Joe Biden: An Opportunity for Argentina from Sustainable Finance
Joe Biden was very clear in his campaign platform: The United States will return to the Paris climate agreement and will put forward an ambitious plan for the use of renewable energies, which includes the goals of eliminating carbon emissions from energy production industries by 2035 and reaching net zero carbon emissions by 2050.
These examples are part of Biden and Kamala Harris’ wider sustainability agenda, which represents a growing trend that Argentina, with its potential, must take advantage of.
In the time of the pandemic, international funding based on environmental, social and corporate governance criteria — that is, sustainable finance — has become really relevant. Looking at the data gathered during the first half of 2020, Climate Bonds Initiative estimates that, in spite of COVID-19, green bonds emission will increase by 35%. And this trend will grow even more due to the concerns of global investors, the banks and multilateral organizations about social and health care issues.
Practically speaking, it is possible for Argentina to join this trend thanks to its resources and talent. Nonpolluting tourism, organic food, agricultural innovations, circular economies and renewable energies — these are several areas in which our country has the actual possibility to develop. In fact, this year, in our local market, green bonds were issued for more than $100 million. And, if Biden fulfills his promises, things could get even better. Apart from the goal of net zero emissions and the impact it would have on industry and, therefore, on world supply chains, the president-elect of the United States also included in his platform a plan to export clean energy technology and to invest heavily in these projects.
The United States’ economy is huge and one of the most important in the world (in part, due to the fact that many of the most powerful corporations have their headquarters there). This will cause big shifts in every part of the world regarding the use of renewable energies and the transformation of production. Furthermore, Biden and Harris promised to invest $2 trillion in green projects all throughout their term, which implies a very interesting money injection for the sustainable finance market.
If Biden’s ideas are put into practice, the United States will not be acting alone. Last September, China, the world’s biggest carbon-emitting country, announced at the U.N. its plan to reach carbon neutrality by 2060. This way, China will consolidate its continuing efforts regarding environmental issues. The private sector is also supportive. BlackRock, the biggest global investment management corporation, announced that it will focus on sustainable investment and asked more than 500 of the corporations in which it invests for information about the impact they have on the environment. Moreover, Goldman Sachs, another big name, announced recently that it will invest $750 billion in sustainable finance during the next decade. This information could increase awareness of the notion of the triple impact. Considering the Europeans who haven been working on these issues for years, Biden’s promises and China’s plans, some international observers suggest that there may be a historic consensus about the place that funding and sustainability has in the agenda, along with new regulatory frameworks and an unprecedented flow of green and social financial instruments.
Thanks to its potential, Argentina could be part of this new wave of sustainable investment. It is an opportunity it cannot ignore given the many debts Argentina has with its society. Argentines must build and agree on a project for the future of our country, with a clear horizon and ambitious development objectives. In order to do this, we must prioritize our agenda and use all the tools the world gives us. We have what it takes to make it possible.
These examples are part of Biden and Kamala Harris’ wider sustainability agenda, which represents a growing trend that Argentina, with its potential, must take advantage of.
In the time of the pandemic, international funding based on environmental, social and corporate governance criteria — that is, sustainable finance — has become really relevant. Looking at the data gathered during the first half of 2020, Climate Bonds Initiative estimates that, in spite of COVID-19, green bonds emission will increase by 35%. And this trend will grow even more due to the concerns of global investors, the banks and multilateral organizations about social and health care issues.
Practically speaking, it is possible for Argentina to join this trend thanks to its resources and talent. Nonpolluting tourism, organic food, agricultural innovations, circular economies and renewable energies — these are several areas in which our country has the actual possibility to develop. In fact, this year, in our local market, green bonds were issued for more than $100 million. And, if Biden fulfills his promises, things could get even better. Apart from the goal of net zero emissions and the impact it would have on industry and, therefore, on world supply chains, the president-elect of the United States also included in his platform a plan to export clean energy technology and to invest heavily in these projects.
The United States’ economy is huge and one of the most important in the world (in part, due to the fact that many of the most powerful corporations have their headquarters there). This will cause big shifts in every part of the world regarding the use of renewable energies and the transformation of production. Furthermore, Biden and Harris promised to invest $2 trillion in green projects all throughout their term, which implies a very interesting money injection for the sustainable finance market.
If Biden’s ideas are put into practice, the United States will not be acting alone. Last September, China, the world’s biggest carbon-emitting country, announced at the U.N. its plan to reach carbon neutrality by 2060. This way, China will consolidate its continuing efforts regarding environmental issues. The private sector is also supportive. BlackRock, the biggest global investment management corporation, announced that it will focus on sustainable investment and asked more than 500 of the corporations in which it invests for information about the impact they have on the environment. Moreover, Goldman Sachs, another big name, announced recently that it will invest $750 billion in sustainable finance during the next decade. This information could increase awareness of the notion of the triple impact. Considering the Europeans who haven been working on these issues for years, Biden’s promises and China’s plans, some international observers suggest that there may be a historic consensus about the place that funding and sustainability has in the agenda, along with new regulatory frameworks and an unprecedented flow of green and social financial instruments.
Thanks to its potential, Argentina could be part of this new wave of sustainable investment. It is an opportunity it cannot ignore given the many debts Argentina has with its society. Argentines must build and agree on a project for the future of our country, with a clear horizon and ambitious development objectives. In order to do this, we must prioritize our agenda and use all the tools the world gives us. We have what it takes to make it possible.
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