Category: News

Rio de Janeiro/Geneva, Representing Brazil’s public and private sector financial services sector actors, today Brazil’s Laboratory of Financial Innovation (LAB) joined the International Network of Financial Centres for Sustainability (FC4S) to become the network’s first South American member. As the 31^st member of FC4S, LAB joins financial centres who collectively manage 80% of global equity markets, representing $61.3 trillion in equity market capitalization.

“As the largest economy in Latin America, Brazil is an emerging leader in the sustainable finance landscape. Sustainability and specifically sustainable finance is on the cusp of a revolution in the country. LAB is in the vanguard of that change and joining FC4S can be an accelerator. As we prepare for FC4S’s AGM next week (14^th October), this is a welcome development,” said FC4S Co-Chair and Special Advisor to the Chairman of Paris-based Finance for Tomorrow, Pierre Ducret.

Launched in August 2017, (LAB) is a project of the Brazilian Development Association (ABDE), the Inter-American Development Bank (IDB), the Securities and Exchange Commission (CVM) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. It works as a multi-sectoral discussion forum and Its purpose is to promote dialogue between the public and private sectors and to share experience among various agents of the economy.

“By joining the FC4S Network, we look forward to working with the Secretariat and fellow Members to interact, exchange and promote strategic action globally, and in our jurisdiction on green and sustainable finance,” said Jose Alexandre Vasco, Director of the Office of Investor Protection and Assistance (SOI/CVM).

LAB’s objective is to encourage the creation of new green and sustainable products and financial solutions that increase private sector participation in green and sustainable solutions in markets such as energy, water, transportation, agriculture and finance (fintech).

Working with FC4S LAB proposes to go beyond a space of knowledge production and will promote the structuring and piloting of new financial products, using research, analysis and the technical prowess of its participants. To this end, LAB and FC4S will work together to analyze innovative instruments and good local and international practices that can be replicated by the Brazilian financial (public and private) institutions, as well structure solutions that increase the efficiency of the resources of impact investors.

London, 25 September 2020: Efforts to establish a Task Force on Nature-related Financial Disclosures (TNFD) have today passed an important milestone with the announcement of an Informal Working Group (IWG) comprising some of the world’s biggest banks, investors and companies, as well as governments and regulatory bodies.

The 62 members that make up the IWG are part of the initial planning phase of the TNFD, tasked with establishing a detailed work plan for the Task Force for when it launches in 2021.

A TNFD will build awareness and capacity to enable the financial sector to address the market and systemic failures contributing to the destruction of nature. Data gaps currently prevent financial institutions from assessing their nature-related risks, the IWG will be discussing how to bridge this gap, enabling global finance to shift from nature negative to nature positive.

At the Business of Finance Day at the Nature for Life Hub, Bérangère Abba, French Secretary of State, Ministry for Ecological Transition, announced the IWG and its commitments to the creation of a Task Force and an international reporting standard that is critical for halting biodiversity and ecosystem loss.

Bérangère Abba said: “Biodiversity finance is the new frontier of green finance. Nature requires as much ambition and collective effort as it has been done for climate so far, and the private sector can play a crucial part in redirecting financial flows. We are convinced that the work of the Task-force on Nature-related Financial Disclosures, or “TNFD”, will accelerate the understanding of these issues and will ultimately lead to both a reduction in financial flows and economic activities that are harmful to biodiversity and a massive redirection of flows towards activities that are favourable to biodiversity.”

Madeleine Ronquest, Head Environmental, Social and Climate Risk at FirstRand Group Enterprise Risk Management (South Africa), said: “The launch of the Informal Working Group (IWG) for the TNFD is a significant step towards the goal of moving the global financial system from nature negative to nature positive. I look forward to working with the IWG members to shape and implement the Task Force that will help to make this transition possible.”

