With the new decade starting off with a worldwide pandemic and continuing with the return of war in Europe thanks to Russia’s invasion of Ukraine, Simon Tribelhorn, CEO at Liechtenstein Bankers Association (LBA), discusses how the resilience and reliability of his country’s banking sector aims to be at the forefront of solving the social and ecological challenges of our time.
Aworldwide raging pandemic and Putin’s brutal war of aggression in Ukraine – the twenties of this century really did not begin auspiciously. The German president’s notion of an epochal turning point hits the mark. The war and the desperate search for alternatives to fossil fuels from Russia somewhat pushed ongoing climate change – probably the greatest and most significant long-term challenge of our time – out of the headlines. As an aid to memory, here are just a few headlines from recent years: droughts and wildfires in Australia; deforestation of the rainforest in Brazil; and floods in Europe or melting glaciers in the Alps.
Resilient business models and transformation
In these extremely difficult circumstances, the resilient business models of the banks in Liechtenstein have proven themselves. They can be described with the traditional values of stability, quality and reliability. This tradition or “thinking in generations” stands for a sustainable business model that places the client at the centre of thinking and acting.
Sustainability is also an important pillar of Roadmap 2025, the growth strategy of the Liechtenstein banking centre. The banking centre should play a decisive and formative role in the transformation of the global economy and society towards more sustainability. We do this in the knowledge that our demanding clientele expects more than just high-quality services – they want financial institutions to contribute to solving the ecological and social challenges of our time.
SDGs as an opportunity
In 2021, the sustainability issue also gained further political momentum. With the “traffic light” coalition in Germany, the decarbonisation of the economy and society was set as a binding goal for the first time for a large industrialised country. Climate protection in particular and the Sustainable Development Goals (SDGs) have thus virtually become the reason of state or the political orientation framework.
This fundamental transformation will require immense sums of money over the next few years. At the global level, it is estimated that the annual investment volume to achieve the SDGs amounts to approximately $7trn. Currently, only one seventh of this is covered by the public sector. A substantial part must come from the private sector. And here, Liechtenstein banks in particular can play an important role as intermediaries and mobilise and channel the required capital. Probably the most credible commitment of the banking industry to this transformation is the Net-Zero Banking Alliance (NZBA). In the meantime, more than 100 banks from over 40 countries with total assets of $40trn – including all three large Liechtenstein banks – have joined forces in this alliance, committed themselves to net zero and giving a clear roadmap on the way there.
Time to walk the talk
The investments mentioned above are accompanied by equally large business opportunities. For example, the latest Better Business, Better World report estimates that sustainable and inclusive business models could unlock economic business opportunities worth at least $12trn per year by 2030 and create up to 380 million jobs worldwide.
Perseverance, communication and solidarity are terms often heard in the West in connection with the war in Ukraine and the sanctions against Russia. But they are also prerequisites for a successful fight against climate change. Firstly, all measures must be designed in such a way that they are long-term and can be sustained over a long period of time. Secondly, good, truthful and transparent communication is needed. Because only those who recognise the sense of measures will also implement them and go the whole distance. And, thirdly, it needs a world community bound by solidarity, in which every country and every person makes their contribution.