COMMENT: Yan Swiderski explains what led him to co-found the Global Returns Project, a new initiative aiming to generate $10bn annually to tackle the climate crisis
I spent most of my career working as a fund manager, investing in countries all over the world. I thought my activities were helping achieve something good, using finance and business to help create development and lift people out of poverty.
But despite being proud of my work, I could also see that there were big problems being caused by the companies and countries we were investing in – problems of deforestation, pollution, habitat loss and climate change.
I became increasingly concerned about the climate crisis, and five years ago left my life in finance behind to run an organic farm and rewilding project in Cornwall.
Money that is involved in sustainable finance initiatives only addresses a niche number of the problems presented by climate change
Soon after I left, however, I began to wonder if – instead of leaving the system – I should find a way to use it for the benefit of the planet.
It’s true that I’m not the first to come to this conclusion. Many organisations are already divesting from fossil fuel companies, and the world of sustainable investing has matured: investments in ESG, impact funds and green bonds are now possible and popular.
I’ve seen the reality of these improvements first-hand. But the fact is the system is still flawed. For a start, only a minority of investments align with these sustainability initiatives at all.
Money that is involved in sustainable finance initiatives then only addresses a niche number of the problems presented by climate change. There is no market mechanism in place for suing polluters, for example, or for protecting the rainforests and other habitats. That’s a role filled by not-for-profit organisations.
Meanwhile, many fund managers still see their job as maximising returns to the exclusion of all these other considerations.
I voiced my concerns to my friend and fellow ex-financier, Jasper, and together we concluded that the way we invest in climate initiatives needs to change.
We knew that global private savings and investments represented approximately $140tn. So we decided to launch the Global Returns Project and empower individuals to channel some fraction of that funding into the most effective climate projects.
Our initiative encourages people to reinvest in the Earth by committing 0.25% of their savings and investments annually to fund not-for-profit climate solutions.
Behavioural science tells us that if we normalise reinvesting in the Earth, more of us will choose to participate
Some quick maths reveals that, by reinvesting in the Earth, just 3% of people with savings could raise a staggering $10bn every year for those powerful not-for-profits. If corporate organisations sign up, the gains could be even bigger.
That money could be used to protect and support natural systems, while governments and businesses catch up and make the necessary changes.
Financial institutions have a critical role to play in this initiative. Some leading figures in the industry are saying governments need to take more action on climate change. But the industry itself can take meaningful steps today to tackle the climate crisis by encouraging their clients to reinvest in Earth.
Behavioural science tells us that if we normalise reinvesting in the Earth, more of us will choose to participate. So in giving their clients the ability to easily commit that 0.25% of savings and investments, financial institutions will make a small change with massive implications for funding climate initiatives. That’s how we get to $10bn every year: by making reinvesting in the Earth normal and easy for everyone.
Yan Swiderski's organic farm and rewidling project in Cornwall.
More and more, the realities of extreme weather, flooding and natural disasters – along with the warnings of high-profile public figures such as David Attenborough and the Prince of Wales – reveal the need for immediate climate action. And research shows that donating to climate charities is the most effective personal action someone can take to help tackle the climate crisis.
Reinvesting in the Earth allows individuals to make a meaningful difference in combatting the climate emergency. And with financial institutions on board, we can increase that critical climate funding exponentially.
We are on the brink of a breakthrough in the effort to address climate change. And everywhere I look, I see evidence that we’re ready to change the way we fund climate solutions. Financial institutions such as BlackRock want to tackle the climate crisis. Savers and investors want to do the same by mobilising their assets.
I know that real change is within reach, and together, we can fund climate solutions at incredible scale.
Yan Swiderski is co-founder of the Global Returns Project. He was one of the founders of Finisterre Capital, where he was CEO and managed global portfolios investing in over 50 countries, primarily in developing markets.