“Loss of nature is increasingly impacting business performance. Consumers, stakeholders and governments expect business to take actions which halt the loss of nature. WBCSD supports the launch of the TNFD which will help companies consistently and credibly assess, address and report their impacts and dependencies on nature”, added Diane Holdorf, Managing Director & Senior Management Team, World Business Council for Sustainable Development.

The IWG will meet on a monthly basis and will be supported by a Technical Expert Group (TEG), which is currently in the final stages of formation. The TEG will serve at the direction of the IWG and support the working group in articulating the scope and objectives for the TNFD; the group will be made up of individuals with representative expertise and overview of relevant sources for biodiversity data and tools for assessing nature-related investment risk.

 

Partner and Think Tank Quotes

Stephen Nolan, Managing Director of the International Network of Financial Centres for Sustainability says: “As we have learned nature-positive transitions could generate trillions of dollars in business value and as well potentially hundreds of millions of jobs. That could fundamentally reshape the world and the environment we live in for the better. FC4S is proud to be one of the think tanks assisting the Informal Working Group (IWG) to establish the Task Force on Nature-related Financial Disclosures; as we hope to use sustainable finance to catalyse nature-positive outcomes, in alignment with the UNFCCC Paris Agreement, the CBD Post-2020 Global Biodiversity Targets and the UN Sustainable Development Goals.”

Andrew Mitchell, a Founder and Senior Advisor to Global Canopy commented: “The creation of a TNFD is hugely important as it will lead to new ways of identifying, valuing and reporting on nature-related risks, as well as identifying new economic opportunities to protect and restore the natural world on which we depend, which is more pressing than ever. To have the commitment of these heavyweight companies joining the IWG is a great start in this initiative.”

Midori Paxton, Head of Ecosystems and Biodiversity, UNDP says, “Changing flows of money from nature negative to nature positive is a fundamental ingredient in shifting global systems towards protecting and nurturing nature. Nature underpins world’s businesses. We desperately need nature – for air, water, food and for our health, inspiration, jobs, livelihoods and for achieving the Sustainable Development Goals. Financial institutions and businesses have a critical key to protect nature. If we protect nature, it will pay us back with significant financial and material dividends.”

Eric Usher, Head of UN Environment Programme Finance Initiative said: “An increasing number of financial institutions are stepping forward to address the twin crises of climate change and the loss of nature, and the strong appetite for a TNFD is further evidence of this momentum. Standardising nature-related disclosures will bring much needed efficiencies and transparency to financial markets.”

Margaret Kuhlow, Finance Practice Lead and Interim Conservation Director, WWF International said: “Habitat loss and degradation including deforestation that is largely driven by the way we produce and consume food are rapidly undermining the natural systems on which our economies and our own health rely. Nature loss is a source of systemic risk and instability for markets and the financial system but is largely ignored in corporate and financial decision-making, regulation, and supervision. Our economic behavior has assumed the services that healthy natural systems provide, and on which our economies have been built, are infinite. They aren’t. We are pleased to welcome this collaboration with financial institutions, governments, and other experts to establish the TNFD as a vehicle to shift finance away from destructive activities and toward a nature-positive economy.”

A framework that sets out the response of the global financial system to the Covid-19 pandemic and its impact on sustainable finance has been presented at the China International Fair for Trade in Services (CIFTIS), which started on September 4 in Beijing.

The UN hosted Financial Centres for Sustainability (FC4S) Network presented the findings of its Covid-19 report that outlines an initial framework for response strategies and the implications for global sustainable finance.

last year Beijing became the 26th member of the FC4S network which commits the world’s financial centres to working together in support of the Paris Agreement and the UN Sustainable Development Goals. Now at 30 members, FC4S members collectively represent 80% of the global equity market and $61.3 trillion in global equity market capitalisation.

The Beijing municipal government has outlined a blueprint to position Beijing as an international green finance centre and the CIFTIS 2020 offers an opportunity for FC4S to support the progress of critical Chinese initiatives that match this ambition.

