Developing nations that have contributed the least to the climate crisis have been facing devastating floods, drought and wildfires. These extreme weather events are causing infrastructural damage and economic losses to the most vulnerable communities.
COP28 began with a historic agreement on a loss and damage fund to help developing countries cope with the effects of climate change. So far, roughly $720 million has been pledged to the fund, with notable contributions from the United Arab Emirates, Germany, and the United States. While this is a step in the right direction, we need a leap. This year alone, climate-related damages have incurred costs nearing $400 billion, highlighting the urgent need to scale investment. We need a huge collaborative effort from governments, financial institutions and businesses to accelerate funding.
Financial institutions play a crucial role here. Not only can they contribute to the loss and damage fund, but they can divest away from fossil fuels and invest in projects and initiatives that improve adaptation efforts.
Banks also play an important role in guiding customers towards more sustainable and economic choices. Personal finance and carbon emissions are deeply connected. Each purchase we make has a carbon footprint. However, there is a notable lack of carbon literacy among individuals. Many struggle to understand their environmental impact. This causes an intention-action gap, where people want to reduce their impact but don’t know how to take action.
Banks can help bridge this gap by educating customers about the carbon footprint associated with their spending. This not only empowers customers with information to make more sustainable choices, but it also helps them save money.
Despite the popular misconception that sustainable lifestyles are more expensive, research consistently shows that climate action leads to cost savings. Whether it’s choosing more energy-efficient appliances or reducing waste, the benefits are two-fold. For example, turning your thermostat down by 2 degrees can save your household 463kg of carbon and £222 annually.
In supporting customers to adopt more sustainable habits, banks not only fulfil their duty to help their customers save money during the ongoing cost of living crisis but also acknowledge their role and responsibility in the climate crisis.
The path forward requires a collective effort, and banks are at the forefront of this movement. By aligning financial strategies with climate goals, they can drive the transition towards a sustainable and resilient global economy. They can also help customers on their own personal sustainability journeys. In doing so, they not only secure the financial health of their customers but also contribute to the health of our planet, ensuring a stable and prosperous future for all.
Join the movement for a greener future, and get in contact with Cogo today. Your customers—and the planet—will thank you.