Achieving planetary health is about drastically changing economies, industries and consumption patterns globally in order to reduce their impact on the environment and human health. This means a radical shift to healthier and more environmentally friendly production processes and behaviours, and the need to create technologies and infrastructure to replace existing ones. Making this shift comes at a cost, but should be seen as an investment for the future, both as protective and preventive action against threats to planetary health.

Here are seven propositions to reshape the financial system in favour of planetary health, building on ongoing discussions involving financial regulators and financial institutions. The EU Action Plan on Sustainable Finance already offers a good opportunity to put planetary health topics on the agenda of mainstream policy-makers. While this EU framework is currently focused on climate mitigation, it could serve to open the way for addressing broader sustainability issues, including planetary health.

1. Systemic risk and prudential regulation
The stability of the financial system can be affected by planetary health issues and consequent financial risks, and reciprocally planetary health may suffer from biases in prudential regulation, typically favouring short-term and low-risk investments where long-term and risky investments would be appropriate. Therefore, prudential regulation should be enhanced following a precautionary approach to be able to cope with the forthcoming unprecedented and swingeing risks, and to help finance become a net contributor to planetary health. Penalizing factors can be put in place to account for the detrimental effect and long-term risk carried by some economic activities that we want to avoid. Other prudential tools that may be employed include countercyclical and systemic risk capital buffers, lender/borrower constraints on credit allocation, or credit guidance and requirements to hold certain shares of assets, depending on their positive/adverse contribution to planetary health. More generally speaking, clarification of which economic activities are harmful/necessary for planetary health would allow the appropriate use of prudential tools and other regulatory measures, based on such distinctions.

2. Classification of sustainable economic activities
The European Commission is working on a taxonomy of sustainable economic activities, which is to serve as a backbone for all financial tools and criteria that present themselves as “sustainable”. The development of such a classification system started in 2018 with climate mitigation, and is to be extended to climate adaptation and broader sustainability issues, including pollution prevention and control, and protection of healthy ecosystems. This initiative strongly resonates with the planetary health approach. An alternative approach would be to develop a negative taxonomy, which would certainly be easier and more effective to implement, highlighting those activities and technologies that are not sustainable under certain conditions. Such an approach has not yet been developed at the institutional level, but has been recently proposed by central banks and financial supervisors. Classification of economic activities that are either compatible or incompatible with planetary health could be created and maintained by core administrations attached to governments – potentially emerging from a UN body – and be associated with policies and regulations applied to the financial system.

3. Labelling, indices and funds, and fiscal policy
Identifying what is green/brown or aiding/damaging planetary health makes the investor’s job easier, especially for individuals, in managing their savings. With such a characterisation – based on a taxonomy similar to the ones discussed above and targeting companies, projects and activities that really need to attract additional financing – it becomes possible to put a planetary health label on investment products. Such labelling has the power to guide investors on impactful products, and to curtail investment flows to those that do not support planetary health priorities. It can be powerful, especially on main stock indices, as they are a core benchmark for all market participants. A complementary approach to positive labelling can rely on blacklisting (i.e. negative screening) of bad activities for planetary health, which can be more intelligible for investors as well as more impactful.

4. Mandatory reporting framework
Without appropriate disclosure, investors, governments and citizens cannot know what currently transpires in the financial markets, and it is impossible to monitor and assess alignment with current climate targets or upcoming planetary health objectives. Governments need to impose more disclosure throughout the financial chain with precise guidelines and standards for financial reporting, so that end users can easily identify and compare financial institutions in order to choose where to entrust their money. Making such disclosures mandatory will not necessarily drive an instantaneous change within corporations, but it will give external stakeholders, including governments, the capacity to engage with companies and stimulate them to change. Achieving efficient disclosure and reporting is with the indispensable deep reform of current accounting principles, which fall short of integrating planetary health considerations or any non-purely-financial items. Accounting is the primary tool that defines a company’s value and its main rules governing activities and management. But without such normative planetary health accounting rules, most economic decisions will never effectively address planetary health.

