“Ethical Markets highly recommends this report “ MAKING WAVES” the culmination of the important work of the UNEP Inquiry on Design of Sustainable Finance over the past four years. This crucial work has made great strides in engaging with traditional financial centers and helping overhaul outdated economic models which still drive too many investment decisions. We were honored to contribute a paper on “Reforming Electronic Markets & Trading“ now at www.ethicalmarkets.com along with our “ FINTECH: Good & Bad News for Sustainable Finance“. Check out www.unepinquiry.org where all the Inquiry’s ground-breaking research is available. Congratulations to the Inquiry and its global Team! ~Hazel Henderson, Editor“
Today we are delighted to announce the launch of the Inquiry’s final global report Making Waves: Aligning the Financial System with Sustainable Development. The report is a culmination of four years of research and insight. In it we have found that sustainability is now becoming part of routine practice within financial institutions and regulatory bodies, but as we have said many times over, this is simply the start.
Huge progress on reforming the global financial system over the last four years has started to deliver desperately needed financing for sustainability and set up the next wave of action.
However, our report cautions that current financial flows are still nowhere near enough to deliver the trillions of dollars needed each year to finance the Sustainable Development Goals and the Paris Agreement.
“Over the four years of the Inquiry’s operations, we have seen reform of the global financial system gather pace as banks, investors and regulators realize they must step up – not just to protect people and the planet, but their bottom lines,” said Erik Solheim, head of UN Environment.
“This is hugely encouraging, but we now have to turn widespread acknowledgement of the need for change into a global movement that delivers the finance we require to provide a better future for everyone.”
Although our report finds that capital is beginning to flow to the new economy, it cautions that far more is continuing to support the old economy.
“Making Waves shows that systemic change is possible, in this case in how global finance aligns to sustainable development,” said Simon Zadek, Co-Director of the Inquiry. “It also reminds us that this is unfinished business – we need more waves of action to deliver the timely scale of changes needed to get the job done.”
However, the engagement of increasingly influential players, the growth of powerful coalitions that support collaborative action, the shifting focus towards areas such as digital finance, the roles of rating agencies, and key policy platforms such as the G20 all point to further action.
“Most of the initiatives that are now underway to accelerate sustainable finance, whether by central banks, pension funds, credit rating agencies or insurance companies, would have been simply unthinkable when the Inquiry started back in 2014,” said Nick Robins, Co-Director of the Inquiry. “This should us give us confidence that we can achieve the alignment of the financial system with sustainable development.”
The next phase in sustainable finance will be about making the shift from acknowledgement to alignment. It will be multidimensional and non-linear. It will involve new, better ways of doing finance. It will require new performance metrics for the financial system, ones that measure the extent to which sustainability is really part of the process of finance as well as its outcomes.
Although the Inquiry fulfilled its mandate in March 2018, its work to catalyse change will continue through UN Environment, Sustainable Finance at the G20, coalitions for actions such as the Network of Financial Centres for Sustainability, the Sustainable Digital Finance Alliance and the Sustainable Insurance Forum.
Similarly, country-specific work will increasingly involve other parts of the United Nations system, partly catalysed by the support provided by the Inquiry to the UN Secretary-General’s leadership in championing sustainable finance.