Breaking News: UNEP Inquiry Shows How to Align Global Finance with Sustainable Development

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Lima,    8    October    2015    –    A    new    UNEP    report    released    at    the    International    Monetary    Fund    (IMF)/World    Bank    Annual    Meetings    shows    how    to    harness    the    assets    of    the    world’s    financial    system    for    sustainability    –    the    key    findings    are    that:    

-­ A    ‘quiet    revolution’    is    underway    as    financial    policymakers    and    regulators    take    steps    to    integrate    sustainable    development    considerations    into    financial    systems    to    make    them    fit    for    the    21st    century.

Momentum    is    building    and    is    largely    driven    by    developing    and    emerging    nations    including    Bangladesh,    Brazil,    China,    Kenya,    and    Peru,    with    developed    country    champions    including    France    and    the    UK.

-­ Amplifying  these    experiences    through    national    and    international    action    could    channel    private    capital    to    finance    the    transition    to    an    inclusive,    green    economy    and    support    the    realization    of    the    Sustainable    Development    Goals.

These    are    the    core    findings    of    a    two-year    Inquiry    by    the    United    Nations    Environment    Programme,    summarized    in    a    new    report,    `The    Financial  System    We    Need.    Commenting    on    the    release:

Achim    Steiner,    UN    Under-­Secretary-­General    and    Executive    Director    of    UNEP    said:    “UNEP’s    Inquiry    has    for    the    first    time    compiled   and    analyzed    inspiring    initiatives    from    across    the    world    that    seek    to    better    align    the    financial    system    with    sustainable    development,    showing    that    there    is    much    to    be    learnt    from    the    developing    world.    We    now    need    to    raise    the    level    of    ambition    and    cooperation    to    ensure    that    the    heartland    of    the    global    economy,    the    financial    system,    can    evolve  to    serve    its    core    purpose    of    growing    and    sustaining    the    real    economy.    UNEP’s    report    opens    a    new    chapter    by    setting    out    how    such    an    evolution    can    be    achieved,”    he    added.

Also    speaking    at    the    launch,    Yi    Gang,    Deputy    Governor    of    the    People’s    Bank    of    China,    said    the    UNEP    Inquiry    report    “delivers    a    vision    of    embedding    sustainable    development    into    the    core    of    financial    and    capital    markets.    It    should    be    a    very    useful    guide    and    reference    for    many    governments,    financial    institutions    and    international    organizations     in    thinking    about    how    to    advance    green    finance.”        Yi    praised    UNEP’s    contribution    to    the    joint    study    with    China’s    central    bank    on    the    country’s    green    financial    system,    and    said    that    “we    have    benefited    significantly    from    UNEP’s    vision    of    sustainable    finance    as    well    as    its    analysis    on    international    experience,”    and    “are    looking  forward    to    continuing    this    partnership    with    UNEP    in    the    future.”

Dr    Atiur    Rahman,    Governor    of    the    Bangladesh    Bank,    and    a    member    of    the    Inquiry`s    Advisory  Council,    speaking    at    the    launch,    said:    “For    the    first    time,    the    Inquiry    has    mapped    the    many    innovations    around    the    world    seeking    to    ensure    that    the    financial    systems    serves    its    purpose    of    financing    inclusive,    green    development”.

John    Lipsky,    former    first    Deputy    Managing    Director    of    the    IMF    and    a    member    of    the     Inquiry`s    Advisory    Council,        “Reforming    the    financial    system    remains    unfinished    business    –    we    have    stabilized    the    system,    but    have    a    long    way    to    go    in    designing    a   financial    system    that    meets    the    needs    of    sustainable    development.    ”

Murilo    Portugal,    the    President    of    Brazil`s    banking    association,    FEBRABAN,    and    a    member    of    the    Inquiry`s    Advisory    Council,    “The    Inquiry    has    catalyzed    awareness    of    the    need    to    align    financial    markets    to    sustainable    development,    and    highlighted    practical    pathways    to    improving    such    an    alignment.”

Naina    Kidwai    –    Chairman,    HSBC    India,    Director,    HSBC    Asia    Pacific,    and    a    member    of    the    Inquiry’s    Advisory    Council,        “Too    often    the    financial    system    and    sustainable    development    have    been    tackled    in    separate    silos.    The    Inquiry    has    shown    for    the    first    time    how    to    systematically    connect    the    dots,    demonstrating    practical     ways    in    which    we    can    mobilise    the    scale    of    capital    needed    in    emerging    markets,    particularly    for    clean    energy    and    clean    water.”

Sharan    Burrow    –    General    Secretary  of    the    International    Trade    Union    Confederation    (ITUC),        “The    UNEP    Inquiry    is    a    valuable    contribution    to    help    reframe    the    financial    system    which    is    essential    for    a    socially    just    transition    to    a    low    carbon    economy.”

Henri    de    Castries,    Chief    Executive    of    AXA,    one    of    over    40    partners    of    the    Inquiry,    “I    welcome    the    Inquiry,    as    only    a    financial    system    with    a    sustainability    orientation    serves    the    economy    and    society,    and    so    provides    a    sound    foundation    for    fostering    the    long-term    orientation    of    finance.”