5. Fiduciary duty
A core concept of financial management is the notion of fiduciary duty to the client. Managing other people’s money comes with responsibilities, which could include investment managers actively financing planetary health as a target in order to avoid long-term threats that could affect the client’s financial interest. Similarly, it would be a breach of fiduciary duty to invest in “bad” assets (e.g. generating pollution), if the general market consensus is to start avoiding them. Integrating planetary health in fiduciary duty would represent a great power of change, enabling a massive shift of money flows. This could be a part of respective regulations defining fiduciary duties in each jurisdiction. More broadly, such approaches should be extended to all bodies and rules of the financial system, aiming for enhanced accountability of financial market participants and intermediaries (stock exchanges, rating agencies, etc.).

6. Shareholder engagement
As shareholders, investors have significant powers to orient companies’ strategic choices and to impel them on planetary health pathways, even against the wishes of the company management. Compared to measures that tend to favour companies that are already “green”, shareholder engagement has the power to incentivize those that are not, and therefore constitutes a strong tool for change. Institutional investors are not passive and many are committed to achieving the SDGs. Thus, they can be committed to planetary health, or on behalf of their clients, and vote as active shareholders to push investee companies to shift their activities to more sustainable pathways.

7. Monetary policy
Central banks play a significant role in ensuring economic stability. While many central bankers argue that their role in directing money is to be “neutral”, that is not always the case. For example, the European Central Bank tends to favour today’s main industries, which are highly carbon-intensive and falls short of directing investments in line with European climate policy goals. It is interesting to see, however, that some countries actively use their central banks to make economic choices, such as China and Brazil. After a campaign of quantitative easing following the most recent financial crisis, monetary policy and money creation are now being seen as avenues with the potential to be “greened” in aspects such as QE, and others such as collateralization. Implementing such a change would require a shift in mentality among central bankers. This will not be easy but the discussion has already started.

The financial sector has an important role to play in planetary health, but it is currently constrained by a number of obstacles, with short-termism being one of the more fundamental impediments. The best contribution that finance could make to planetary health is to rethink the financial system as a whole.

By Hugues Chenet, Finance Policy Adviser, Rockefeller Foundation Economic Council on Planetary Health

Changes to earth’s systems are a growing threat to human health. These changes include worsening air pollution, which kills some 7 million people each year, and climate change, which exposed 157 million more people to heatwaves in 2017 than in 2000. Another critical change in earth’s systems is the loss of biodiversity – the variety of life on earth.

The importance of biodiversity to human health is frequently cited. For example, the recent IPBES summary for policy-makers states that “the deterioration of biodiversity and ecosystem functions, and the consequent disruption of benefits to people, has both direct and indirect implications for public health”. This statement follows decades of research exploring how natural systems contribute to human health and well-being. But does this evidence actually demonstrate that biodiversity underpins human health and if so, how important is it? Do we understand enough to promote biodiversity conservation as a public health intervention?

In our recently released report, Evidencing Links between Biodiversity and Health, we synthesised research connecting health to biodiversity using a water quality example. We found strong evidence that biodiversity sustains ecosystem processes, as well as plausible mechanisms through which biodiversity can enhance water quality. Our review also restated the importance of water quality to the health of vulnerable populations, such as the 159 million people exposed to illness through their dependence on surface water. With these points in mind, making the case that biodiversity influences health through its positive effect on water quality is conceptually straightforward.

Yet, we find few empirical estimates connecting these two bodies of research. A key question remains: what quantifiable effect does biodiversity loss have on health through water quality? What is the scale of this effect compared to other watershed factors, such as land use? Our review was limited in depth and scope and only focused on the example of water quality. Nevertheless, similar or greater levels of uncertainty are likely to exist for other proposed mechanisms connecting biodiversity and health.

