Publications

3rd Update Report: Pathways to Scale

This is the 3rd Update Report of the UNEP Inquiry, it is focused on the challenge of financing the low-carbon transition.

It explores how innovative ideas and practices can be made more effective, adopted more widely, and taken to scale—and as a result move the trillions that are required. Scaling-up proven but limited innovations, is a common development challenge, requiring the adept handling of inevitable technical and institutional barriers, and the creation of viable pathways which can overcome outdated but often resilient conventional wisdoms.

The report profiles innovations in relation to banks, bond markets, institutional investors and central bank balance sheet, and also one cross-cutting policy tool: long-term environmental risk assessment

It discusses the challenge of turning innovative potential into system-wide change. Barriers are considerable, and include complexity, incumbent interests, fragmented governance, and conventional wisdom. Great vision, ideas and technological breakthroughs can and do transform the financial system, but often unexpectedly, and with unforeseen consequences. Designing for the future requires consideration of the disruptions already impacting today’s financial system. These include post-crisis regulation, rapid technological change, new business models, the rise of shadow banking, the ascendance of emerging economies and shifting consumer expectations.

The report argues that rapid scaling requires the development of viable pathways based on four key features. These include an articulation of sustainable financial system purpose and performance (e.g. efficiency, effectiveness, resilience); detailed assessment of potential within key asset pools (such as banking, bond markets, institutional investors); the design of specific tools (such as credit guidelines, risk tools, transparency, new investment structures); and the harnessing of critical catalysts for change (such as technology and the rise of emerging economies).