From COP28 in 2023 to WEF this year, the global attention on climate actions could not be more prominent. With 2023 being the hottest year on record, the world now clearly has to face the growing urgency of the global climate crisis. Published a few months ago, the UN Global Stocktake report is alarming and unequivocal: current government policies and commitments put us on track for a global temperature increase of around 2.6?C above pre-industrial levels and the window of opportunity to limit this increase to 1.5?C, the aim of the Paris Agreement, is closing fast.
However, amidst the boiling circumstance, a seismic shift is already in motion. The transition in the private sector is happening at a faster speed and scale than policies. Policies remain key but they are only a part of the picture and we foresee a new economic system emerging that will outcompete the old one.
For investors, the sustainable revolution means that they need to adapt their investment strategy to this new reality. Because what was promising and successful in the past may no longer meet expectations in the future. Yes, a greener, cleaner, more electrified economy requires considerable investment, but these need to be invested in technologies and business models that are very different from those of the past. Investors need to understand the business models of the future and build sustainable portfolios based on this knowledge if they are to participate successfully in the change. If they don't anticipate these changes in time, there will be missed opportunities or, worse still, portfolios will be caught completely off guard.
What is Rethink Sustainability?
"Rethink Sustainability" is a concept under the "Rethink Everything" philosophy of Lombard Odier, a world's renowned private bank currently looking after USD 345 billion worth of total client assets.
Founded in 1796 and having grown through 40 financial crises, the Swiss private bank is uniquely devoted to creating sustainable value for clients through innovative investment solutions. Its key to unweaving stability is to keep re-evaluating and re-thinking everything in the world to provide different perspectives for better investment outcomes.
Lombard Odier believes that The Sustainability Revolution is no longer a mere ideal and is already affecting every sector and every industry. They see no development more significant or more urgent than the need for a fundamental redesign of our economic model, which is currently unsustainable. Our economy must evolve and transition to a more sustainable, regenerative alternative - a future based on a Circular, Lean, Inclusive and Clean model. It is the fiduciary duty of investors to grasp these opportunities whilst understanding and managing the downside risks related to the environmental transition. This is what "Rethink Sustainability" is all about.
Rethink Sustainability Redefining Business Competitiveness
The transition to net zero is the most significant economic challenge of our time. Our planet has been pushed beyond its manageable boundaries and the way businesses and people consume need to radically change to build a new sustainable future. In order to reach the goals set by the Paris Agreement to limit global warming to 1.5?C, CO2 emissions need to reach net zero by 2050. Our global economy must evolve from the patterns of value destruction of the past to become Circular, Lean, Inclusive and Clean - a CLIC(R) economy.
Lombard Odier takes a forward-looking approach to sustainability. Their research shows we must transform our usage of land, energy systems and materials so that we can operate safely within planetary boundaries. What's more, by effectively using carbon pricing as an enabler to encourage capital allocation to transition aligned activities it could be possible to accelerate the transition to net zero.
The good news is that policy action is at an all-time high, support is unprecedented. Hundreds of billions of dollars are being deployed every year by governments to support the transition, for instance through the EU Green Deal, the US Inflation Reduction Act or such as high commitments made by China on current Five-Year-Plan on Renewable Energy Development.
This opportunity is re-shaping risk and return across all sectors. And in order to meet a well below 2? scenario, Lombard Odier expects cumulative investments of USD 34 trillion to be deployed by 2030. Investment risks can be expected to materialize amongst laggards in many industries but Lombard Odier believes that a considerable investment upside will be unlocked as opportunities shift towards companies that are aligned with environmental objectives.
Using this science-based and forward-looking approach, Lombard Odier adapts portfolios to this new economic landscape and creating novel strategies centred on nature-positive and climate-aligned goals.
Rethink Sustainability Underlined at COP28 in Dubai and WEF in Davos
Nature must play a central role in mitigating climate change: nature-based solutions have the potential to contribute to more than a third of the emissions reductions needed by 2030 to limit warming to below 2?C. Being a passionate nature advocate, Lombard Odier saw the 28th annual United Nations Conference of the Parties (COP28) climate change summit in Dubai as a chance to help galvanize action around nature-based solutions, food systems, industry decarbonization, and infrastructure. Aiming at showing investors how developments in these areas will create a net-zero, socially just, nature-positive economy, the Swiss private bank hosted the re-NATURE Hub, a two-day event that shone a spotlight on the crucial role of private capital, policymakers, and key financial actors in meeting the goals of the Paris Agreement.
Speaking at the event, Mr. Hubert Keller, Senior Managing Partner of Lombard Odier Group said, "What we are seeing is that economic systems powered by nature's regenerative approach can outcompete today's economic systems. We fundamentally believe that the transition to net zero is the largest opportunity of a generation."
At the annual World Economic Forum in Davos earlier in January this year, heads of state and leading CEOs also made a consensus on the call for capital to be shifted towards more sustainable practices and business models. It is clear. The global economic conversation today has switched its focus to sustainability.
Mr. Hubert Keller said "Nature is an investment conviction. When it comes to tackling the climate challenge, the world has focused its attention on carbon for more than 20 years. Now we are turning to nature, our economy's most underpriced, and yet most precious, asset,"
Rethink Sustainability in Thailand
More than global gathering stages, the sustainability-led agenda must be discussed and put into actions locally to accelerate nature-centric economic transition and seize economic opportunities across markets and communities.
In Thailand, the attention around sustainability-fueled growth has been particularly driven by KBank Private Banking. Believing in the power of sustainable investment, the partner of Lombard Odier in Thailand is one of the country's leading catalysts for sustainability-based business evolutions.
Mr. Jirawat Supornpaibul, Executive Chairman, Private Banking Group, KASIKORNBANK said "Being in a highly unique position to unlock the change we want to see for the world, investors must realize they are the gamechanger in our race to sustainability transition. Nature is more than worth investing. It's the only world-saving option,"
More importantly, KBank Private Banking sees that beyond financial and investment sector, the nature-driven practices must be adopted fully across sectors and industries. This has redefined the role of the private bank and why they are doing more than just innovating better investment strategies.
Mr.Jirawat said "With our global sustainability-centric network, it is our responsibility to empower not only our ourselves and our clients but also cross-sectorial change agents. Starting from our annual sustainability forum RETHINK SUSTAINABILITY: A CALL TO ACTION FOR THAILAND this February 28, we are to do more than just empowering perspectives. We are calling for real actions."
Bringing together global perspectives and local best practices, the event presented by KASIKORNBANK and KBank Private Banking in partnership with Lombard Odier aims at championing and spring-boarding nature-centric actions across economic and social sectors in Thailand. For those interested in being part of this world-transforming mission, find out more about RETHINK SUSTAINABILITY: A CALL TO ACTION FOR THAILAND at
https://www.kasikornbank.com/en/News/Pages/rethink-sustainability-forum.aspx.