These include Beijing to support FC4S setting up a local office, coordinating with FC4S Secretariat and network members in the Asia Pacific region; establishment of capacity building platform for global FC4S members; and facilitation of key policy dialogues at regional and international level.

Commenting, FC4S Managing Director Mr. Stephen Nolan said FC4S was looking forward to presenting its Covid-19 report with the support of Beijing:

“CIFTIS 2020 offers a wonderful platform to showcase the role of the world’s financial service sector in expanding economic opportunities through a more inclusive, sustainable financial system as well as underlining China’s own progress in this space. Presenting our Covid-19 report findings at such a key event, allows FC4S to highlight collective actions which all FC4S members, partners and potential partners can take, with Beijing taking a leadership role in support of the green finance agenda.

And as an important member of the FC4S network, Beijing is well-positioned to promote green finance and is already playing a significant role in this area. As we build back better, Beijing has the advantage of direct policy support, strong financial resources, and deep human capital to support the expansion of green and sustainable financial markets.”

Commenting, Bureau Chief of Beijing Local Financial Supervision and Administration said:

“As a proud member of the FC4S network, we are pleased that FC4S is presenting the findings of its important Covid-19 and sustainable finance paper in Beijing during the China International Fair for Trade in Services (CIFTIS). Beijing Finance Bureau is delighted to support FC4S promote how global financial centres can contribute to sustainable development, in particular in the context of the global pandemic.

Taking this opportunity of report launch, Beijing will further deepen the comprehensive cooperation with FC4S, and also leverage the capital’s resources and platforms to facilitate policy exchanges and dialogues at the city level of green financial centers, promote business exchanges in ESG development, green financial product innovation, green finance certification and standards, etc. All of these activities aim to promote the capacity for sustainable development of the global financial industry.

Beijing plays a key national and international role in supporting capital markets align themselves with the green finance agenda. And with Beijing home to more than 800 licensed corporate financial institution headquarters, Beijing is rapidly emerging at the centre of China’s green finance policy and the birthplace of several important global green finance initiatives. Indeed, the first domestic green corporate bonds, the first renewable green corporate bonds, and the first green asset-backed notes (ABN) were all issued by Beijing companies.”

Beijing is one of eight FC4S members in Asia, with Hong Kong, Seoul, Shanghai, Shenzhen, Tokyo, Abu Dhabi and Astana on board.

Read the full FC4S report that was presented in Beijing here.

Tracking the progress of FC4S members as they accelerate local efforts to mainstream green and sustainable finance is a key objective of the FC4S global network. Given this, in 2018 FC4S and knowledge partners developed the FC4S assessment programme.

At a high-level, the objectives of the FC4S assessment programme are to provide respondents with a level of alignment, labelled from 0 to 5 on our Sustainable Finance Scale (SFS) which assesses the progress of the green and sustainable finance agenda within member centres, the degree of capital provision in support low-carbon transition, alignment to the Paris Agreement and the achievement of the UN SDGs.

In addition, this framework enables FC4S members to evaluate how their own institutional strategies and broader financial and capital markets are aligned with the objectives of a sustainable financial system.

Now in its third year and following members input at the FC4S Q4 2019 AGM in Geneva, the FC4S assessment programme has recently been updated with the support of PwC, knowledge partners the Institute for Climate Economics (I4CE) and the UNDP Finance Sector Hub, along with a small working group of members including London, Paris, Frankfurt, Dublin, Shenzhen and Guernsey.

As per previous years, aggregate results will be shared with members during at the 2020 FC4S AGM.

Afterwards, the FC4S Secretariat will work with its knowledge partners to develop a public report summarizing the findings of the report. To be published in Q4 2020, this report will draw upon information gathered through the survey process, as well as other sources of data, which combined will highlight the critical role of financial centres in accelerating the green and sustainable finance agenda, not least as we build back better from the COVID-19 pandemic.