Rachel    Kyte,    Vice    President    and    Special    Climate    Envoy,    World    Bank    Group:    “The    UNEP    Inquiry    has    uncovered    a    new    generation    of    policy    innovations    that    aim    to    ensure    the    financial    system    serves    the    needs    of    inclusive,    environmentally sustainable,    economic    development.    Its    findings    are    an    important    input    in    advancing    a    new    generation    of    financial    system    reform    and    support    the    delivery    of    our    most    important    sustainability    goals,    and    could    play    an    important    role    for    implementing    the    results    of    the    forthcoming    Paris    climate    talks.”

Anne    Stausboll,    CEO    of    CalPERS:    “At    CalPERS,    sustainability    is    embedded    into    our    investment    beliefs    and    practices.    The    Inquiry    sets    forth    a    framework    for    policymakers    to  incorporate    sustainability    into    the    rules    that    govern    the    financial    system    – an    essential    step    for    long-term    value    creation    and    management    of    multi-­faceted    risks.”

Highlights    from    ‘The    Financial    System    We    Need’    report    from    the    UNEP    Inquiry

The    UNEP    Inquiry    into    the    Design    of    a    Sustainable    Financial    System    was    established    in    January    2014    with    a    mandate    to    advance    policy    options    that    would    improve    the    effectiveness    of    the    financial    system    in    supporting    sustainable    development.        Supported    by    a    high-level    Advisory    Council    of    financial    leaders,    the    Inquiry    has    looked    in-depth    at    practice    in    more    than    15    countries    as    well    as    across    key    segments    of    the    financial    system,    such    as    banking,    bond    and    equity    markets,    institutional    investment,    insurance    as    well    as    monetary    policy.    To    reach    its    findings,    the    Inquiry    has    worked    with    central    banks,    environment    ministries,    international    financial    institutions    as    well    as    major    banks,    stock    exchanges,    pension    funds    and    insurance    companies.

The    Inquiry    has    identified    five    types    of    measures    that    are    being    introduced    by    financial    rule-­makers:

Enhancing    market    practice    through    better    disclosure,    clearer    responsibilities    and    improved    product    criteria.

Harnessing  the    public    balance    sheet,    through    fiscal    incentives,    public    financial    institutions    and    central    bank    action

Directing    finance    through    policy    measures,    such    as    priority    sector    lending,    legal    requirements    and    liability    regimes

Transforming    financial    culture,    through    capacity    building,    reformed    incentives    and    market    structure

Upgrading    system    governance,    through    guiding    principles,    regulatory    mandates    and    performance    measurement.

In    total,    the    Inquiry    found    over    100    measures    that    are    already    in    place,    including:

China,    a    portfolio    of    14    distinct    recommendations    to    advance    China`s    green    financial    system,    covering    information,    legal,    institutional    and    fiscal    measures

France,    new    disclosure    requirements    on   climate    change    have    been    introduced    for    institutional    investors    as    part    of    the    country’s    energy    transition    legislation

Kenya,    has    advanced    financial    inclusion    through    scaling    of   mobile    based    payment    services,    which    is    now    also    supporting    green    financing

Peru,    new    due    diligence    requirements    have    been    introduced    for    banks    to    help    reduce    social    and    environmental    externalities.

USA,    emphasizes    fiscal    measures    to    accelerate    green    finance,    and    had    made    significant    advances    in    disclosure    and    investor    action.

The    Inquiry`s    report    presents    a    Framework    for    Action    that    includes    a    toolbox    of    nearly    40    different    measures,    a    set    of    five    policy    packages    across    banking,    bond    and    equity    markets,    institutional    investors    and    insurance,    and    a    prioritized    set    of    10    next    steps    to    promote    international    financial    cooperation

 

Along    with    The    Financial    System  We    Need,    the    Inquiry    will    also    be    launching    the    ‘Inquiry    Live’    website    which    will    house    a    dedicated    platform    the    body    of    knowledge    and    research    materials    encompassing    the    Inquiry’s    work    over    the    past    20    months.        The    website    will    provide    a    one    stop    shop    to    all    of    the    Inquiry’s    research    materials,    as    well    as    a    dedicated    portal    for    partner    countries    to    enable    communication    and    sharing    of    knowledge.        The    country    portal    will    initially    be    dedicated    to    the    15    countries    where    there    has    been    enhanced    country    engagement.

Twitter:    @unep    @fininquiry

For    more    information,    please    contact:    

Mahenau    Agha,    Head    of    Outreach,    Inquiry    –    [email protected]    – +4179-105-3614    Alejandro    Laguna,    Information    Officer,    Americas    –    [email protected]    -­ +1-­917-­854-­0612    

Shereen    Zorba,    Head    of    News    and    Media    –    [email protected]    – +254-­7313-24535    

Cheryl    Hicks,    Inquiry    Stakeholder    Engagement    –    [email protected]    -­ +4179-­381-4607    

The    report    and    press    kit    are    available    at:    

www.unep.org/inquiry        as    well    as    www.unepinquiry.org

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#greenfinance

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