Boris Vujčić: Adapting to climate change has no alternative Speech by Mr Boris Vujčić, Governor of the Croatian National Bank, at the online event "The role of banks in greening our economies", 29 April 2021. * * * Ladies and gentlemen, dear colleagues, Let me first welcome all of you who have gathered in front of your screens and decided to devote a couple of hours to join today’s conference. It is yet another event that the Croatian National Bank organizes jointly with EBRD, with whom we have a long lasting and productive relationship. Both our institutions have recognized our responsibility to put the issue of banks’ role in climate transition into the spotlight, and open a discussion on how banks, other financial institutions, and central banks and regulators can properly address the climate emergency that is already transforming our living and working patterns. Until recently, it was uncommon for central bankers and bankers in general to talk about environmental issues. So, how did we get to this point, and why should we study the dynamics of climate change and environmental degradation and incorporate it into our business decisions? For more than fifty years people have known that the technological advancement and development that we enjoy comes at a price – the destruction of the environment and a perilous rise in global temperatures. As worrisome scientific discoveries heated up the activism and triggered a grass-roots ecological movement, global institutions and politicians soon embraced the environmental concerns as well.
Already in 1972, representatives from 113 out of the UN’s 132 member states convened in Stockholm for the first international conference on human environment. Their decisions, enshrined in a declaration, action plan and five resolutions seemed to be a clear demonstration of their firm decision to fight environmental degradation. From then on, numerous meetings, conferences, agreements, protocols and declarations ensued, the Climate Change Convention was forged, the Kyoto Protocol was adopted, but the outcomes fell short of targets adopted in these documents. It wasn’t until 2015 when heads of states and representatives of 197 countries, being aware of the real possibility that the world was approaching a climate tipping point, adopted the Paris Agreement and committed to make sincere and ambitious efforts to drastically cut their greenhouse emissions to prevent further global warming. The agreement, later ratified by 189 countries, did not only result in those countries’ pledges on GHG emissions, but also in their understanding that engaging in climate change mitigation and adaptation should include a grand coalition of public and private entities devoted to achieving the same goal. Central banks around the world were fully prepared to join this coalition. Mark Carney, then Governor of the Bank of England, was one of the first central bank governors who on the eve of the Paris summit sent a warning message to his peers in his seminal speech about the tragedy of the horizon, a tragedy caused by “climate change, which might threaten financial resilience and longer-term prosperity".