News

News

Mexico’s Central Bank, UNEP and UNDP Call on Financial Sector to Plan for Environmental Risks

Tue, May 19, 2020

The Central Bank of Mexico (Banco de México), the UN Environment Programme (UNEP) and the United Nations Development Programme (UNDP) call on the Mexican financial sector to frame and implement an agenda on environmental risk.

Mexico City, 19 May 2020 – Today, Banco de México and the United Nations Environment Programme (UNEP), with the support of the United Nations Development Programme (UNDP), presented the report “Climate and environmental risks and opportunities in Mexico’s financial system: From diagnosis to action,” which calls upon Mexican financial institutions to make a collective effort to incorporate environmental issues into their risk assessment and corporate governance strategies, as well as to take advantage of the opportunities that would result from the transition to a low-carbon economy.

The report highlights that climate change and environmental degradation are critical challenges of our time, as they lead to loss of natural capital, ecosystem degradation, lower productivity, and a reduction of the population’s well-being, at both the national and global level.

As part of the Network for Greening the Financial System (NGFS), the central banks along with other financial authorities have become more involved in initiatives geared towards encouraging financial institutions to accurately acknowledge and assess the impact of environmental risks, in view that such phenomena can have significant consequences on credit risk, financial stability, and social development.

This publication is a first in-depth diagnosis of the current degree of readiness of Mexican financial institutions to assess climate, environmental, and social risks. The results are based on a survey conducted on the senior management of over 60 institutions and consider nearly 90% of the credit portfolio of the banking system, 80% of the assets reported by fund managers to Mexico’s National Securities and Banking Commission (CNBV), 90% of the assets managed by the Retirement Funds Administrators (AFORES), and 44% of the assets reported by insurance companies.

When talking about this initiative the Governor of Banco de México, Alejandro Díaz de León, highlighted the importance of collective action of all the actors of the financial system. He also expressed his confidence that the report will serve as the basis for the development and implementation of standardized methodologies and criteria in the evaluation of environmental and social risks, which are essential for long-term prosperity.

“It is clear that we need to manage risk far better than we currently do, and this becomes more vital in the context of climate change which remains the existential challenge facing humanity. Financial institutions that sufficiently factor in climate risk, will be able to ensure the long-term sustainability of their portfolios. This study offers useful recommendations for financial institutions and regulators in preparing for the future,” said Inger Andersen, Executive Director of UNEP.

According to the report, although Mexican financial institutions have become more aware of climate risks, they are still required to integrate more systematic and standardized measures, implement the international agenda, and develop methodologies and areas of responsibility within their own corporate governance structures. In this regard, it draws upon implementing specific actions to mitigate environmental risks and increase green financing flows to the Mexican economy, such as:

  1. defining a national taxonomy for green and sustainable activities,
  2. setting clear timelines and corporate governance commitments by financial system actors to improve and monitor climate risk management,
  3. designing the incentives to incorporate environmental-related factors to firms’ strategic planning, and
  4. developing voluntary reporting standards for Mexican firms.

“Climate change and environmental degradation are critical challenges of our time, and the financial sector has a key role to play in tackling these issues. The recommendations of this report – such as clear timelines and commitments at the board level to incorporate social and environmental aspects into major plans of action, risk management policies, annual budgets, and business plans – will hopefully resonate with decision makers at the highest levels of the Mexican financial sector,” said Achim Steiner, Administrator, UNDP.

Read the full report in English here and in Spanish here.

New paper on how COVID-19 affects sustainable finance

Thu, May 07, 2020

New York/Geneva, 7 May 2020 – Today the International Network of Financial Centres for Sustainability (FC4S) launched a working paper on the implications of the COVID-19 pandemic on sustainable finance. The paper supports thinking on how to respond to the pandemic from a sustainable finance perspective. Specifically, it has two objectives.

The first is to set out what we know about the ways in which the many different components of our sustainable financial system – market actors, policymakers, regulators, and international institutions – are thinking, planning and reacting to the pandemic, with a focus on implications for sustainable finance markets.

The second objective is to set out a framework for assessing what levers may exist to strengthen the role of the financial system in supporting a low-carbon recovery, and the prospective roles for different communities of actors.

Importantly, the paper it is a work in progress and will be updated and refined every quarter as new information and new ideas come to our attention. This allows us to continuously gather information and insights to refine our analysis as we try to be as fluid as the global response to the pandemic is.

The working paper looks at four major sections: Financial and Capital Markets; Policy Action; Regulation and Supervision; and International Networks covering recent developments in response to COVID-19.

“If there is one thing that COVID-19 has emphasized, it is that natural capital underpins our economies. The health of people and the planet are one and the same. The 90% decline in green bond issuance is a matter of concern. If we aim to rebuild more green and resilient economies, we need to maintain healthy debt ratios and encourage all debt to be aligned with the Sustainable Development Goals,” said Marcos Mancini, Head of International Partnerships, UNEP Inquiry.