Separately and for the first time, the FC4S Secretariat will also produce an individual report analyzing each centre’s progress as per the sustainable finance scale, a possible pathway to move up a level in 2021 and how best the FC4S Secretariat and partners can assist in achieving.

The development and recent update to the FC4S assessment programme is supported by EIT Climate-KIC, a key partner of FC4S.

The Central Bank of Mexico (Banco de México), the UN Environment Programme (UNEP) and the United Nations Development Programme (UNDP) call on the Mexican financial sector to frame and implement an agenda on environmental risk.

Mexico City, 19 May 2020 – Today, Banco de México and the United Nations Environment Programme (UNEP), with the support of the United Nations Development Programme (UNDP), presented the report “Climate and environmental risks and opportunities in Mexico’s financial system: From diagnosis to action,” which calls upon Mexican financial institutions to make a collective effort to incorporate environmental issues into their risk assessment and corporate governance strategies, as well as to take advantage of the opportunities that would result from the transition to a low-carbon economy.

The report highlights that climate change and environmental degradation are critical challenges of our time, as they lead to loss of natural capital, ecosystem degradation, lower productivity, and a reduction of the population’s well-being, at both the national and global level.

As part of the Network for Greening the Financial System (NGFS), the central banks along with other financial authorities have become more involved in initiatives geared towards encouraging financial institutions to accurately acknowledge and assess the impact of environmental risks, in view that such phenomena can have significant consequences on credit risk, financial stability, and social development.

This publication is a first in-depth diagnosis of the current degree of readiness of Mexican financial institutions to assess climate, environmental, and social risks. The results are based on a survey conducted on the senior management of over 60 institutions and consider nearly 90% of the credit portfolio of the banking system, 80% of the assets reported by fund managers to Mexico’s National Securities and Banking Commission (CNBV), 90% of the assets managed by the Retirement Funds Administrators (AFORES), and 44% of the assets reported by insurance companies.

When talking about this initiative the Governor of Banco de México, Alejandro Díaz de León, highlighted the importance of collective action of all the actors of the financial system. He also expressed his confidence that the report will serve as the basis for the development and implementation of standardized methodologies and criteria in the evaluation of environmental and social risks, which are essential for long-term prosperity.

“It is clear that we need to manage risk far better than we currently do, and this becomes more vital in the context of climate change which remains the existential challenge facing humanity. Financial institutions that sufficiently factor in climate risk, will be able to ensure the long-term sustainability of their portfolios. This study offers useful recommendations for financial institutions and regulators in preparing for the future,” said Inger Andersen, Executive Director of UNEP.

According to the report, although Mexican financial institutions have become more aware of climate risks, they are still required to integrate more systematic and standardized measures, implement the international agenda, and develop methodologies and areas of responsibility within their own corporate governance structures. In this regard, it draws upon implementing specific actions to mitigate environmental risks and increase green financing flows to the Mexican economy, such as:

• Defining a national taxonomy for green and sustainable activities,
  setting clear timelines and corporate governance commitments by financial system actors to improve and monitor climate risk management,
• Designing the incentives to incorporate environmental-related factors to firms’ strategic planning, and
  developing voluntary reporting standards for Mexican firms.
• “Climate change and environmental degradation are critical challenges of our time, and the financial sector has a key role to play in tackling these issues. The recommendations of this report – such as clear timelines and commitments at the board level to incorporate social and environmental aspects into major plans of action, risk management policies, annual budgets, and business plans – will hopefully resonate with decision makers at the highest levels of the Mexican financial sector,” said Achim Steiner, Administrator, UNDP.

New York/Geneva, 7 May 2020 – New York/Geneva, 7 May 2020 – Today the International Network of Financial Centres for Sustainability (FC4S) launched a working paper on the implications of the COVID-19 pandemic on sustainable finance. The paper supports thinking on how to respond to the pandemic from a sustainable finance perspective. Specifically, it has two objectives.

