|The last couple of weeks have been full of publications and announcements. We thought you would like to hear what we have been up to.
Last week during the United Nations General Assembly, UN Environment, the OECD and the World Bank launched the executive summary of the Financing Climate Futures: Rethinking Infrastructure report.
The report 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.
Along with the synthesis report, UN Environment also shared a briefing titled Shifting the Lens. The briefing is one part of the broader Financing Climate Futures initiative focusing on the identification of critical uncertainties posing constraints to aligning financial flows with climate objectives, and in particular infrastructure investment. It adopts a foresight and scenarios approach to offer insights into ways to overcome barriers and secure the realignment needed.
It examines the critical uncertainties that influence the selection, design, procurement, deployment and related financing decisions for climate-compatible infrastructure. Seven areas of critical uncertainties have been identified, focused on the impacts of: (a) climate change itself; (b) shifts in the economic and geopolitical features of globalization; (c) the technological intensification and digitization of infrastructure; (d) new economic, business and financing models such as the shared and circular economy and rentalization; (e) new forms of citizen engagement; (f) changes to the financial system; and (g) economic downturns and external shocks. If you would rather watch a few short videos that explain the briefing without reading it, we won’t judge you. Check them out here, here and here.
In other exciting news, the Financial Centres for Sustainability (FC4S) announced their statement on taxonomies for sustainable finance. A “shared language” for green and sustainable finance is critical for the growth of new markets, and for compatibility and coherence between jurisdictions.
The Network said new definitions, standards and classification systems for sustainable finance should be developed to avoid confusion among policy and regulatory authorities. Several processes to develop “taxonomies” for sustainable finance are currently planned, or already under way – 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. Read the statement here and the accompanying briefing here.
FC4S also launched their new twitter handle so if you are interested, follow them to keep up with their work.
There was to be more exciting news for the FC4S as Michael Bloomberg announced that he would help form a Wall Street group on Sustainable Finance to encourage more climate-friendly and sustainable finance innovation across the U.S. capital markets. The group will be the latest to join the roster of financial centres for sustainability.
And rounding out the FC4S news are a few updates on upcoming meetings. The second FC4S network meeting will be held in Shanghai from 18 to 19 October 2018. We’ll get you updates from it. Also look out for the Climate Innovation Summit from 6 to 8 November 2018, which is being organized in partnership with Sustainable Nation Ireland. The European hub of the FC4S network will be launched by Paschal Donohoe, Minister for Finance of Ireland, at the summit.
And finally, to help you get over the mid-week blues we have two new pieces that came out of the Financing the UN Development System 2018 report a few weeks ago. The first piece talks about unlocking trillions of dollars and better understanding the global financial system and the second piece argues that digitization of finance is key to unlocking the SDGs. For more information and updates on digital work, follow the Sustainable Digital Financial Alliance’s twitter account.