Some takeaways from the report include:

  • Pipelines of new greenfield low-carbon projects (e.g. renewable energy) are likely to be significantly reduced for the foreseeable future, both in developed and emerging markets.
  • Capital raising to fund the stimulus will need to take many forms – and green securities could play a major role.
  • Financial supervisors are likely to strengthen focus on long-term risks with exponential characteristics – potentially leading to a more granular assessment of climate risks.

To read the full report click here.

New FC4S Report Identifies Sustainable Finance Catalysts to Fund the 2030 Agenda

Wed, Apr 29, 2020

New York, 29 April 2020 – The International Network of Financial Centres for Sustainability’s (FC4S) latest report maps out and analyses the complex array of relationships of sustainable finance partnerships while highlighting how the sustainable finance ecosystem can better work together to achieve the global development goals of the next decade. The report, which is the result of a collaboration between the United Nations Environment Programme (UNEP) Inquiry, FC4S and the United Nations Development Programme Finance Sector Hub (UNDP FSH) does so by identifying exactly how these networks function and the interplay between the different initiatives.

“To achieve the ambitious 2030 Agenda we will need trillions to finance it first. This report makes the case for sustainable finance to play a major role in fulfilling that agenda, and it does so by mapping and analysing the intricate relationships of sustainable finance partnerships, be they networks, pledges, coalitions, platforms or principles, to determine exactly how these networks function,” said Stephen Nolan, Managing Director, FC4S.

‘Nudging the Financial System: A network analysis approach’, focuses on efforts currently undertaken by individual countries, regional groups, multilateral development banks (MDBs), international organizations (IOs), private sector entities, and non-governmental organizations (NGOs). The current global sustainable finance network is composed of 115 different “partnerships,” 5,181 constituent members and more than 10,000 connections. Based on network analytics, the report shows that 75% of network participants is connected to only one partnership and only 13% of the network participants is connected to three or more other partnerships. This shows that the core of the sustainable finance agenda is mainly driven by a small number of network constituents, including financial institutions, regulators and MDBs.

“Recent events have emphasized the interdependence of our economic and financial systems with nature. They showed that the decade ahead needs to be a decade of acceleration, one that drives transformative action and where the multilateral system converges to present a united front. This is no different for the sustainable finance agenda and the financial regulators and market players driving the agenda in this space,” said Marcos Mancini, Head of International Partnerships, UNEP Inquiry.

“While the work initiated by the different partnerships mapped out in this report has certainly contributed to an acceleration in the number of green finance actions and policy and regulatory measures issued, rethinking and transforming our financial system to safeguard our commons and realize opportunities for all will require to pursue a collective action agenda within the sustainable finance ecosystem,” said Marcos Neto, Director, UNDP FSH.

An increasing number of partnerships at the international, national and market-based levels have driven the overall transition towards a sustainable financial system capable of delivering a sustainable real economy. The growth of sustainable finance partnerships at these three levels between 1990 and 2019 displays an exponential trend, with a significant acceleration in the number of initiatives established from around 2009 onwards. During the first two decades, initiatives were established at a rate of approximately 1 per year, but for the 2009-2019 period, this rate increased to 7.4 per year.

This exponential growth in sustainable finance initiatives highlights the mainstreaming of the sustainable finance agenda, but problems still remain. Many financial institutions have expressed confusion about the abundance of partnerships, which in turn could be a barrier to catalyse mass adoption.

The report also highlights that, on average, both banks and asset managers were involved in more than 10 initiatives, making them more central to the network than insurance providers and asset owners. Despite having similar means, the top 20 asset managers and banks exhibit a wide deviation in the number of initiatives they are involved with. Banks have the largest spread (between 0 and 43) indicating that, while there are a few leaders frequently involved in most of the activities in the sustainable finance space, there are also some institutions with a rather nascent sustainability agenda.

One of the major conclusions to come out of the report is that given the growth in network partnerships an effort by members of a sustainable finance network to increase and broaden the coordination of their activities can help the network develop, as well as express and sustain a more coherent structure at a higher level. This would allow for increased efficiency in system-wide outcomes and help to green the financial system and mainstream sustainable finance as one the pillars to achieving the 2030 agenda.

The full report is available here.

For more information, please contact:

Nader Rahman
Communications Manager (New York)
nader.rahman@un.org, +1 (718) 517-1684

Measures backing green finance more than doubled since 2015, UN figures show

Fri, Dec 13, 2019

Madrid, 13 December 2019 – As world leaders gather in Madrid to drive climate action, figures released by the UN Environment Programme (UNEP) show that the number of policy and regulatory measures backing green finance has more than doubled since 2015.

The measures database from UNEP and the Green Growth Knowledge Partnership (GGKP) shows that there are now at least 391 national and sub-national policy and regulatory measures on green finance in place globally – this is a 106 per cent increase since 2015. The green finance movement is only accelerating, the database finds, with a record 79 new measures were implemented or announced in 2019.

