Experts have called for lawmakers to mandate a “test and trace system” for global trade to ensure countries can meet their net zero targets.
“One of the key areas where we need better transparency is in finance,” said Niki Mardas Executive Director of environmental non-profit Global Canopy, speaking at The Telegraph’s Technology Intelligence Live event.
He added the world’s largest investment banks have provided £2trn of financing to sectors that have helped drive mass extinctions and biodiversity loss, referencing a report by environmental collective Portfolio Earth.
“We’ve got to stop the vast sums that are contributing to climate change and the destruction of nature,” he said.
“We’re financing ourselves into extinction.”
On Monday, Chancellor Rishi Sunak announced that companies will need to disclose their exposure to climate risks within the next five years, making Britain the first country to make such disclosures mandatory.
Mardas referred to the announcement as fantastic news, even if the target of 2025 was “a little late”.
“They’re doing the right thing. The UK is the first country in the G20 to do this.” But, he said, disclosure alone is not the answer.
“We need a type of innovation that takes a top down view, we need a test and trace for global trade,” he said, adding this could be done using AI to mine big data and reach conclusions about environmental performance.
Mardas said Global Canopy’s new “Trase Finance” tool, launched in October in partnership with the Stockholm Environment Institute and fintech startup Neural Alpha, has proven it is possible to map how financial institutions are directly or indirectly exposed to deforestation risks.
The idea is to help investors identify risk hotspots in their portfolios.
“For Trase, we’ve brought together millions of shipping records, trade contracts, millions of customers records, and reverse engineered a picture of global trade which allows us to start seeing where the hotspots are and take action.”
Gavin Starks, founder of non-profit Icebreaker One, who was also speaking on the panel, agreed that without a better system to share data, decision makers are “flying blind”, unable to determine what solutions are actually helping achieve net zero.
“We can’t really manifest really material change unless we’ve got the evidence to back it up,” he said.