Climate Action, Institutional Investors, and Just Transition

Abstract

Is there a real climate action after Sharm el–Sheikh COP27 (27th Conference of the Parties) and Davos Forum meetings, assisted by institutional Investors? In 1930, John Maynard Keynes wrote, “the World has been slow to realize that we are living this year in the shadow of one of the greatest economic catastrophes of modern history” (Keynes [1930] 2010). Ninety years later, the world endured the international Great Financial Crisis 2007–2009, COVID-19, and the post pandemic era. The Green Keynesianism (GK) and the Just Transition (JT) discussion since the Paris Agreement gained importance. A variety of institutions affiliated with the banking and finance sectors are calling for actions, processes and instruments of finance and investment oriented towards climate change to be aligned with JT. The argument is that GK policies will be crucial to making JT a reality as the scale and pace of finance has implications for both the impact and process of transitions This article explores the new developments in climate action financing by institutional investors. In planning the post-COVID recovery there is an opportunity to transit on a pathway of development that tackles climate change, protects the environment, and ensures the long-term health and security of humankind.