Policy Lever: Transforming Culture
ExamplesKey steps that could be taken to integrate sustainability into the culture of the financial sector include:
- Consumer education: Extending financial literacy programmes to include sustainability.
- Professional education: Building the skills and capabilities to assess sustainability risks and issues among financial professionals.
- Regulator capacity building: Improving the sustainability capabilities of financial regulators and policymakers.
- Remuneration regulation: Including sustainability in remuneration regulations – so that individual compensation relates to performance in terms of long-term sustainability.
- Codes of conduct: Incorporating environmental and sustainability in policies to promote integrity in financial markets and the upholding of core values.
- Non-financial guidance: Encouraging financial institutions to respect global standards of responsible conduct (such as Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises
- Value-based financial institutions: Ensuring a level-playing field for values-based financial institutions (including cooperatives, impact investment etc.)
- Market diversity: Promoting diversity of financial institutions in terms of size, geographical focus, ownership and business model.
- Right sizing financial institutions: Taking action to “right size” financial institutions to deliver sustainability outcomes (e.g. consolidation and unbundling).
ImpactsTo date most reforms focused on the culture of the financial sector have not explicitly focused on sustainability, but there is potential for wide application. A robust financial culture focused on the needs of the real economy is a criticalprecondition for other efforts to align the financial system with sustainable development.
The Green Finance Taskforce was convened in 2014 by the People’s Bank of China and the UNEP Inquiry. The Taskforce brought together leading Chinese experts on financial markets, policy and regulation from government, academia and from the private sector together with international experts and practitioners. One of the inputs to the deliberations of the Taskforce