1st Update Report: Invitation and Background
This is the Inquiry’s first update report. It outlines the starting points and questions for the Inquiry. Key questions include:
- Tomorrow’s Financial System – What are the emerging dynamics in the financial system and the real economy which could be important for progress towards or away from a sustainable financial system?How do existing financial rules and regulations need to evolve in order not to hold back necessary green financial innovation? What new financial frameworks are needed to encourage specifically green financial innovation?
- Systems horizons – What is the relationship between long-term investment horizons and sustainability outcomes? How can the short- and long-term dynamics of the financial system be reconciled with a green and inclusive green economy?
- Systems governance - How do international finance governance institutions and processes take environmental and social issues into account? How could the mandates for rule setters be updated to take account of the systemic risks associated with the financial system’s impact on green and inclusivity outcomes, and vice versa? What are the essential principles that should guide policy options for a sustainable financial system?
- Responsibility, information and incentives – How important is the perceived gap between fundamental financial responsibilities (such as fiduciary duty) and sustainability factors? How can the benchmarks and ratings that drive capital allocation become better aligned with the green economy? How can the practice of disclosure by corporations, financial institutions and regulators evolve to strengthen market discipline for a sustainable financial system? What is case for (and against) and practice of different approaches to policy-incentivized lending in addressing environmental and social objectives?
- Pathways – How best can financial policy and regulatory aimed at environmental and social outcomes be sequenced and how can trade-offs be understood? How can decision-making structures at the national and international levels evolve to deliver joined up governance which aligns the financial system and the green economy? How will moves towards a sustainable financial system impact upon the competitiveness of nations and development of the world’s financial centres? What is the role of citizens as consumers, investors, employees and/or as social movements in effecting the financial system`s impact on environmental and social outcomes?
Related Inquiry Publications
- The Financial System We Need: From Momentum to Transformation
- 4th Update Report: The Coming Financial Climate
- 2nd Update Report: Insights from Practice
- The Financial System We Need: Aligning the Financial System with Sustainable Development
- 3rd Update Report: Pathways to Scale