The first is to set out what we know about the ways in which the many different components of our sustainable financial system – market actors, policymakers, regulators, and international institutions – are thinking, planning and reacting to the pandemic, with a focus on implications for sustainable finance markets.

The second objective is to set out a framework for assessing what levers may exist to strengthen the role of the financial system in supporting a low-carbon recovery, and the prospective roles for different communities of actors.

Importantly, the paper it is a work in progress and will be updated and refined every quarter as new information and new ideas come to our attention. This allows us to continuously gather information and insights to refine our analysis as we try to be as fluid as the global response to the pandemic is.

The working paper looks at four major sections: Financial and Capital Markets; Policy Action; Regulation and Supervision; and International Networks covering recent developments in response to COVID-19.

“If there is one thing that COVID-19 has emphasized, it is that natural capital underpins our economies. The health of people and the planet are one and the same. The 90% decline in green bond issuance is a matter of concern. If we aim to rebuild more green and resilient economies, we need to maintain healthy debt ratios and encourage all debt to be aligned with the Sustainable Development Goals,” said Marcos Mancini, Head of International Partnerships, UNEP Inquiry.

Some takeaways from the report include:

• Pipelines of new greenfield low-carbon projects (e.g. renewable energy) are likely to be significantly reduced for the foreseeable future, both in developed and emerging markets.
• Capital raising to fund the stimulus will need to take many forms – and green securities could play a major role.
• Financial supervisors are likely to strengthen focus on long-term risks with exponential characteristics – potentially leading to a more granular assessment of climate risks.

Mexico City, 31 July 2019 –Mexico’s Green Finance Advisory Board (CCFV) today joined the International Network of Financial Centres for Sustainability (FC4S) as it looks to help turn the Latin American nation into a regional green finance powerhouse.
The CCFV is the 28th member of the UN Environment Programme-convened movement to put private capital behind green investments. FC4S already boasts some of the world’s major financial centres as members.

“We are excited to have the opportunity to be part of the FC4S, and to work alongside them to reach our common goal to become a greener and more transparent financial system,” said Luis Sebastián Sayeg Seade, co-President of the CCFV and head of pension fund Afore Banamex.

“We are enthusiastic to become greener, because we know greener means challenging the status quo, while following global standards to improve every day. This benefits investors, the financial sector and, most importantly, local economies, the environment and the Mexican population.”

The advisory board, representing over 300 members, was created in 2016 in response to the growing need in Mexico to develop a sustainable financial market with an authentic long-term vision. The CCFV is particularly concerned about Mexico’s vulnerability to the impacts of climate change. Located between two oceans, it is exposed to storms and sea-level rise. The CCFV says 71 per cent of the country’s economy is vulnerable to climate-related disasters.

“The CCFV has brought together leaders that represent the financial system in order to share learning on how we can take action to manage and minimize climate and social risks,” said Enrique Ernesto Solórzano Palacio, co-President of the CCFV and pension fund manager Afore Sura CEO.

“We must work harder on taxonomies, improve data disclosure and the identification of sustainable and green infrastructure pipeline, and exercise pressure for the decarbonization of the companies that come to public markets to obtain funding.”

Beijing, Cairo, Lagos, Madrid and Tokyo have all recently joined FC4S in a surge of support for sustainable finance in line with growing global awareness of the urgent environmental challenges the planet faces.

The addition of the CCFV is particularly significant, given the size of the country’s economy. Mexico is currently ranked as the 15th largest world economy in terms of GDP, and 11th in terms of its purchasing power.
Since the Mexican Congress in 2012 approved the Climate Change General Law, green finance has been growing in Mexico. In 2015, national development bank NAFIN issued its first green bond – the first certified green bond in Latin America.

In 2016, with the formation of the CCFV, the pace picked up as the CCFV developed a green finance agenda – incorporating the financial system´s associations, development and multilateral banks, investment bankers, asset managers, rating agencies, and non-governmental organizations.