If biodiversity loss is to be taken seriously as a public health and development issue, we need to provide convincing estimates of the disease burden associated with it. We also need to show how biodiversity protection can provide similar benefits compared to established public health interventions. For example, The Nature Conservancy estimates that the cost of watershed conservation (but not biodiversity protection specifically) would be offset by municipal water treatment savings in one-in-six sampled cities globally.

Part of the challenge of communicating research in this area is that the term biodiversity – diversity at a species, genetic, or functional level – is sometimes misused to mean habitat, nature or wildlife. This obscures the role of biodiversity in human health, and ultimately, how natural landscapes should be managed for health.

In some instances, we may not have empirical estimates of biodiversity-health links, but there may exist a strong conceptual case coupled with a potentially high cost of inaction. In these cases, we should explicitly recognise this uncertainty while advocating for precautionary and no-regrets approaches. Nevertheless, policy-makers would benefit from empirical evidence when deciding if biodiversity conservation is a sensible public health strategy.

Although biodiversity loss is a major global concern, if we wish to use public health benefits as an argument for conservation, we must provide the right evidence supporting this claim.

By Thomas Pienkowski, Department of Zoology, University of Oxford.

Have you ever heard of planetary health? I hadn’t before I started writing reports on the issue. The official definition is that planetary health is a multi-disciplinary approach to understand natural and human environments as one connected system.

Got it yet? No? Well, I find it tricky to explain, but the secretariat of the The Rockefeller Foundation Economic Council on Planetary Health at the Oxford Martin School are doing a great job working out what planetary health means for you and me. In the process of working this out, the team has come up with some examples of planetary health issues to help academics, decision-makers and policy-makers catch the vision for this multi-disciplinary approach.

This is where these reports come in (written with Anitha Devadason from the Bloomberg School of Public Health at Johns Hopkins University in the US). We have co-written two reports that try to navigate two complicated systems that are themselves interconnected with each other.

The first report, led by Anitha, focuses upon the impacts of climate change and associated sea-level rise on human health and livelihoods in small island states, particularly in the Pacific (where Anitha spent time working for the World Health Organisation in Fiji). The report shows that climate change is a present-day threat to key sources of government revenue, especially fishing, and that economic livelihoods in Pacific Island Countries that are at risk from limited adaptation capacity. One stark issue discussed is the currently limited rights of individuals forced to migrate due to climate change.

The second report (led by me) considers the train of events — both human and natural — that lead to risks of mental health problems caused by coastal flooding. As a climate scientist, it was fascinating to explore the research done on mental health, and the report attempts to draw this storyline into something that could be tested to see if, one, we could measure the impact of increasing coastal flooding due to sea-level rise on mental health problems over the 20th century, and two, consider how mental health problems might change in the future due to enhanced climate change.

One topical message that comes out is that rapidly cutting our carbon emissions will slow the current rate of sea-level rise, giving us a bit more time to develop ways of better protecting our coastlines (though retreat should be a genuine option on any decision-makers table if a coastline is eroding fast), which in turn will help limit flood-induced mental health problems.

This pair of reports, as with others published by the Economic Council, tackle one to two strands of this complex and interconnected world we live in, in terms of our planetary health.

By Luke Jackson, Research Fellow at Climate Econometrics, Nuffield College

This blog was also published on the Climate Econometrics website.

Paris proved a fitting backdrop for the Green Growth Knowledge Platform’s annual conference this year, which focused on social inclusion in green growth policies. Central thoroughfares of the city were blocked by ‘les gilets jaunes’ who were protesting President Emmanuel Macron’s fuel tax hikes. They are so called for the ‘yellow jackets’ which French law requires all drivers to carry.

The aim of the GGKP Annual Conference and Learning Forum was to examine how pro-environment, pro-economic growth policies can also tackle social equality and ‘Leave No-one Behind’ in the context of the UN Sustainable Development Goals. As we heard diverse evidence of green economic transitions presented over four days, from both developed and developing countries, we concluded that green growth policies will not succeed unless they explicitly address social inclusion and workers’ needs.

