Sustainability is becoming part of routine practice within financial institutions and regulatory bodies worldwide, according to a new United Nations report. Huge progress has been made on reforming the global financial system over the last four years.
The shift to a sustainable financial system is well under way, with increasing opportunities to align the financial system with sustainable development.
According to the final report of the UN Environment Inquiry into the Design of a Sustainable Financial System, there is widespread acknowledgement of the need for change into a global movement that delivers the finance we require.
“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,” explained Erik Solheim, head of UN Environment, in a statement.
The Inquiry worked with policymakers, international organizations, financial institutions and civil society to help put sustainable finance at the heart of the development debate.
Its findings showed that green bond issuance grew from $11 billion in 2013 to $155 billion in 2017, while divestments in carbon-intensive assets reached an estimated $5 trillion in 2016, compared to investments in coal, oil and gas over the same period of around $710 billion.
There was also a striking growth in international initiatives, such as the G20 Green Finance Study Group (GFSG), co-chaired by China and the UK.
However, the report cautioned 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”.
The Inquiry’s work will continue through programs such as UN Environment, Sustainable Finance at the G20 and coalitions for action.
Photo credit: Daniel Parks/ CC BY-NC 2.0