London’s Lord Mayor on Latin America
Climate change presents an unprecedented challenge for us all – politicians, businesses and individuals alike.
It is estimated that some $90trillion will be needed globally by 2030 to achieve international sustainable development and climate objectives. While this is, without a doubt, a daunting task, it also presents a significant opportunity to which the UK’s financial and professional services sector is rising. Firms in the City of London are playing a vital role in sharing their expertise and experience across the globe in fast-growing areas such as green finance.
I was keen to share that message when I recently visited Colombia and Brazil. These are two of our planet’s most biodiverse countries, as well as two of Latin America’s largest economies, and both have new administrations with bold plans.
On my visit, other points of discussion included fintech, asset management and infrastructure financing – all areas in which London is a true global leader. More than a tenth of the global fintech industry is based in the UK, and London is the largest asset management hub in Europe, with £9trillion assets under management, more than our three nearest competitors combined. Meanwhile, the strength and depth of our expertise in infrastructure finance is unparalleled. The London Stock Exchange, for example, hosts more than 480 infrastructure-related companies, operating in more than 65 countries.
On a hugely productive visit to Bogota, I had the opportunity once again to meet President Ivan Duque, whom I had the pleasure of meeting at Davos earlier this year. President Duque’s vision for transforming Colombia’s economy is an impressive one, looking towards the so-called “orange economy” – the creative industries – and its connections with fintech and innovation. We discussed how London can play a major role in supporting his plans, looked towards opportunities for Colombian fintechs to scale-up in the UK, and considered how UK fintech companies can support the development of personal finance in Colombia. Indeed, two such companies – World Remit and Transferwise – have already expanded into the country.
President Duque, having made green infrastructure investment a priority for his administration, has also called London an ally in the fight against climate change. I am pleased to say that I had productive discussions with representatives of both the Colombian Ministry of Finance and Ministry of Environment about how London can offer its support to develop investment into a pipeline of Colombian infrastructure projects. It was a great pleasure, in mid-June, to reciprocate by hosting a senior Colombian delegation, which included President Duque, at the Colombia Inside Out Roadshow.
Fintech, infrastructure and green finance were also key themes when I subsequently moved on to Sao Paulo.
Several Brazilian banks already have a presence in the City of London. In meetings with them all, we discussed how we can support their growth. In regard to fintech for example, there is interest – as there is across Latin America – in how London can help the 55 million people in Brazil who do not have a bank account. There is a great potential for progress: Brazil has more fintech start-ups than any other country in South America, and more smartphone and internet penetration than anywhere else on the continent.
My discussions with those banks in Sao Paolo allowed me to gain an insight into President Bolsonaro’s emerging privatisation agenda. The City of London is well-placed to support this, especially in terms of infrastructure.
As in Colombia, there is a huge appetite in Sao Paolo for London’s expertise in green finance. I spoke at a Sustainable Finance Conference organised by the British Embassy. Together, the UK and Brazil have already achieved significant progress in green finance: the UK-Brazil green finance partnership, for example, has enabled collaboration between the City of London’s Green Finance Initiative and Brazil’s own Green Finance Initiative. By working together and fostering collaboration between private sector actors in green finance sectors, both the UK and Brazil will deliver policy recommendations to governments at future Economic and Finance Dialogues. With UK Export Finance also having a local presence in Sao Paulo, I am confident that the UK is strategically well-positioned to provide competitive and innovative financing to Brazilian companies who are considering doing business with us.
London and Latin America
What I saw and discussed in both Colombia and Brazil is typical of other countries in the region. There is real appetite to work with the UK to drive the development of the green finance sector. At the end of 2018, for example, I visited Mexico to launch an agreement between our Green Finance Initiative and the country’s counterpart organisation, the Consejo Consultivo de Finanza Verdes (CCFV).
Partnerships such as these demonstrate how London, as a leading global financial hub, can help Colombia, Brazil, and other emerging nations around the world to realise their economic ambitions. These partnerships can create prosperity and bring millions out of poverty, without such gains coming at the expense of the environment. This challenge transcends borders and is one which we all need to confront as part of a highly interconnected global ecosystem.
As ever, London’s spirit of innovation means that it is uniquely placed to partner with such nations to deliver that legacy. London is at the forefront of the growing green finance sector, as demonstrated our position as the world’s largest issuer of green bonds. We will be showcasing our green finance offer at the third Green Finance Summit, to be held in the City of London’s Guildhall on 2 July.
Our leadership in developing the green finance sector, alongside the liquidity and depth of experience that we have in infrastructure finance, put London in a unique position to assist Colombian, Brazilian and similar economies, fostering sustainable growth and prosperity.
Together, we can build a global economy in which infrastructure finance, and indeed all finance, is green by default.