In January 2020, the then Mastercard chief govt Ajay Banga wrote a company call-to-arms on the cost firm’s web site. “I don’t suppose you want me to inform you why motion on local weather change is required,” he started. “Hectares of forests are on hearth at any given time. Trillions of tons of glacial ice are melting. Temperatures are rising.”
Three years later, this pressing rhetoric is being scrutinised by bemused World Financial institution officers as they attempt to grasp who the person quickly to turn into the establishment’s president is, and what he stands for.
If backed by different shareholders nations, Banga, the brand new US nominee, faces the gargantuan activity of revamping the financial institution’s mission towards a backdrop of divided international locations and clunky, uncooperative paperwork. The multilateral lender, established following the 1944 Bretton Woods settlement, has confronted sustained criticism from smaller, much less rich nations searching for assist in paying for the ravages of local weather change.
Wealthier international locations have lately pushed the bank to supply extra concessional finance for local weather initiatives, have interaction in stronger mobilisation of personal finance and push by way of reforms to liberate extra of its current money. The sudden exit of Trump-appointed David Malpass has offered a gap for the US — which usually chooses the financial institution’s chief — to put in somebody new.
However Banga, 63, who was born in India and is cherished by Wall Road, shouldn’t be who improvement financiers and others had in thoughts when weighing up who might speed up the financial institution’s metamorphosis right into a improvement lender with a inexperienced hue. “They’ve landed any individual no one has ever heard of in our world,” says one improvement official.
Banga, a naturalised US citizen who declares himself a ‘Made in India man’, studied economics at Delhi College earlier than working for Nestlé after which launching quick meals franchises, together with Pizza Hut and KFC, as India’s economic system liberalised. In 1996, he joined Citigroup, finally turning into chief govt of its Asia-Pacific enterprise, earlier than becoming a member of Mastercard in 2009. He grew to become CEO a yr later.
The son of a military officer, Banga previously told the FT that transferring round regularly as a baby introduced advantages afterward. “I make pals simply. I regulate simply to new conditions. I used to be all the time the brand new child on the block, so I needed to be taught to interrupt into established teams.”
Extensively favored, he’s described by these accustomed to him as humble and approachable, a great listener and somebody with a private contact. A music fan, his tastes vary from Sikh radio and jazz to Elvis Presley and Girl Gaga. “As an individual, he can have a dialog with anybody” says Rick Haythornthwaite, who was chair of Mastercard when he was CEO.
Banga additionally presided over monetary success. Throughout his tenure at Mastercard he tripled revenues, elevated web revenue sixfold and grew market capitalisation from below $30bn to greater than $300bn. “Ajay has an unbelievable report at Mastercard,” says Ken Moelis of Moelis & Firm. “He is likely one of the most revered figures in finance.”
Lately, Banga has served as chair of the funding holding firm Exor, which owns a controlling stake in Juventus soccer membership, and as an impartial director at Temasek, Singapore’s state-owned funding fund. He additionally served as vice-chair of Normal Atlantic, a US non-public fairness group, and suggested its climate-focused fund.
In 2020, he launched Mastercard’s pledge to plant 100mn bushes. “We see it as a platform to unite company sustainability efforts and make significant investments to protect the surroundings,” he wrote. On the web site, he boasted of its “green-certified workplaces” and efforts to achieve a “zero-waste footprint”.
However these efforts elevate eyebrows within the improvement world. “Reducing single-use plastics within the workplace cafeteria is nicely and good, however delivering and implementing local weather investments within the growing world is an entire different ballgame — and I’m unsure he has that have,” says one other improvement official. “This isn’t in any respect what I used to be anticipating. The US administration has been messaging this might be a local weather individual”.
Efficiently overhauling the Financial institution’s method to local weather will imply taking up among the thornier measures proposed by a G20 panel final yr, and grappling with the extremely technical means of how the lender measures its monetary threat. Banga’s backers hope his company expertise, which incorporates work on microfinance and monetary inclusion, shall be an asset right here — and relating to attracting more cash from the non-public sector.
Based on Rachel Kyte, dean of the Fletcher College at Tufts College, Banga’s earlier work with governments ought to assist him choose up the multilateral baton. “It’s an impressed alternative,” she says. “He’s a confirmed change administration chief.”
That is wanted on the financial institution, which Janet Yellen has urged to have interaction in “stronger” mobilisation of personal finance. Some shareholders need the reform effort to incorporate new targets linked to how a lot non-public capital the financial institution leverages, moderately than how a lot cash it lends.
Nominations shut on the finish of March and, assuming there are not any surprises, Banga will begin in Could. In the meantime, financial institution watchers and the local weather world will proceed to parse his previous for clues. He could also be “a bit weak on the local weather and improvement credentials”, says Claire Healy, director of the local weather consultancy E3G in Washington. However he additionally appears “like a GSD man — will get stuff executed. And we want that now greater than ever.”
James Fontanella-Khan and Antoine Gara contributed reporting
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