“Many transformative plans are being put in place to create zero-carbon, biodiversity-friendly societies and economies,” said UNEP Executive Director Inger Andersen. “These plans need the full and unequivocal backing of the global financial system. So while it is encouraging to see the acceleration of green financing, the financial system and those who regulate it, need to urgently step up and drive huge cuts in greenhouse gas emissions.”

Released on the sidelines of the UN Climate Change Conference (COP 25) in Madrid during a meeting of the Coalition of Ministers of Finance for Climate Action, the figures from the database demonstrate progress in certain key areas.

Reporting and disclosure is a focal point for policy and regulatory action – comprising roughly 25 per cent of all measures implemented. An increasing number of measures are targeting multiple asset classes, with policy frameworks tackling systemic issues like climate risk across banking, investment and insurance. Just over two-thirds of measures are being implemented in developed economies.

“These measures help clarify the responsibilities of financial institutions with respect to environmental factors within capital markets,” said Benjamin Simmons, head of the GGKP. “This includes strengthening flows of information relating to environmental factors within the financial system, such as requirements for public disclosure of climate-related risks to investment portfolios.”

The database includes measures to promote the allocation of capital to green sectors, such as fiscal incentives for investments in green assets, and the introduction of frameworks to support product development (e.g. green bonds), as well as measures to strengthen environmental risk management practices within institutions. It is the most comprehensive resource of policy and regulatory information relating to environmental aspects of green finance.

“Policy and regulatory action is a critical driver of the transition to green and sustainable finance. With this database, we are able to map the ways in which policymakers and regulators are influencing market practice,” said UNEP’s Jeremy McDaniels, who developed the database. “This type of analysis can help public authorities learn from others’ experiences, raise ambition and strengthen understanding of how their actions are leading to positive changes.”

The GGKP is an initiative led by the Global Green Growth Institute (GGGI), The Organisation for Economic Co-operation and Development (OECD), United Nations Industrial Development Organization (UNIDO), UNEP and the World Bank.

NOTES TO EDITORS

About the UN Environment Programme

UNEP is the leading global voice on the environment. It provides leadership and encourages partnership in caring for the environment by inspiring, informing and enabling nations and peoples to improve their quality of life without compromising that of future generations.

For more information, please contact:

Nader Rahman, Communications Manager (New York), +1 (718) 517-1684,
Jessika Berns, GGKP Communications Manager (Geneva), +41 22 917 8305,
Keishamaza Rukikaire, Head of News & Media, UNEP, +254717080753

Lagos Throws Financial Might Behind Sustainable Finance Network

Wed, May 29, 2019

Lagos, 29 May 2019 – The city of Lagos today joined Financial Centres for Sustainability (FC4S), a UN Environment Programme-convened international network that seeks to shift private capital to climate friendly and green investments.

Lagos is the third African city to join the network, after Casablanca and Nairobi, and is the first in West Africa. The megacity’s stock exchanges have over 860 listed securities, valued at more than USD 360 billion.

“Huge flows of private capital are needed to deliver the green and sustainable finance needed to implement the Paris Agreement and sustainable development goals,” said Pierre Ducret, Co-chair of FC4S. “Lagos’ inclusion in the FC4S network is a major boost to these efforts.”

FC4S has grown into a global group of 24 leading financial hubs since its creation in 2017. Structured as a partnership between international financial centres and the UN Environment Programme, other members include Abu Dhabi, London and Hong Kong.

The network is in the process of setting up FC4S Africa – its third regional platform, following the launch of Asian and European platforms in 2018. FC4S Africa will provide advisory services for financial centres on sustainable finance strategies, technical assistance and outreach.

“The adverse effects of climate change globally cannot be overemphasized,” said Mr. Babajide Sanwo-Olu, Executive Governor, Lagos State. “I am confident that the establishment of the Lagos Financial Centre for Sustainability will contribute significantly to Lagos State’s push to attract sustainable private capital that will complement public resources to address infrastructure and social challenges and enhance climate change mitigation.

“We support this initiative and congratulate FMDQ OTC Securities Exchange and the UN Environment Programme for championing this innovative private sector-led solution.”

The UN Environment Programme assisted Nigeria with the design and launch of a sovereign green bond in 2018, only the third such sovereign bond ever launched and the first in a developing country. This led to the UN Environment Programme working with the financial community in helping Nigeria draw up a Sustainable Finance Roadmap for Nigeria.

“Lagos joining the FC4S opens up new possibilities for Nigeria and countries in West Africa to leverage sustainable finance for social and climate impact,” said Satya S. Tripathi, UN Assistant Secretary-General and Secretary of the UN Environment Management Group. “We welcome Lagos into the fold and look forward to doing great things together.”

