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The financial system can play a major role in contributing to a transition towards a low-carbon, resilient and inclusive economy. However, for this to happen, three key deficiencies must be addressed: the misallocation of available capital for long-term development; externalities and systemic risk, including climate change; and environmental stress, notably natural disasters. Critical to aligning financial and capital markets will be measures within the financial system to green private finance through adjustments to key policies, regulations, standards and norms, and through market innovations.
In 2018, the Global Environment Facility (GEF) launched the GEF Aligning Finance Policies project to build international consensus to align financial systems with the UN Sustainable Development Goals (SDGs) and develop national regulatory actions. The project focuses on the development of national Sustainable Finance Roadmaps in six countries – China, India, Kazakhstan, Mexico, Mongolia and Nigeria – and building international consensus on best practices – from policies and regulations to standards and norms – to green the financial system.
This Green Forum discussion is for professionals to share their knowledge and experience on sustainable finance, particularly best practices to help align the financial system with sustainable development and climate change mitigation needs, as well as ways to incorporate sustainability factors into the rules that govern banking, insurance, institutional investment and capital markets.
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Created a Post in Natural Capital, Sustainable Finance
Biodiversity loss and financial stability
Healthy ecosystems provide "ecosystem services" (material and water supply, climate regulation, pollination, etc.) on which economic activities depend. Their alteration could disrupt economic activities with potential consequences for financial stability. For this reason, central banks and supervisors are taking an increasing interest in the financial risks associated with biodiversity loss (physical risk) as well as those potentially generated by the incompatibility of business strategies and models with economic and regulatory changes aimed at protecting biodiversity (transition risk). This post presents an initial analysis of the French financial system's exposure to these risks.
Created a Post in Sustainable Finance
Dear Colleagues, I am Ramon Spanchis and I am very interested in the forum and the site in general, so here I am. I want to learn a lot and I remain at your service. Thanks and greetings! RS
Created a Post in Climate Change, Energy, Sustainable Finance
Pension Funds & Climate Risk
Nest, the £20bn UK government-backed workplace pension scheme, has sold its holdings in ExxonMobil and four other energy companies after criticising their progress on managing climate change risks.
Frustration over the response of some fossil fuel companies to the threat of catastrophic global warming is driving a small but growing number of influential pension funds to divest from businesses that are perceived as blocking progress towards a lower carbon economy.
“At Nest we aim to work with companies to encourage sustainable business decisions but will draw the line somewhere. The five companies being excluded have not done enough to convince us that we should remain shareholders".
The ESG mirage
"Beneath an opaque system that investors believe is built to make a better world is one that instead sanctifies and rewards the most rudimentary business practices."
Created a Post in Sustainable Finance, Climate Change
Green Finance Platform 2021: Accelerating climate alignment through sustainable financial measures
With green finance taking centre stage at COP26, the Green Finance Platform is better positioned than ever to help align global financial systems with the Paris Agreement and Agenda 2030.
Our 2021 achievements: ▶️ Updated figures for the Green Finance Measures Database ▶️ Launch of the Sustainable Finance Policy Effectiveness Working Group ▶️ Support for the GEF Aligning Finance Policies project ▶️ New Knowledge Partners and continued knowledge management
? http://ggkp.org/ZbE
Sovereign Wealth Funds Dramatically Step Up Their Focus on ESG
Some of the world’s most influential investors have turned a corner in sustainable finance, survey shows.
Are green finance regulations keeping up with climate change?
Yesterday, the EU Council cleared the EU Taxonomy Climate Delegated Act. This legislation set criteria for Climate Change Mitigation and Adaptation objectives in 60+ economic sectors.
Governments worldwide are sending strong signals to the market favoring a more prescriptive approach to green finance regulations.
Taxonomies and regulations like these are part of a shift towards "market-shaping" green finance regulation.
The Green Finance Measures Database maps 680+ policies in 100 countries.
#GFMD ? ggkp.org/GFMD
Created a Post in Climate Change, Green Recovery from COVID-19, Sustainable Finance
How is green finance integrated in governments' regulatory landscape?
The Green Finance Measures Database – supported by the Global Environment Facility – is a critical tool to monitor jurisdictions’ leadership in defining market standards for climate neutrality and allow them to benchmark their green finance regulatory landscape against peers.
"With global CO2 emissions still rising, governments must shift the allocation of capital towards their #ClimatePledges"
The political dynamics underpinning a more coordinated approach to green finance measures – in response to the insufficiencies and inadequacies of market-driven solutions to green the financial system – are an important caveat. As climate-related radical uncertainty intersects with non-reversible climate tipping points, regulators and supervisors need to move beyond quantitative analyses that have characterized risk-based approaches to financial measures over the past 6 years.
Where financial regulators currently stand on addressing climate change?
An increasing number of green finance measures are being adopted around the world by policymakers and regulators in a shift toward green finance policy and regulation that goes beyond market-driven solutions.
In addition, 2021 saw a surge in green finance regulations, with 124 measures implemented globally. This reflects the awareness of governments that the financial system will need to be aligned with their net-zero commitments announced during the year. The growing number of green finance measures has been driven by renewed international cooperation, steered by the re-establishment of the G20 Sustainable Finance Study Group and the updated climate pledges announced in the lead-up to the COP26 UN Climate Change Conference in Glasgow in November 2021.