Could finance save the environment? In conversation with economist Nathalie Hilmi

Nathalie Hilmi Monaco Scientific Centre
Nathalie Hilmi

How can we protect nature? According to Nathalie Hilmi, the solution lies in finance. We met with this researcher, a specialist in environmental economics and member of the Scientific Centre of Monaco (CSM), who, since 2016, has also been part of the Intergovernmental Panel on Climate Change (IPCC).

1. Could finance become sustainable?

The world of finance is finally taking an interest in protecting the environment and the oceans! In an effort to become more sustainable, the finance industry is focusing on making financial investments more ethical as well as considering their economic performance in terms of positive environmental impacts. Sustainable blue finance is specifically applied to the ocean economy. It is essential now that the financial sector prioritises investments in those industries that are making a real effort to protect the environment, even if that means sometimes compromising on profits.

The sustainability of our economic system relies heavily on the sustainability of our ecosystems.

As an example, the social enterprise Blue finance invests in protected marine areas in order to preserve coral reefs. By doing this, they help vulnerable local communities who are paid for their work to protect the environment. I’m very down-to-earth: finance governs the world. As such, it’s so important that this sector becomes aware of the fact that the sustainability of our economic system relies heavily on the sustainability of our ecosystems.

The Mediterranean remains the most visited destination by tourists and it is currently facing serious threats caused by climate change, particularly the erosion of beaches, rising temperatures and sea levels. Over the last twenty years, the Mediterranean sea level has risen, on average, by 6cm and now increases by 2.88cm each year. The problem is accelerating. We will not meet the objectives set out by the Paris agreement, if we carry on the way we are going. If we don’t reduce our CO2 emissions, we will no doubt suffer economic losses.

>> READ ALSO: Climate change: “future of the Mediterranean at a tipping point,” says new report

2. Can we put a price on nature?

In our market system, nature is viewed as free and plentiful. Whilst it is considered precious, it still costs nothing, so it is thus not surprising that nature is being lost due to human activities, which focus on the extraction and destruction of natural resources for profit. Our financial systems have not taken into consideration the value of nature for our own well-being. It is important to put a price on it and to calculate a value based on the service it provides to humanity. Similar to a salary: when you receive it, it doesn’t reflect your worth, but rather the service you have provided to your employer.

In my opinion, people are already thinking differently!

>> READ ALSO: Monaco launches new initiative to capitalise on sustainable finance

3. Have you noticed a change in mindsets, particularly in the financial sphere?

I’m naturally a very optimistic person: in my opinion, people are already thinking differently! I’ve noticed that the younger generation are becoming more and more sensitive to the protection of the environment and its biodiversity. For them, the environment has largely been a given. Will finance remain focused on profit? Even though there are still some sharks in the industry, I do think that many professionals in the sector are starting to think differently.