Called the “Sleeping Financial Giants” Initiative, the participants learned about two types of “sleeping giants” – critical ecosystems in the planet that are in danger of being pushed over a tipping point of ecological collapse (also referred to as “tipping elements”), and the financial giants that have a large influence on the health of these critical ecosystems. With support from VINNOVA, Sweden’s government agency that funds research and development, and several other Swedish foundations such as the Futura Foundation and Erling-Persson Family Foundation, a public symposium and closed seminar were held in Japan on these two days.
Held at the University of Tokyo, this public symposium was attended by about 50 participants, from various backgrounds such as academia, civil society, and the media. Following the opening talk by Fumiko Kasuga (Tokyo Global Hub Director, Future Earth) on the purpose and background of the initiative, there were three talks on climate science and how the finance sectors affects, and is affected by “sleeping giants.” Seita Emori (Deputy Director of the Center for Global Environmental Research, National Institute for Environmental Studies) kicked off the symposium with a talk focusing on the Paris climate agreement and achieving the 1.5 degree (Celsius) target. He showed how there is still a gap between current pledges to the Paris agreement by member countries and what is necessary to achieve a 2 degree or 1.5 degree goal. He also emphasized the difference in impact between 1.5 and 2 degrees warming: Although it is only a 0.5 degree difference, effects are to be much worse in a world that is 2 degrees warmer. He concluded with the fact that achieving a less than 1.5 degree world is an opportunity to accelerate measures towards a sustainable society.
Will Steffen (Emeritus Professor, Australian National University) delivered a talk titled, “The Anthropocene: Where on Earth are we going?” highlighting the fact that we have entered the Anthropocene: a geological epoch that is dominated by human influence on the Earth System as a whole. As evidence, he showed the abnormal rates of temperature increase and current mass extinctions. He also mentioned the possibility of reaching an almost uninhabitable “Hothouse Earth” state if we continue our current emissions of carbon dioxide, and how we must fundamentally change our economic system to be equitable and regenerative by design. Finally, Victor Galaz (Deputy Director, Associate Professor, Stockholm Resilience Center, Stockholm University) detailed how big finance shapes the Earth System. He showed how tipping elements in the Earth System, i.e. “sleeping giants” are associated with major biomes such as the Amazon rainforest and boreal forests in Canada and Russia. These ecosystems are in danger of tipping toward practically irreversible shifts through soy and cattle grazing in the Amazon, and the wood, pulp, paper sector in the boreal forests. There are several financial giants that have influence in several “tipping elements” at the same time through their shareholdings. He also indicated significant money flow into economic activities in those areas through tax heavens. Participants then engaged in a lively Q&A discussion session.
On the closed seminar that was held on 6 March, in the central business district of Tokyo, more than 30 participants from various financial institutions and services as well as the academic bodies came together to learn about the impact of the finance sector on the Earth System and to discuss how to promote dialogue and collaboration between academia and financial businesses. Presentations by academic experts focused on the importance of achieving sustainable societies and an assessment of how far we are from there, and how to get there. For example, Seita Emori showed that humanity must achieve a zero-carbon future by the latter half of this century to limit global average temperature rise to within 1.5 degrees Celsius. Norichika Kanie (Professor of Keio University Graduate School) explained that the Sustainable Development Goals can be a common language for companies to express legitimacy and the public nature of a company’s activities. Some Japanese companies have even started to incorporate SDGs into their management strategy.
Will Steffen emphasized the “sleeping giants” or tipping elements such as the Amazon rainforest, and boreal forest, the current factors that threaten their stability (i.e. deforestation and climate change), and how data shows that a tipping point may already be approaching and that even a domino-effect is possible. The sleeping giants could also cut the remaining carbon budget of the planet in half, allowing for only about 10 years of emissions to meet the Paris climate agreement targets. Victor Galaz’s talk focused on the role of the global and Japanese financial sector in the crucial tipping elements of the Amazon rainforest, boreal forests, and Borneo tropical forest. His team found that in 6 of the 30 publicly listed companies, the “financial giants” represent the largest single stockholder. His work shows that there is an opportunity for the financial sector to have a big impact on the global climate through climate leadership.
After the four presentations by the academic experts, the participants were divided into three groups for a discussion session, the theme being “what the finance sector and Earth System science can do for a sustainable Earth environment and the society.” Group discussions led to the conclusion that finance has the opportunity towards building a sustainable future. On the other hand, the participants claimed the following things are needed:
- to develop the ways to facilitate the dialogue between Earth System science and finance such as some interpreters, common vocabulary and time scales;
- for academia to show the economic losses or implications deriving from climate change impacts to influence the related industries to make the dialogue more tangible and concrete;
- for academia to summarize development of the global practices around the environmental issues and how they would fit in a Japanese context;
- the inclusion of other stakeholders (i.e. financial institution’s customers) voices
- establishment of a consortium between industry and academia; and
- necessity of incentives through government support with policy for finance to contribute to a sustainable future.
The Sleeping Financial Giants Tokyo closed seminar was the fourth in a series after holding similar events in Stockholm, New York, and London. It was the first in Asia. This may be the first attempt ever in Japan to organize a dialogue between finance and Earth System science. The participants represented the mainstream finance businesses including mega banks, public financial bodies, investment banks, major asset managers, investment index companies, and foreign players active in Japan. As another major achievement, Future Earth established a quite broad network and relationships with the financial businesses and others like think-tanks through this initiative. It will provide powerful leverage for academia to collaborate with the finance sector to contribute to sustainability.
Participants strongly agreed on the need for collaboration between the finance sector and Earth System science towards a sustainable future and on continued dialog for sustainability.