Social inclusion climbs the agenda

Since the GGKP’s founding in 2012, much research, policy development and advocacy effort have gone into making the case for green growth while often the aspects of equity and inclusion have appeared to be secondary.

The ‘les gilets jaunes’ offered a visible reminder this year to conference delegates that important fiscal measures to discourage pollution and nudge forward green behaviours can impose painful costs on workers and households.

As well as discussing the unfolding events in France, delegates considered how South African miners have protested against renewable energy investments, and the public has protested against the reduction of subsidies that are propping up fossil fuel consumption in Nigeria.

Macroeconomic studies support the case that a green economy can benefit workers overall. The ILO report Greening with Jobs shows that a transition to a low-carbon economy in line with the Paris climate agreement can produce 24 million new jobs against the likely loss of 6 million jobs under business as usual. However, it’s up to government leaders to prepare society for the transitions to a greener economy and to offer material compensation to those who are negatively affected.

Policies for a green economy must support workers who are negatively affected

The crux of the transition is that ‘brown’ and ‘green’ jobs require different knowledge and skills. Workers need significant support if they are to be successfully redeployed to new industries.

It is imperative for governments – and firms – to consider how workers could be displaced by the transition to a greener economy, and to look at how they can be compensated and retrained.

The Government of Poland was on the front foot by launching a Just Transition Declaration in the run-up to United Nations climate talks (COP24), which it hosted from 3-15 December 2018. The COP24 took place in the centre of Poland’s Upper Silesian coal belt, home to many of the 90,000 Polish workers who are still employed in coal mining.

“Considering the social aspect of the transition towards a low-carbon economy is crucial for gaining social approval for the changes taking place,” reads the Declaration (which to date has been signed by some 54 government representatives and world leaders). “Public policies to reduce emissions will face social resistance and significant political risks for the governments implementing them if they are not accompanied by social security programmes for workers whose jobs will be lost or transformed. For these reasons, the issue of fair transition is a vital issue for governments, social partners and civil society organisations.”

Spain is currently rolling out a policy to manage this type of transition: this year, the Government of Spain must end coal production subsidies, in order to meet European Union requirements. This development, along with lower coal prices on global markets, will put the country’s remaining 40,000 coal miners out of work. As reported in the Huffington Post, the government will plough US$285 million into compensation payments and retraining schemes for coal miners over the coming decade. Miners previously protested their economic grievances on the government’s doorstep in Madrid; the coming months will tell whether miners consider this new social safety net to be adequate to support them and their families.

Not just ‘any job’ – an agenda for ‘decent green jobs’

One of the most important aspects of adjusting to a new, green economy is creating decent jobs for workers who are displaced. Take the example of Aberdeen, Scotland, the centre of the United Kingdom’s North Sea oil and gas industry. Since the early 1970s, workers (mostly men) have been employed in lucrative jobs on offshore oil rigs. As oilfields are closed down, redeploying workers to jobs of equivalent pay and status may mean significant retraining, for example, in the nascent offshore wind power industry or other renewable energy jobs. Speakers made the point that offering oil workers low-paid work in call centres or other services sector roles would cause significant social dislocation.

“The decarbonisation process must create quality jobs,” said Montserrat Mir Roca, Confederal Secretary of the European Trade Unions Confederation. “It is an opportunity for good quality employment.” In this era of the rising gig economy where workers suffer the job insecurity of zero-hours contracts, Ms Roca’s intervention was a reminder of how green jobs fit into larger employment trends.

Meanwhile, evidence presented from the United States demonstrated that green policies can improve labour market opportunities for lower-skilled workers.

Olivier Deschenes, University of Santa Barbara, said it is a myth that green transitions hurt the least skilled workers the most. On the contrary, his analysis showed that “all education groups benefited from green labour policy [in the US] but the biggest benefiter was the lower-skilled workers. [They achieved] 15% more real wage bill growth compared to higher skilled and educated workers.”