For more information, please contact:

Nader Rahman
Communications Manager (New York)
nader.rahman@un.org, +1 (718) 517-1684

Luxembourg, UN Environment Sign Deal to Accelerate Sustainable Finance

Fri, Apr 12, 2019

Washington D.C., 12 April 2019 – Luxembourg today signed an agreement to back a UN Environment-convened network that helps the world’s major financial centres to increase green and sustainable finance.

The International Network of Financial Centres for Sustainability (FC4S) has 22 members from Europe, Asia, Africa, and North America – each of them committed to shifting their investments to support the goals of the 2030 Agenda for Sustainable Development and the Paris Agreement.

Home to Europe’s largest investment fund center with a 62 per cent global market share in cross-border funds, along with136 international banks from 29 countries and over 35,000 listed tradable securities, Luxembourg is today one of the world’s leading financial centers.

“A recognized European leader in green and sustainable finance, Luxembourg is stepping up its commitment to support the efforts of the International Network of Financial Centers for Sustainability,” said Pierre Gramegna, Minister of Finance of Luxembourg, as he signed the agreement to provide USD 500,000 in funding to FC4S. “This commitment is aimed at helping the FC4S to better connect financial centers, to foster exchange of knowledge and thus help shaping the trends and developments that will define sustainable finance in the years to come.”

The levels of green and sustainable finance needed to deliver on the Paris Agreement and the sustainable development goals are still insufficient. For example, the World Resources Institute estimates that USD 5.7 trillion will need to be invested annually in green infrastructure by 2020. However, 2018 research by the United Nations Framework Convention on Climate Change found that climate finance, while growing, had hit only USD 681 billion annually by 2016.

“Much of the resources needed to finance the transition to a low-emission, sustainable world will have to come from private sources,” said Satya S. Tripathi, UN Assistant Secretary-General and head of UN Environment’s New York office. “This is why the work of FC4S, helping financial centres to green their flows, is crucial. UN Environment is very grateful to Luxembourg for increasing its commitment to green and sustainable finance.”

Luxembourg’s commitment to financial innovation and sustainable finance has led to the launch of a wide range of initiatives, including  the first Stock Exchange dedicated to green, socially responsible and sustainable securities: The Luxembourg Green Exchange (LGX) in 2016.

The LGX has the largest market share of listed green bonds worldwide. Luxembourg leads the European market when it comes to responsible investment funds, with a market share of 39 per cent. 69 per cent of worldwide assets in microfinance investment vehicles are Luxembourg domiciled funds.

“Financial centres are key pressure points in the global financial system, and FC4S members like Luxembourg are pressing hard to make the system sustainable,” said Stephen Nolan, head of the FC4S network. “This contribution from Luxembourg is yet another sign that the smart money is getting behind sustainability.”

The signing took place at an event during the Spring Meetings of the World Bank Group and the International Monetary Fund, at which Mr. Gramegna, John Berrigan, Deputy Director-General, Financial Services and Capital Markets Union (FISMA), and Marcos Ayerra, Chair of the Inter-American Regional Committee and others looked at how to increase the role of financial centres in financing sustainability.

For more information, please contact:

Nader Rahman
Communications Manager (New York)
nader.rahman@un.org, +1 (718) 517-1684

OECD, UN Environment and World Bank call for a radical shift in financing for a low-carbon, climate-resilient future

Wed, Nov 28, 2018

The OECD, UN Environment and World Bank Group today called on leaders of G20 countries to do more to enable a radical shift of investment into low-carbon, climate-resilient infrastructure as a way to limit the impact of climate change.

Delivering a new report, Financing Climate Futures: Rethinking Infrastructure, to the G20 at its Summit in Buenos Aires, the three International Organisations said governments need to adopt a more transformative agenda on low-carbon, climate-resilient investments if they are to meet the Paris Agreement goal of cutting CO2 emissions to net zero in the second half of the century and build resilience to climate change.

Financing Climate Futures responds to an invitation from the 2017 G20 Hamburg Climate and Energy Action Plan to the three Organisations to document public and private activities for making financial flows consistent with the Paris goals. It follows the 2017 OECD report Investing in Climate, Investing in Growth, an input to the G20 German presidency which laid out the economic case that climate action and growth can go hand in hand provided that strong climate policies are packaged with fiscal and structural reforms. The Financing Climate Futures initiative aims to help countries move beyond an incremental approach to financing low-emission, resilient infrastructure towards the transformational agenda needed for decisive climate action. The initiative is supported by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety of Germany.

“Investing in low-carbon, climate-resilient infrastructure is vital for the future of the planet, and it can also drive economic growth,” said Gabriela Ramos, OECD Chief of Staff and G20 Sherpa. “The infrastructure challenge creates incentives for reforms that can deliver better performance on both counts. We are losing time though – if we want to deliver we need to move much faster and achieve a systemic shift of trillions of dollars in green investment.”

