About this Discussion

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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Sustainable Finance

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Ryan Maia

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How do we make the global financial system compatible with a net zero economy?

Green finance measures have increased since the Paris Agreement - and so have global CO2 emissions.

▶️ In 2021, 124 green finance measures were implemented globally. Policymakers and regulators are spearheading a shift toward green finance regulation that goes beyond market-driven solutions.
▶️ This year's surge in green finance measures reflects government awareness that financial regulations must be aligned with net-zero commitments announced during the year.

The Green Finance Measures Database is a critical tool to monitor jurisdictions’ leadership in defining market standards for climate neutrality. Visit the GFMD 2021 Figures and explore the database.
#GFMD ?ggkp.org/GFMD

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https://www.greenfinanceplatform.org/news/new-era-government-intervention-green-finance-measures

EU taxonomy rules will be on the agenda of a meeting of EU member states in early December, with the European Commission having come under intense pressure to include natural gas and nuclear energy. Ahead of that meeting, professor Andreas Hoepner, a member of the Commission’s sustainable finance advisory body in a personal capacity, expresses his view about how the EU can avoid becoming a climate laggard.

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https://www.ipe.com/viewpoint-eu-must-not-become-climate-laggard-over-taxonomy/10056663.article

Nobel-winning stock market theory used to help save coral reefs

Portfolio selection rules on evaluating risk used to pick 50 reefs as ‘arks’ best able to survive climate crisis and revive coral elsewhere

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https://www.theguardian.com/environment/2021/nov/28/stock-markets-modern-portfolio-theory-mpt-used-t...

OPINION: Carbon markets are booming. Here’s how to ensure they work

As companies and governments move toward net-zero emissions goals, demand for offsets will soar - but they need integrity to work

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https://news.trust.org/item/20211129150250-092uv/

Wall Street’s $22 Trillion Carbon Time Bomb

It’s not just the moral imperative of dumping fossil-fuel producers anymore. Now it’s a matter of financial health.

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https://www.bloomberg.com/news/articles/2021-11-24/wall-street-faces-a-22-trillion-carbon-time-bomb-...

GFLP International Conference: Financing Net Zero and Nature Positive Future

From 16 to 17 December 2021, the Global Green Finance Leadership Program (GFLP) is hosting GFLP International Conference: Financing Net Zero and Nature Positive Future, co-hosted by Beijing Institute of Finance and Sustainability and UK PACT.

This two-day conference is intended to invite experts to exchange ideas and discuss topics on Role of Green and Sustainable Finance, Climate Disclosure and Other Approaches in Climate and Nature-Related Risk Management, Financial Product Innovation for Sustainability, and Carbon Accounting for Financial Institutions.

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https://www.greenfinanceplatform.org/event/gflp-international-conference-financing-net-zero-and-natu...

The right capital in the right place at the right time can take climate impact beyond ‘net zero’

"In many markets, it doesn’t take much to tip the balance towards net zero. Small shifts can have big ripple effects, spurring a country to turn decisively away from current high-carbon energy."

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https://impactalpha.com/the-right-capital-in-the-right-place-at-the-right-time-can-take-climate-impa...

Almost half of all energy-related CO2 emissions in G20 economies are now covered by a carbon price, as several countries introduced or extended carbon taxes or emissions trading systems in the last few years.

More needs to be done using the full range of policy tools, if countries are to match their long-term climate ambitions with outcomes, according to a new OECD report.

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https://www.oecd.org/newsroom/g20-economies-are-pricing-more-carbon-emissions-but-stronger-globally-...

The multilateral development banks (MDBs), including the European Bank for Reconstruction and Development (EBRD), have agreed to step up their efforts towards the protection, restoration and sustainable use of nature.

In a joint statement signed at the COP26 Climate Conference in Glasgow, the institutions state that “progress on global sustainable development, climate and biodiversity goals cannot be achieved without addressing the direct and indirect drivers of nature loss and transforming the way in which we value, use, conserve and share the benefits from nature”.

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https://www.ebrd.com/news/2021/multilateral-development-banks-to-step-up-protection-of-nature.html

EBRD Supports Small Businesses in West Bank and Gaza

The European Bank for Reconstruction and Development (EBRD) is boosting micro, small and medium-sized enterprises (MSMEs) in the West Bank and Gaza with a US$3 million SME credit line to Vitas Plaestine, a microfinance institution.

MSMEs in the West Bank and Gaza represent a substantial segment of the economy and supporting their access to finance is now more important than ever, particularly to mitigate the economic impact of Covid-19.

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https://www.ebrd.com/news/2021/ebrd-supports-small-businesses-in-west-bank-and-gaza-.html