Green jobs are part of a bigger picture

Existing and looming imbalances in many labour markets – i.e. skills shortages in some areas and surplus in others – present knotty challenges.

Already, OECD countries are ‘struggling’ to match employees with vacancies in the labour market, according to Fabio Manca, Economist at the OECD Directorate for Employment, Labour and Social Affairs. The automation of jobs (and related displacement of workers by robots) is another global macroeconomic trend, in which the green economy transition is located. Some 32% of all jobs in the OECD will stand to be substantially changed (and 14% of them made redundant) by automation. Policy-makers will need to plan the transition to the green economy and support for workers in the context of this larger labour market picture.

Green fiscal policies to discourage polluting behaviour and hasten a green economic transition are also an essential part of this wider picture.

One successful fiscal measure in the spotlight – from which other countries and regions can learn – is British Columbia’s carbon tax. First introduced in 2008, this tax “provides a signal across the economy to reduce emissions while encouraging sustainable economic activity and investment in low carbon innovation” and has not held back the province’s economic growth (real GDP growth of 17% from 2007-2017 while emissions fell almost 5%). To support greater ambition, British Columbia is now increasing the tax incrementally from $35/tonC to $50/tonC and instituting a climate action tax credit.

Of course, the above examples of worker dislocation and the search for a ‘just transition’ were all from developed countries with histories of organised labour and collective bargaining. We were interested to see how the notion of a ‘just transition’ could apply in developing countries. Several best practices and challenges emerged.

Helping workers visualise their green career path

In Indonesia, Mariski Nirwan of GGGI Indonesia described how her team, based in the National Institute of Public Administration, is trying to develop green careers advice and mid-career retraining to the country’s 4.5 million civil servants and so prepare them for a green transition before job displacement occurs. Still in its early stages, she said she hopes her nascent programme can help employees plot green career pathways to withstand the many variables that will shape their working lives.

Hard-to-reach informal sector workers

One-third of the world’s workers work in the informal sector – unregulated and unsupported – according to Steven Stone, UN Environment’s Head of Resources and Markets.

Several inspiring and innovative examples of channelling informal sector workers into the ‘circular economy’ by developing safe, green jobs were highlighted during the conference. For instance, Ella Pad, Bangladesh showcased how they are reusing textile scraps from the garment industries to make low-cost sanitary napkins. In so doing, providing a safer work environment for more than 50,000 female workers.

Also in Bangladesh, a waste management company produces fertiliser from collecting fruit and vegetable waste in Dhaka. If all the waste was collected, according to Catherine Saget of the ILO, then 1,600 jobs would be created. However, she added, an ILO survey showed that “most training programmes were focused on youth, and on particular sectors, and on skilled and semi-skilled workers. So have to think of other policies/programmes to reach adult workers and unskilled workers.”

The green learning challenge

It was encouraging to see so many processes underway to support the exchange of knowledge and experience on green economy transitions.

Building domestic capacity and skills take time. We were struck by the fact that many different kinds of support will be needed: including peer-to-peer exchange and career development, within government, within private businesses and in intermediary and support institutions such as NGOs, community-based organisations and municipalities. Establishing collaborative learning networks will be a key element.

CDKN’s nascent peer-to-peer exchange programme on climate compatible development – with new funding from the Government of the Netherlands and IDRC-Canada – will make a contribution as one of many international initiatives.

As Seth Cook of IIED said: “The green economy is vast and no single training institution can cover all of them. We need to make use of materials from all these institutions and customise them and tailor them to different situations.”

By Sam Bickersteth, Executive Director, The Rockefeller Foundation Economic Council on Planetary Health, and Mairi Dupar, Global Public Affairs Coordinator, Climate and Development Knowledge Network.

This article was first published on the Climate and Development Knowledge Network website on 18 December 2018.