Noting that energy, transport, buildings and water infrastructure contribute over 60% of greenhouse gas emissions, the report lays out six ways to bring public and private financial flows in line with the Paris goals, in particular in infrastructure finance. These include better planning and foresight, integrating climate concerns into all budgetary decisions and leveraging public procurement into low-emission, resilient infrastructure.

Financing Climate Futures outlines key actions to drive low-carbon investment:

  • Plan sustainable and resilient infrastructure for a low-emission and resilient future
  • Unleash innovation to accelerate the transition to low-emissions technologies, business models and services
  • Ensure fiscal sustainability for a low-emission, resilient future
  • Reset the financial system in line with long-term climate risks and opportunities
  • Rethink development finance for climate
  • Empower city governments to build low-emission and resilient urban societies

Investment in sustainable infrastructure can boost economic growth

The report says that scaling-up public and private investments in low-emission and sustainable infrastructure is critical to increase resilience and avoid further carbon lock-in.

OECD analysis in Investing in Climate, Investing in Growth showed that shifting infrastructure investment into low-carbon options, combined with structural reforms, could increase global GDP by as much as 5% by 2050, while cutting emissions. That includes the effects of lower risks of damage from extreme weather events. The cost of shifting from brown to green infrastructure would be more than offset by fuel savings. According to the OECD, governments spend half a trillion dollars a year subsidising oil, coal or gas and are not making enough use of public spending as a lever to decarbonise economies by investing in low-emissions infrastructure and innovation. Power plants under construction or in planning will lead to a near doubling of emissions from power generation, while incentives to shift to green energy and infrastructure, and disincentives to emit in all sectors, remain weak.

“We cannot ignore the new reality of powerful weather events that threaten jobs, homes, food security and other critical areas of our lives,” said Kristalina Georgieva, Chief Executive Officer of the World Bank. “The infrastructure that is built today must be ready to cope with tomorrow’s changing climate. We need the right incentives and regulations to urgently accelerate funding to these projects.”

Change is happening, but too slowly

The final report of the UN Environment Inquiry into the Design of a Sustainable Financial System, released in April, found that progress on reforming the global financial system over the last four years has started to deliver financing for sustainability and set up the next wave of action. Sustainability is becoming part of routine practice within financial institutions and regulatory bodies, green bond issuance grew from US$11 billion in 2013 to US$155 billion in 2017, and the number and range of policy measures to advance sustainable finance increased from 139 in 2013 to 300 by 2017.

However, much more needs to be done, particularly in infrastructure.

“With only 12 years to head off the worst impacts of climate change, we need rapid reform of our economies and societies, including a switch to low-carbon infrastructure,” said Joyce Msuya, Acting Executive Director of UN Environment. “The G20’s economic power and political influence will be crucial to unlocking the investment we need to make this switch.”

Download the report

 

About the OECD

Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.

OECD press contact: OECD Media Officer Catherine Bremer, +33 1 45 24 80 97, catherine.bremer@oecd.org.

About UN Environment

UN Environment is the leading global voice on the environment. It provides leadership and encourages partnership in caring for the environment by inspiring, informing, and enabling nations and peoples to improve their quality of life without compromising that of future generations. UN Environment works with governments, the private sector, civil society and with other UN entities and international organizations across the world.

UN Environment press contact: Keith Weller, Head of News and Media, +254 (0) 742 98 38 82, keith.weller[at]un.org

About the World Bank Group

The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world. For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org.

World Bank press contact: Uwi Basaninyenzi, Senior Communications Officer, +1 (202) 458-2353, unbasaninyenzi@worldbankgroup.org.

Paris and Shanghai to Chair Network of Financial Centres for Sustainability

Fri, Oct 19, 2018

Shanghai, 19 October 2018 – The world’s financial centres have taken an important step forward to scale up the financing required for climate action and sustainable development. On 8 October, the IPCC concluded that an additional 1.5% in global investment would be needed to hold global warming to 1.5 degrees Celsius. Mobilising the world’s financial centres will be crucial to achieve the system transition that the IPCC has recommended.

At the 2nd meeting of the global network of Financial Centres for Sustainability (FC4S) in Shanghai, two co-chairs have been appointed to provide strategic leadership: Pierre Ducret, board member of the Paris-based Finance for Tomorrow initiative and Kong Wei, chair of the Shanghai Green Finance Committee. In addition, a new Wall Street Working Group on Sustainable Finance is being formed, and is considering joining the network to represent New York.

​The FC4S Network brings together nearly 20 of the world’s leading financial hubs to harness the power of place for climate action and sustainable development. Established in September 2017, it has already:

– Introduced an assessment programme to evaluate the activities undertaken by its members to accelerate flows of green and sustainable finance,

– Launched a statement calling for international convergence towards a shared language in the development of taxonomies on green and sustainable finance,

– Established regional platforms in Europe and Asia to stimulate further engagement from financial centres,

– Identified best practice across financial centres on how to expand the green bond market, and

– Promoted cooperation between financial centres on the application of fintech to climate and sustainability challenges (such as blockchain).