In 2017, Mexico City placed its first green bond, becoming the first Latin American City to obtain financing through this instrument. There have been other important advances and key signals to the market around green finance. For example, the National Commission of the Savings System for Retirement, the regulatory body of the Retirement Funds, encouraged the integration of ESG (Environmental, Social and Governance) concerns in investment decision-making. By December 2018, 51 institutional investors – who jointly manage USD 237 billion in assets, declared themselves in favor of the disclosure of ESG information in cooperation with the CCFV.

Less than a year after Mexico City’s first green bond, the Central Banks and Supervisors Network for Greening the Financial System (NGFS) was launched. This network is steered by Banco de Mexico, the Bank of England, the Banque de France and Autorité de Contrôle Prudentiel et de Résolution (ACPR), the Nederlandsche Bank, the Deutsche Bundesbank, Finansinspektionen (The Swedish FSA), the Monetary Authority of Singapore, the People’s Bank of China and Banco de España and has 42 members along with 8 observers.

“We are delighted to have the CCFV join our network,” said Stephen Nolan, head of FC4S. “They have already done stellar work promoting green and sustainable finance in Mexico. We hope to help them advance the agenda further in the region, while also learning from the many valuable steps they have taken to green Mexico’s financial system.”

Beijing, 05 June 2019 –Beijing today became a member of the UN Environment Program-convened Financial Centres for Sustainability (FC4S) Network, a rapidly growing movement of financial centres committed to putting private capital behind climate friendly and green investments.

Beijing is the 25th member of FC4S, following hot on the heels of Lagos and Tokyo, both of which joined in the last few weeks.

“We are thrilled to announce that Beijing has joined the FC4S,” said Ma Jun, President of Beijing Green Finance Association (BGFA). “As the political, economic, and cultural centre of China, Beijing has the advantage of direct policy support, robust financial resources, and strong human capital to support the expansion of green and sustainable financial markets.

The BGFA is seeking to position Beijing as an international green finance centre. The city is planning to launch a number of critical initiatives, including the establishment of the Beijing Green Development Fund, China-UK Green Technology Innovation Fund, and a Green Assets Exchange.

“I am delighted to welcome Beijing to the FC4S family as our 26th member,” said Kong Wei, co-chair of the FC4S and Convenor of the Lujiazui Financial City Green Finance Committee in Shanghai. “With significant capital required over the coming years to finance Asia’s transition to a low-carbon economic region, Beijing’s recognition of the importance of the green and sustainable finance agenda is to be welcomed. I look forward to working with our latest member to support their efforts.”

Beijing’s admission brings the FC4S Network to six members in Asia, with Hong Kong, Seoul, Shanghai, Shenzhen and Tokyo already on board. FC4S is developing a dedicated strategy for sustainable finance in Asia under its FC4S Asia and Pacific platform.

“By joining the FC4S Network, Beijing hopes to actively participate in knowledge exchange with our international counterparts and contribute valuable experiences and drive innovation on policies, product development, and harmonization of standards, with the vision to build a more sustainable financial system globally,” said Ma Jun.

Beijing joined the network on World Environment Day, which this year is themed around the fight against air pollution. The Beijing air pollution crisis in 2013, which led the city and the government to launch series efforts to improve air quality and protect the human health, helped to spark the growth of green finance as a way to deal with environmental issues.

“It is fitting that Beijing has joined FC4S on World Environment Day,” said Satya S. Tripathi, UN Assistant Secretary-General and Secretary of the UN Environment Management Group. “Investments that move away from fossil fuels and other polluting industries, towards green and sustainable ones, are crucial to help address the global challenge of air pollution. Beijing will be a significant player in this space in the years to come. ”

The UN Environment convened Financial Centers for Sustainability (FC4S) Network has today published a report which has for the first time measured the contribution of financial centres to sustainable development and the ongoing low-carbon transition.The 2019 State of Play report also identifies key challenges facing this growing sector.

