February 20th marked the World Day of Social Justice, yet the pandemic, which has claimed 2.5 million lives to date, has further exacerbated global inequalities, with higher infection and death rates in poor neighborhoods. The G7 leaders meeting this Friday will have to answer to United Nations Secretary-General Antonio Guterres’ remark: “130 countries still have not received a single dose of vaccine, while 10 countries have administered 75% of all vaccines available”. "The deep divide between the rich and the poor is proving as deadly as the virus" says Gabriela Bucher of Oxfam International, with a disproportionate impact on women who make up nearly 70% of the global health workforce.
Equally worrying, 60% of global employees work without any contract according to the ILO, and economists forecast that because of the pandemic, salary disparities will grow significantly, with 500 million people at risk of joining the ranks of those earning less than 5.5 dollars a day by 2030. Especially since it will take till the end of 2021 for world GDP to return to its pre-pandemic level, noting that in the Middle East, Latin America, Africa and even Asia, 10% of the population plucks more than 50% of the national income. Ironically, billionaires recovered from the economic shock of the pandemic in 9 months, and China is rallying its economy with a bang: the country will account for more than a third of global economic growth in 2021 according to the OECD.
The erosion of social cohesion is therefore identified as one of the ten immediate global risks by the World Economic Forum, without forgetting the warning from Mark Carney, the United Nations envoy for climate action: “We cannot isolate ourselves from climate change; in terms of mortality, it will be the equivalent of a pandemic every year as of the middle of the century. "
Inequality therefore serves as a backdrop for the moral imperative of sustainable finance, which is becoming an industry standard in Europe and Switzerland, with new disclosure requirements for climate-related financial risks. And despite the disconcerting passivity of the Swiss National Bank, the country's financial industry already invests a third of its assets in a sustainable manner according to Swiss Sustainable Finance.
Swiss Leadership in Impact Investing
Swiss financial institutions control 35% of the assets invested in impact funds globally according to Symbiotics. The industry is on the rise with a growth of 17% per year since 2016, with more than USD 700 billion invested today. The NGO ImpactAssets has just published today its 10th annual selection of 50 impact funds, and notes that 13 impact managers have now crossed the billion-dollar milestone of assets under management – an opportunity not to be missed for Switzerland.
* A chronicle of the Building Bridges Community prepared with the support of Sustainable Finance Geneva and the AlphaMundi Group. Written this month by Tim Radjy, Managing Partner of AlphaMundi Group.