G20 Leaders Welcome “Green Finance” in Summit Communiqué
Date: 29 Sep 2016
World leaders meeting at the G20 Summit in Hangzhou, China today issued a Communiqué recognising the importance of scaling up green finance. It welcomed options put forward by the G20 Green Finance Study Group (GFSG) that is mandated to develop voluntary proposals for scaling up private capital for green investment.
This is the first time that G20 leaders have referenced the importance of green finance in the summit’s annual Communiqué. At the initiative of the Chinese G20 presidency, the G20 established the GFSG, co-chaired by China and the United Kingdom with support from the United Nations Environment Programme (UNEP) as secretariat.
The G20 Leaders Communiqué states that: “We recognize that, in order to support environmentally sustainable growth globally, it is necessary to scale up green financing. The development of green finance faces a number of challenges, including, among others, difficulties in internalizing environmental externalities, maturity mismatch, lack of clarity in green definitions, information asymmetry and inadequate analytical capacity, but many of these challenges can be addressed by options developed in collaboration with the private sector. We welcome the G20 Green Finance Synthesis Report submitted by the Green Finance Study Group (GFSG) and the voluntary options developed by the GFSG to enhance the ability of the financial system to mobilize private capital for green investment. We believe efforts could be made to provide clear strategic policy signals and frameworks, promote voluntary principles for green finance, expand learning networks for capacity building, support the development of local green bond markets, promote international collaboration to facilitate cross-border investment in green bonds, encourage and facilitate knowledge sharing on environmental and financial risks, and improve the measurement of green finance activities and their impacts.”
Welcoming the Communiqué, Zhou Xiaochuan, Governor of the People’s Bank of China, representing the GFSG co-chair said: “The global financial system has a major role to play in mobilizing private capital for investments in green sectors, and appropriate incentives should to be given to green investment.”
Mark Carney, Governor of the Bank of England, representing the UK and GFSG co-chair, said: “The adverse effects of climate change threaten economic resilience, growth and financial stability. Given the scale of the investment capital needed, financial markets are best placed to finance the transition to a low carbon economy. So the work of the Green Finance Study Group is critical in identifying options to address institutional and market barriers to bringing green finance into the mainstream.”
Erik Solheim, Head of UN Environment, said: “The G20 is a leader on bringing together the goals of economic performance and environmental preservation, thanks in large part to China’s presidency. Green finance is vital to a green future, and we at UN Environment are proud to build on our work in this area in supporting the G20.”
Alongside the Communiqué, G20 members also released a Green Finance Synthesis Report that examines the necessity and challenges of developing green finance. It provides seven options that could be adopted by countries and market actors, and that could support international cooperation in mobilising green finance overcome these challenges including: promoting international collaboration to facilitate cross-border investment in green bonds, and facilitating knowledge sharing on environmental and financial risks.
*UN Environment’s Inquiry is delighted to host the new G20 Green Finance Study Group Document Repository where you can the download the full Communiqué, Synthesis Report and a selection on input papers.