​Pierre Ducret from Finance for Tomorrow said: “The IPCC report has shown more clearly than ever the need to mobilise the trillions for climate and accelerating actions is a priority for France.  I’m honoured to be appointed as a co-chair of the Financial Centres for Sustainability network – and view this as a great opportunity to strengthen international cooperation at a time of great uncertainty.”

Kong Wei, convenor of the Shanghai Green Finance Committee said: “Green finance is a national priority in China to develop a cleaner and more prosperous economy. I feel privileged to take up the role of co-chair of the Network and will use this opportunity to promote practical measures that enable all financial centres to play their role in the transition that lies ahead.”

​Curtis Ravenel, Global Head of Sustainable Business & Finance, Bloomberg said: “To solve the climate challenge, we need more sustainable finance product innovation and scale across the U.S. and international capital markets. Along with the growing roster of global hubs that are part of the FC4S Network, Bloomberg is working with a number of financial institutions and others to explore the formation of a Wall Street Sustainable Finance working group to scale capital deployment aligned with the goals of the Paris Agreement.”

Satya Tripathi, Assistant Secretary General, UN Environment said: “UN Environment works across the sustainability and finance agenda – and I see that the FC4S Network is having a significant impact on the international policy sphere. These moves will further consolidate the Network’s leadership role.”

Nick Robins, the founder of the FC4S network and Special Advisor on Sustainable Finance, UN Environment said: “We need financial centres to be fit for purpose in the rapid transition that lies ahead. With Pierre Ducret and Kong Wei as co-chairs, the network has the strategic leadership it needs for the next phase.”

Notes to Editors​

The FC4S is a partnership between leading financial centres and the United Nations Environment Programme, which acts as its Convenor and Secretariat. The objective of the Network is to enable financial centres to exchange experience, drive convergence, and take action on shared priorities to accelerate the expansion of green and sustainable finance. Following from endorsement by G7 Environment Ministers under the 2017 Italian G7 Presidency, the FC4S Network was launched in September 2017 with the support of the Italian Ministry of Environment, Land, and Sea. The Network is headquartered in Geneva, Switzerland

For further information, see www.fc4s.org, or contact Jeremy McDaniels (Head of Projects, FC4S Network), at Jeremy.McDaniels@un.org.

Current members of the Network include:​

  • Astana: Astana International Financial Centre

  • Casablanca: Casablanca Finance City Authority

  • Dublin: Sustainable Nation Ireland

  • Frankfurt: Green and Sustainable Finance Cluster Germany

  • Geneva: Sustainable Finance Geneva

  • Hong Kong: Green Finance Task Force

  • London: City of London Green Finance Initiative

  • Luxembourg: Luxembourg for Finance

  • Liechtenstein: Liechtenstein Bankers Association

  • Milan: Centro Finanziario Italiano per la Sostenbilita (CFIS)

  • Paris: Finance for Tomorrow

  • Seoul: Seoul Metropolitan Government

  • Shanghai: Lujiazui Financial City

  • Shenzhen: Shenzhen Green Finance Committee

  • Stockholm: Stockholm Green Digital Finance

  • Toronto: Toronto Finance International

  • Zurich: Swiss Sustainable Finance

Partner organisations include:

  • Climate Bonds Initiative

  • Climate-KIC

  • UN-backed Principles for Responsible Investment

  • Sustainable Stock Exchange Initiative

  • UNEP Finance Initiative

The press release can be downloaded here.

​The G7 Bologna Communiqué of Environment Ministers from June 2017 can be found here.

​The Casablanca statement on financial centres for sustainability from September 2017 can be found here.

​The UN Environment report, Accelerating Financial Centres’ Action for Sustainable Development, can be found here.​

The FC4S Statement, “Building Shared Language for Green and Sustainable Finance”, can be found here. The Briefing accompanying the statement can be found here.

New Research Lays out How to Deliver Investment in Sustainable Infrastructure

Tue, Sep 25, 2018
  • New research released today says serious and rapid investment in sustainable upgrades and alternatives is needed to limit climate change.
  • The report finds that energy, transport, buildings and water infrastructure contribute more than 60 per cent of greenhouse gas emissions.

New York, 25 September 2018 – With high-carbon infrastructure responsible for the majority of global greenhouse gas emissions, serious and rapid investment in sustainable upgrades and alternatives is needed to limit climate change, according to new research released today.

A summary of an upcoming UN Environment, OECD and World Bank Group report, Financing Climate Futures: Rethinking Infrastructure, lays out six ways to bring public and private financial flows in line with the Paris Agreement goals, in particular in infrastructure finance.

