Asset Pools : Banking
- Extend risk-based governance: A number of regulators have introduced requirements for banks to take environmental and social factors into account risk management and due diligence. A second stage would be to develop sustainability stress tests.
- Improve access to sustainable lending: A range of instruments can be deployed, including priority lending requirements, below-market rate finance via interest-rate subsidies and central bank refinancing operations and variations in capital requirements for certain classes of lending.
- Align banking culture and structure: This cluster takes policy making beyond adjustments to risks and returns to look at underlying skills, values and market composition the sector.
The paper focuses on the role of banking diversity on access to finance for SMEs in the green economy. It demonstrates the relationship between the green economy and SMEs, and argues that access to finance is not just a function of broader macroeconomic factors but also the structure of the banking system. Specifically, it demonstrates
An India Advisory Council of the UNEP India Inquiry was convened by the Federation of Indian Chambers of Commerce and Industry (FICCI). This report highlights key proposals emerging from their discussions for aligning the Indian financial system with sustainability. In the Indian context, they call for development of a more robust and resilient ‘sustainability-oriented market framework’ focused
An efficient and resilient regulatory regime must not only deal competently with the financial system that exists currently; it must also have adaptive capacity to deal competently with the system that is emerging. This working paper examines disruptive innovations and their implications for the design of a green and inclusive financial system. It identifes five trends relevant
A variety of interventions can be used to develop national financial systems and provide local access to affordable, long-term finance. This paper considers four key categories of actions: voluntary action; priority sector lending; regulatory or financial incentives as well as direct lending by policy-driven financial institutions. It particularly focuses on the role of policy-driven institutions such
This is the 3rd Update Report of the UNEP Inquiry, it is focused on the challenge of financing the low-carbon transition. It explores how innovative ideas and practices can be made more effective, adopted more widely, and taken to scale—and as a result move the trillions that are required. Scaling-up proven but limited innovations, is a common
This working paper presents an overview of Lender Environmental Liability (LEL) and Investor Environmental Liability (IEL) regimes and issues. Environmental harm and degradation is often irreparable. Therefore, our assumption is that precaution is the main objective of any international and domestic environmental legal regime. The paper explores the conditions under which LEL/IEL can be effective
Placing Indonesia’s economy onto a green and sustainable development pathway, as envisaged in the National Long Term Development Plan, will require a large mobilization of investment. Estimates of the annual investment needed are in the order of US$300‐530 billion, with a large portion of this investment needed in critical infrastructure, as well as environmentally sensitive
This paper provides an outline of South Africa’s financial sector, the environmental and social issues it faces, the response of government and financial regulators and the extent to which has resulted in measurable sustainable investment flows. In South Africa environmental, social and governance (ESG) considerations appear on the agenda of strategic discussions and are part of the
Climate change creates two types of potential risks for financial institutions: Physical changes – both through gradual change and extreme weather events which are likely to alter the supply and demand dynamic of many industries and lead to physical damages to assets. The transition to a low carbon economy will alter the financial viability of a part of
This paper takes stock of G20 experience with green banking, focusing on market practice. It assesses the evolving green banking agenda, focusing on mainstreaming and mobilization, drivers of progress, and key barriers. It concludes with a set of options for consideration by the G20. This input paper has been prepared by the authors as a