Ruthless movement of global capital is blamed for the continual turmoil in financial markets, precipitating financial crises that run the gamut from Asia in 1997 to the current European debt crisis.
However, banker-turned-environmentalist Takejiro Sueyoshi said that the world economy remains powered by banking and finance, which can change course and redirect global capital flow into greener industries.
During a recent symposium in Tokyo on the upcoming United Nations conference, known as Rio+20, Sueyoshi, a senior adviser to the U.N. Environment Program’s Financial Initiative, said that one of the key elements of Rio+20 will be to define the financial world’s role in achieving what it calls the “green economy.”
“It is our business activities that have caused almost all of the environmental problems today, and in order to change course, we must change the paradigm of the business world,” Sueyoshi told the audience during the conference. “In order to do so, the current paradigm of banking and finance, which is the backbone of all business activities, must first change to take more responsibility for the world’s future.”
In the two decades since the 1992 Earth Summit, the world has undergone a series of global crises, from the 1997 Asian Financial Crisis, the food and energy price crisis in the 2000s, to the current global financial crisis, which is thwarting efforts to achieve a more sustainable development.
The U.N. Conference on Sustainable Development (Rio+20), the 20-year follow-up to the historic 1992 Earth Summit, will run from June 20-22 in Rio de Janeiro, Brazil, amid the European debt crisis, which is again underscoring the volatility of today’s world financial markets.
During Rio+20, UNEP will launch the Natural Capital Declaration, committing financial institutions to work toward integrating natural capital consideration into financial products and services.
In an interview with AJW, Sueyoshi, the 67-year-old former president of Bank of Tokyo-Mitsubishi Trust, who then served as deputy president of Nikko Asset Management, also voiced his regrets over what he sees as a drop-off in the government’s commitment to global efforts to combat climate change and in public concerns over environmental issues.
“Amid the global financial crisis, and especially after the March 11 disaster last year, the Japanese public apparently thinks that the global effort to combat climate change and other environmental challenges are now ‘off the track,’ ” he said.
But despite the series of turbulent events during the past decade, other advanced economies have made steady progress in shifting to natural energy and creating frameworks to encourage ecology-minded businesses, Sueyoshi said.
“This is not just a moral issue, but they see it as an opportunity for business and investment. It will be a crucial mistake for Japan to single-mindedly declare a ‘truce’ in the world’s fight against environmental problems.”
Asked how the global financial sector would break free from its emphasis on short-term profits, Sueyoshi said a good example can be found in the roles Japan’s banks played during its post-war recovery.
With a long-term vision to achieving sustainable development, banks allotted the country’s then limited financial assets to energy, shipping, iron-making and other industries that could become the driver of the economy, he said.
Looking back on his days as a banking executive, Sueyoshi, however, voiced regrets that such high-minded efforts gave way to investment tactics for short-term profits during the asset-inflated bubble economy. Unfortunately, the global financial world has repeated similar mistakes as seen in the subprime lending crisis of the late 2000s.
“The financial world must return to its basic principle that it is entrusted with money from the entire society and it is responsible for spending it in a manner that can bring about a better future,” he said.
“And a better future clearly lies in the green economy; not in the profit- or growth-only economy.”
Just as the financial world must change, the Japanese public must alter its negative view of eco-related businesses as hypocritical, to move forward on the creation of a green economy.
“It’s true that many countries and parties find a green economy as a business opportunity, but I want to ask those criticizing this as hypocritical if they really think humans can be motivated only by good intentions,” Sueyoshi said, smiling.
“The problem facing the world is so formidable that it takes not only our consciousness but also the dynamism of economics. In other words, we need to create a business world in which eco-friendliness turns into profits.”
During Rio+20, Japan plans to make nine proposals to achieve sustainable development, including adoption of the framework to “share with the international community the lessons and experiences from the Great East Japan Earthquake.”
While they sound like “please everyone” promises, Japan will again be a negligible party in the conference, as the world will give a cold reception to a country that refuses to shoulder its responsibility in efforts to combat climate change, Sueyoshi said. Japan refused to commit to extending the goals of the Kyoto Protocol, which set targets for cutting greenhouse gas emissions, after 2012.
“It was a clear strategic mistake that Japan refused to accept fresh binding targets after 2012, giving in to voices from the domestic business community,” he said. “International opinion will only begin to grow harsher on Japan, unless it makes a substantial commitment to the international efforts.”
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