Financing Climate Futures says governments must adopt a more transformative agenda on financing for a low-carbon future to meet the Paris temperature goals by peaking CO2 emissions as soon as possible and then bringing them down to net zero or lower in the second half of the century.

The solutions it lays out include better planning and foresight, integrating climate concerns into all budgetary decisions and leveraging public procurement into low-emission infrastructure.

“Building climate-compatible infrastructure is a cornerstone for the success of the Paris Agreement and broader sustainability goals, and we have seen encouraging momentum in this direction. But we need to start making real change happen,” said Erik Solheim, Head of UN Environment.

“Only sustainable infrastructure can deliver huge benefits to people and the planet. To encourage the capital allocation that will unlock this promise, however, we need new thinking. This report presents some of the steps we can take to make this change.”

Change is happening, but too slowly

The report finds that energy, transport, buildings and water infrastructure contribute more than 60 per cent of greenhouse gas emissions. This means that scaling-up public and private investments in low-emission and sustainable infrastructure is critical to increase resilience and avoid further carbon lock-in.

The final report of the UN Environment Inquiry into the Design of a Sustainable Financial System, released in April this year, found that progress on reforming the global financial system over the last four years has started to deliver financing for sustainability and set up the next wave of action.

The Inquiry found that sustainability is becoming part of routine practice within financial institutions and regulatory bodies, green bond issuance grew from US$11 billion in 2013 to US$155 billion in 2017, and the number and range of policy measures to advance sustainable finance increased from 139 in 2013 to 300 by 2017.

However, much more needs to be done, particularly in infrastructure.

“We cannot ignore the new reality of powerful weather events that threaten jobs, homes, food security and other critical areas of our lives,” said Kristalina Georgieva, Chief Executive Officer of the World Bank. “The infrastructure that is built today must be ready to cope with tomorrow’s changing climate. We need the right incentives and regulations to urgently accelerate funding to these projects.”

Investment in sustainable infrastructure can boost economic growth

OECD analysis has shown that shifting infrastructure investment into low-carbon options, combined with structural reforms, could increase global Gross Domestic Product by as much as 5 per cent by 2050, while cutting emissions. That includes the effects of lower risks of damage from extreme weather events. The cost of shifting from brown to green infrastructure would be more than offset by fuel savings.

According to the OECD, governments still spend half a trillion dollars a year subsidizing oil, coal or gas and are not making enough use of public spending as a lever to decarbonize economies by investing in low-emissions infrastructure and innovation. Power plants under construction or in planning will lead to a near doubling of emissions from power generation, while incentives to shift to green energy and infrastructure, and disincentives to emit in all sectors, remain weak.

“After all the promises made in Paris and despite having all the tools we need at hand to move forward, this inertia risks us losing the war on climate change,” said OECD Secretary-General Angel Gurría. “We need to urgently deliver on our climate and development goals, and to do that we need a systemic shift of trillions of dollars towards low-emission and resilient investment.”

The report, which will be released in full at the next climate conference in Poland this December, outlines key actions that will help deliver this investment:

  • Plan sustainable and resilient infrastructure for a low-emission and resilient future
  • Unleash innovation to accelerate the transition to low-emissions technologies, business models and services
  • Ensure fiscal sustainability for a low-emission, resilient future
  • Reset the financial system in line with long-term climate risks and opportunities
  • Rethink development finance for climate
  • Empower city governments to build low-emission and resilient urban societies

NOTES TO EDITORS

Download the preliminary report

About UN Environment

UN Environment is the leading global voice on the environment. It provides leadership and encourages partnership in caring for the environment by inspiring, informing, and enabling nations and peoples to improve their quality of life without compromising that of future generations. UN Environment works with governments, the private sector, the civil society and with other UN entities and international organizations across the world.

For more information, please contact:

Keith Weller, Head, UN Environment News and Media, +254 (0) 742 98 38 82, keith.weller[at]un.org

World’s Leading Financial Centres urge compatibility, connectivity between new standards for sustainable finance

Tue, Sep 18, 2018

Halifax, 18 September 2018 – A “shared language” for green and sustainable finance is critical for the growth of new markets, and for compatibility and coherence between jurisdictions, the FC4S Network – the world’s platform of leading financial centres working on sustainability – said in a joint statement released after a G7 meeting on sustainable finance in Halifax.

​The Network said new definitions, standards, and classification systems for sustainable finance should be developed to avoid confusion among policy and regulatory authorities and a real risk of increasing transaction costs for financial institutions seeking to provide sustainability-related products and services.

Importantly, several processes to develop “taxonomies” for sustainable finance are currently planned, or already underway – including the establishment by the European Union of a Technical Expert Group to develop a clear classification of economic activities and sectors which can be branded as “sustainable”.

To help achieve convergence, the statement sets out ten principles including the scope, purpose, good practice, proportionality and mechanisms of the taxonomies.

