G7 Backs Sustainable Finance Movement to Achieve Climate Goals

(3BL Media/Jutmeans) – Sustainable finance is a rapidly accelerating global movement. Countries from China to France and the UK have launched initiatives to boost flows of private capital for climate and sustainability. The value of investment assets committed to the Principles for Responsible Investment is now over $73 trillion.

The sustainable finance movement has now received a strong endorsement from the G7, which joined the G20 and other countries to extend its support to the growing movement. The G7 environment ministers released a statement after their recent meeting in Italy, which called increased sustainable financing “fundamental” to the achievement of sustainability and climate goals.

The G7 has also pledged continued action on the 2030 Agenda for Sustainable Development, resource efficiency, marine litter, green jobs and climate change. The US supported the final statement, except for the climate action section. According to analysts, the sustainable finance movement can potentially turn trillions of dollars in capital towards green investments.

UN Environment’s Inquiry into the Design of a Sustainable Financial System is a prominent champion of the movement, which seeks to unlock the finance needed to deliver on the goals of the 2030 Agenda for Sustainable Development and the Paris Agreement.

Nick Robins, Co-Director of the Inquiry, said that the G7 nations, which hold the bulk of the world’s financial assets, now have a unique opportunity to quicken the pace of sustainable finance. Robins presented two reports, which outline strategies to ensure Small and Medium Enterprises (SMEs) and financial centers are part of the sustainability solution.

The key task is to improve access to tailored financial services, both for SMEs wishing to improve their sustainability performance and those providing goods and services for the growing green economy. UN Environment’s first report, Mobilizing Sustainable Finance for SMEs, outlined practical ways of making progress.

For example, public finance institutions such as France’s BPI are offering low-interest loans to SMEs to improve energy efficiency. Canada’s BDC has launched venture capital funds for clean-tech innovators. In the US, state-level green banks are crowding in private capital in California, Connecticut, Hawaii, New Jersey, New York and Rhode Island.

In Germany, the GLS Bank has led a financing partnership for green entrepreneurs. The Borsa Italiana is promoting green “mini-bonds”, which enable small businesses to raise capital from investors. Innovations in financial technology can also help through crowd-funding for the green economy.

Source: Climate Action Program