4th Update Report: The Coming Financial Climate

Policy Lever: Upgrading Governance

Measures to upgrade governance support the implementation of the other levers by integrating sustainability into the overall governance of the financial system.

Examples

Key measures that could be taken include:
  • Principles: Adopting principles for a sustainable financial system to guide policymaking.
  • Policy & Legal Frameworks: Considering impacts on sustainability when developing and reviewing financial regulations, financial sector development plans, and legal frameworks.
  • Roadmaps and plans: Developing long-term national strategies and roadmaps, supported by coordination mechanisms.
  • Regulatory Mandates: Exploring the impact of sustainability factors for existing mandates of central banks and financial regulators and adjust where necessary.
  • Performance Measurement: Developing a performance framework to assess and guide progress in developing sustainable financial systems.

Impact

This is the area where there is least common current practice, but strong potential.  

Inquiry Publications

  • 4th Update Report: The Coming Financial Climate

    Date: 07-May-2015

    This is the 4th Update Report of the UNEP Inquiry, it is focused on the challenge of financing the low-carbon transition. Many approaches and instruments will be needed to deliver the financing needed. Public finance, funded by tax revenues and international transfers, will provide part of the solution.  However such finance will be inadequate. Private

  • The Financial System We Need: Aligning the Financial System with Sustainable Development

    Date: 08-Oct-2015

      Download the full report: [AR] [CH] [EN] [ES] [FR] [PT] [RU] Download the policy summary: [AR] [CH] [EN] [ES] [FR] [PT] [RU] This first edition of “The Financial System We Need” argues that there is now a historic opportunity to shape a financial system that can more effectively finance the development of an inclusive, green economy. This opportunity is based on a growing trend

  • A Review of International Financial Standards as They Relate to Sustainable Development

    Date: 22-Feb-2017

    The report, a companion to the second edition of “The Financial System We Need”, examines how the international financial standards currently relate to the goals of sustainable development and explores opportunities for better alignment as a way to promote greater stability, resilience and fairness to the financial system. The key messages are: Financial standards have

  • China Report: Monetary Policy and Green Finance

    Date: 06-Oct-2015

    Monetary policy has been largely neglected in the worldwide discussions on green finance. Similarly, most central banks have not even started thinking about their role in helping society reach its environmental objectives and about the potential implications of environmental degradation for their mandates. Bringing light to this blind spot is critical. This report aims to

  • Sustainable Infrastructure and Finance

    Date: 13-Jun-2016

    Infrastructure is often referred to as the backbone of the global economy and plays a fundamental role in societies by enhancing the quality of life and increasing productivity. In addition to its effects on society and the economy, infrastructure can have significant impacts on the environment, depending on the choice of infrastructure. Approximately 75% of

  • Financing the Future

    Date: 06-Feb-2017

    Italy’s Ministry of Environment, Land and Sea, in partnership with UN Environment, launched the National Dialogue on Sustainable Finance in February 2016 to identify practical market and policy options to mobilize Italy’s financial system for sustainable development and climate action. The conclusions of the paper are: Italy faces a strategic opportunity to harness its financial

  • Fintech and Sustainable Development – Assessing the Implications

    Date: 14-Dec-2016

    The report, a companion to the second edition of “The Financial System We Need”, assesses how the financial system’s core functions are likely to be disrupted by financial technology (“fintech”) innovations and how they could help – or hinder – efforts to align financing with sustainable development. It considers ways to: Unlock greater financial inclusion by

  • Making the Jump

    Date: 29-Feb-2016

    This paper outlines the dynamics behind the financial regulatory paradigm shift that began in 2008-2009. It seeks to identify parallels with and differences from the slower moving, even more consequential, global climate change crisis, and the fitful, still under way, policy paradigm shift that the United Nations Environment Programme (UNEP) and other stakeholders are trying

  • A Role for Finance Ministries

    Date: 20-Oct-2015

    This paper investigates various roles that finance ministries can assume to promote those policies, regulations and standards which help to create a sustainable financial system. Finance ministries typically interact with the financial sector in many ways, from regulator and supervisory mandate setters to tax authority and sovereign debt issuers. All of these points of leverage

  • China Report: Internalizing Climate Mitigation for Financial Policy-Makers

    Date: 06-Oct-2015

    The paper also shows how the  objectives of financial policy-makers—such as investor protection, transparency, maintaining the safety and soundness of financial firms, financial stability, tackling systemic risk, reducing information asymmetries, tacking market failures and developmental objectives— offer multiple avenues to legitimize policy measures that can contribute to the greening of the financial system. In particular,

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