The statement – launched at a high-level Roundtable meeting on the eve of the 2018 G7 Environment, Energy, and Ocean Ministers’ meeting in Halifax – represents the continuation of G7 work on sustainable finance initiated by the Italian Presidency, where cooperation among financial centres was endorsed and encouraged. The Network itself was then launched by UN Environment in Casablanca in September 2017 with a mission to exchange experience and take common action on shared priorities to accelerate the expansion of green and sustainable finance.

Speaking at the Roundtable meeting, the Honourable Catherine McKenna, Canadian Minister of Environment and Climate Change, said: “The transition to a sustainable global economy represents a $26 trillion economic opportunity. Financial centres play a significant role in shifting capital to sustainable investment. As host of the G7 Environment, Oceans and Energy Ministers Meeting, Canada welcomes the leadership of the Network of Financial Centres for Sustainability in developing these ten principles, which are an important step to advancing sustainable finance and shifting billions to trillions of dollars to clean investment across the globe.”

​Jennifer Reynolds, President and CEO of Toronto Finance International, said: “Toronto is North America’s 2nd largest financial centre and has the opportunity to develop a leading hub for green and sustainable finance – we are proud to have been a leading contributor to the development of this statement. Clear and coherent language for sustainable finance is key if we are to move from niche to mainstream – and this statement sets out how to coordinate this evolving environment.”

​Francesco La Camera, Director General for Sustainable Development and International Affairs of the Italian Ministry of Environment, said: “It is remarkable how far the FC4S Network has come since its endorsement by the G7 in Italy last year – bringing in more than ten leading international centres to shape a new agenda for public-private collaboration. We are proud to support the Network as it continues to grow.”

​Erik Solheim, Executive Director of UN Environment said: “UN Environment works across the sustainability and finance agenda – and I can recognize that the FC4S Network is having a significant impact on the international policy sphere. I hope G7 nations can now take these principles forward by applying them in their own domestic processes.”

​Nick Robins, Senior Advisor on Sustainable Finance, said: “These ten principles are an important foundation for the technical discussions that market and policy institutions will face together – and we hope that the FC4S Network can serve as a platform for dialogue on these challenging issues.”

Notes to Editors

The FC4S Statement, “Building Shared Language for Green and Sustainable Finance”, can be found here. The Briefing accompanying the statement can be found here.

For further information, see www.fc4s.org, or contact Jeremy McDaniels (Head of Projects, FC4S Network), at Jeremy.McDaniels@un.org.

About the FC4S Network

The FC4S is a partnership between leading financial centres and the United Nations Environment Programme, which acts as its Convenor and Secretariat. The objective of the Network is to enable financial centres to exchange experience, drive convergence, and take action on shared priorities to accelerate the expansion of green and sustainable finance. Following from endorsement by G7 Environment Ministers under the 2017 Italian G7 Presidency, the FC4S Network was launched in September 2017 with the support of the Italian Ministry of Environment, Land, and Sea. The Network is headquartered in Geneva, Switzerland.

Current members of the Network include:

Astana: Astana International Financial Centre
Casablanca: Casablanca Finance City Authority
Dublin: Sustainable Nation Ireland
Frankfurt: Green and Sustainable Finance Cluster Germany
Geneva: Sustainable Finance Geneva
Hong Kong: Green Finance Task Force
London: City of London Green Finance Initiative
Luxembourg: Luxembourg for Finance
Liechtenstein: Liechtenstein Bankers Association
Milan: Centro Finanziario Italiano per la Sostenbilita (CFIS)
Paris: Finance for Tomorrow
Seoul: Seoul Metropolitan Government
Shanghai: Lujiazui Financial City
Shenzhen: Shenzhen Green Finance Committee
Stockholm: Stockholm Green Digital Finance
Toronto: Toronto Finance International
Zurich: Swiss Sustainable Finance

Partner organisations include:

Climate Bonds Initiative
Climate-KIC
Principles for Responsible Investment
Sustainable Stock Exchange Initiative
UNEP Finance Initiative

The press release can be downloaded here.

The G7 Bologna Communiqué of Environment Ministers from June 2017 can be found here.

The Casablanca statement on financial centres for sustainability from September 2017 can be found here.

The UN Environment report, Accelerating Financial Centres’ Action for Sustainable Development, can be found here.

About Toronto Finance International (TFI)

​TFI (www.tfi.ca) is a public-private partnership between Canada’s three levels of government, the financial services sector and academia. TFI’s mission is to lead collective action that drives the competitiveness and growth of Toronto’s financial sector and establishes its prominence as a leading international financial centre. (TFI was formerly known as Toronto Financial Services Alliance.)

For more information and to arrange interviews, contact:

Jeremy McDaniels (Head of Projects, FC4S Network), at Jeremy.McDaniels@un.org.

Sonia Prashar (TFI media contact), at soniaprashar@sppublicrelations.com.

Copyright © United Nations Environment Programme. All Rights Reserved. Contact us