Over the past three years, sustainable finance has become a mainstream aspect of financial market growth and innovation around the world – as evinced by growth in issuance of green bonds, proliferation of sustainable investment products, increasing volume of assets managed according to increasingly stringent sustainability criteria, new green banking and insurance offerings, and a step-change in disclosure and reporting of environmental information – including climate risks.

Established in September 2017, the FC4S Network provides a platform for financial centres to exchange experience and develop practical collaboration for the growth of green and sustainable finance. As of March 2019, the Network has seen a doubling in membership since its launch, attracting 22 financial centers as members from across Europe, Asia, Africa, and North America.

In 2018, supported by EU EIT Climate-KIC the FC4S Network established an Assessment Programme to track the progress of financial centre efforts to support the expansion of green and sustainable finance markets, and explore different ways of measuring the contribution of financial centres to sustainable development and the low-carbon transition.
The FC4S report findings were released in Brussels today during the European Commission’s High-Level Conference on Sustainable Finance, a key gathering of over 600 political, regulatory, policy and market actors to celebrate the one-year launch anniversary of the EU’s Action Plan for Financing Sustainable Growth.

Commenting, FC4S co-chair Pierre Ducret, Board member Paris Finance for Tomorrow, said: This report illustrates that financial centres have a critical role to play in accelerating the transition towards a sustainable financial system. FC4S is committed to helping them by supporting and assessing their initiatives and achievements, measuring their progress, and mobilising necessary skillsets. The network will also contribute to connect actions in Financial centres with global policy initiatives, such as that led by the European Commission.”

Results of the pilot Assessment Programme survey illustrate that:

New forms of public private partnership: Nearly two-thirds of financial centre initiatives on green and sustainable finance are partnerships between the private and public sectors, giving them unique ability to link policy and practice.

There are material barriers to growth: The top three barriers faced by financial centres are i) a lack of green financial products, ii) inconsistent standards and iii) insufficient market demand. Lack of a shared language for green and sustainable finance is a key constraint, highlighting the need for continued dialogue between public and private stakeholders on taxonomies.

Financial centres are going beyond climate: Climate change continues to be a major focus for activities branded as “sustainable” but FC4S members recognize need to broaden their offering to include other environmental priorities (e.g. circular economy, natural capital and conservation finance) as well as social themes, such as financial inclusion and social impact investing

Policy innovation is a key driver: New policy initiatives and action by financial regulators and supervisors is a key driver in half the financial centres, with system-wide initiatives and debt capital markets the most cited examples. In a quarter of centres, policy and regulation is touching upon equity and debt capital markets, insurance, investment, banking and system-wide action.

New instruments are proliferating: Over 75% of financial centres noted the presence of different debt instruments related to green and/or sustainable finance – primarily green bonds. Equity instruments are on the rise, with 25 % of respondents noting the presence of structured products, closed ended funds, and discretionary mandates.

Progress varies across sectors: Investment and asset management is the most mature sector with respect to green and sustainable finance in most centres, while green banking is evolving, and insurance has the furthest to go.

Professional services are growing rapidly: Over 75% of respondents acknowledged the presence of sustainable rating services and consulting firms; other services (sustainability research, labelling, legal, clean techs and carbon trading) are present in select financial centres.

Shared priorities for Future Action: Leading financial centres have identified further product development, improved data collection and better market standards as top priorities for further development.

Focus on Innovation: Applying financial technology (fintech) solutions to sustainable finance challenges is a major focus for financial centres, with several FC4S members establishing specific projects aimed at fostering innovation – including accelerator programmes.

Increasing international collaboration: FC4S member centres are working more closely together on sustainable finance, including through bilateral projects. More and more centres are seeking to join the FC4S Network to benefit from collaboration opportunities.

Commenting, FC4S co-chair Kong Wei, Convener, Shanghai Lujiazui Financial City Green Finance Development Committee, said: “This assessment provides highly valuable insights into the scale and purpose of sustainable and green finance activity in our member’s centres. There have been tremendously positive strides taken but much remains to be done. This year the FC4S Network will revise the Assessment Programme methodology to target more complex and diversified questions relating to green and sustainable finance – and start to build the necessary data history to measure progress over time.”

