what it means to invest with sustainable long-term returns.
“And if you take the long-term perspective, then clearly, environmental, social aspects are very important. Hence, we believe that those important dimensions should be sensibly integrated into investment and business decision-making,” he said.
Besides private banking, LGT also has a philanthropic arm, where 10 per cent of its dividends is deployed as philanthropic capital.
The prince said that there are many environmental and social challenges that cannot be addressed through conventional business models. This is where philanthropic capital has an important role to play.
As a lot of wealth created in Asia has been more recent, he has found growing interest in developing the right philanthropic models among LGT’s wealth clients in Asia.
“Blended finance is one area where philanthropic capital can play a role... especially to develop new technologies, new business models. It is helpful to have capital available that doesn’t require market returns, and can be more forgiving than classic, traditional investment capital,” he said.
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