Valdis Dombrovskis, Vice President European Commission, said: “Global financial centres can help scale up sustainable finance and mobilise international investors towards sustainable investments across the globe. I welcome the first report of the UN Financial Centres For Sustainability (FC4S) Network, which for the first time assesses the contribution of financial centres to sustainable development. We need to build global cooperation to coordinate an international approach to sustainable finance that avoids fragmentation and greenwashing.”

London, 05 March 2019 – Climate Bonds Initiative and the UN Environment Financial Centres for Sustainability (FC4S) Network today release “Green Bonds – a key tool for financial centre competitiveness: Lessons from Europe” Briefing Paper. Analysing the recent experience of European financial centres around green bonds growth, this briefing paper provides insights on how green finance can be leveraged as a core pillar of sustainable financial centres.

Supported by EU EIT Climate-KIC, this paper was developed as part of the UN Environment FC4S Network regional European platform.

Europe hosts several financial centres that together form the largest regional green bond market with a cumulative USD184.2bn worth of green bonds issued to date, with France leading issuance, followed by Germany, Netherlands, Sweden and Spain.

The Paper devotes an extensive section to in-country experiences around green finance instruments, with the objective to bring clarity and convergence on definitions, taxonomies and classification system. It also identifies building skills and capacity through peer exchange as strategic action points for the FC4S Network.

The paper notes various sustainable finance initiatives already undertaken by European financial centres and makes recommendations for financial centre authorities to foster the development of green bond markets as an integral part of the sustainable finance planning including:

• Supporting the development of guidance for green financial instruments;
• Developing new market infrastructure;
• Implementing best practice on disclosure around sustainable investments.

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Stephen Nolan, Managing Director of UN Environment FC4S:

“As we relentlessly work to accelerate the growth of green and sustainable finance at a financial centre level, the publication of today’s report is to be welcomed. Providing a strong roadmap for further action, the UN Environment FC4S European platform looks forward to working with the Climate Bonds Initiative, our European located partners and EU EIT Climate-KIC to realise these important recommendations.”

Sara Lovisolo, Co-chair, Italian Financial Centre for Sustainability, Italian Observatory on Sustainable Finance (OIFS):

“Sustainable financial centres, as platforms for collaboration, can bring additionality to green bond markets by removing barriers to issuance in green format and creating a strong link between financial markets and public policy targets. We welcome the recommendations of this report, which align with the mission of the Italian Observatory on Sustainable Finance.”

Sean Kidney, CEO of Climate Bonds Initiative:

“The sustainable finance centres of the future will include large green bond segments and be hubs for green investment markets and innovation around climate finance. The report’s recommendations provide a basis for European financial centres making this much needed shift and reflects the significant role of the UN Environment FC4S Network in facilitating this process.”

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Notes for Journalists
About the “Green Bonds – a key tool for financial centre competitiveness: Lessons from Europe” Briefing Paper: The document can be downloaded here

About Climate Bonds Initiative: The Climate Bonds Initiative is an investor-focused not-for-profit, promoting large-scale investment in the low-carbon economy.  It undertakes advocacy and outreach to inform and stimulate green bond markets, provides policy models and government advice, international development programs, market data and analysis and administers the Standards & Certification Scheme. For more information, please visit .

About UN Environment FC4S Network: Launched in 2018, the Financial Centres for Sustainability (FC4S) Network is structured as a partnership between international financial centres and the UN Environment Programme, which acts as its Convenor and Secretariat. The objective of the Network is to exchange experiences and take common action on shared priorities to accelerate the expansion of green and sustainable finance. Today the Network has 22 financial centres members across Asia, Europe, North America, the Gulf and Africa. For more information, please visit www.fc4s.org.