World moves to mobilise green capital

Countries worldwide have made significant progress towards mobilising the trillions of dollars required to make sustainable development a reality, new UN green finance research has revealed.

In 2015, the investment required to bring sustainable development to developing countries fell short by USD 2.5 trillion annually.

Now, promising new research has revealed that smart money is moving to green financing, with more green finance measures introduced since June 2016 compared to any one-year period since 2000.

These are the findings of a UN Environment Inquiry into the Green Finance Progress Report, which is a contribution to the G20’s Green Finance Study Group.

“The world has committed to creating a better future for people and planet. But we will not be able to achieve our sustainable vision without the global financial system using its capital to fuel the transformation,” said head of UN Environment, Erik Solheim, in a statement.

“This new research from UN Environment shows encouraging progress in this regard. From a record number of new green finance measures to ambitious plans for green finance hubs, we are seeing the smart money move to green financing.”

The G20 Green Finance Synthesis Report adopted at the G20 Leaders’ Summit in 2016 detailed seven option to accelerate the mobilisation of green finance. Over the last year, considerable progress has been made with regard to these options by all G20 members and the international community.

The measures have resulted in increased flows of green finance, including in the issuance of green bonds, which grew by around 100 per cent to USD 81 billion in 2016.

Among the country-specific examples of progress are Germany, which announced the intention to make Frankfurt a green finance hub. In China, the State Council unveiled five pilot areas for green finance. Meanwhile, in January 2017, France issued a landmark EUR 7 billion, 22-year sovereign green bond to support the development of the green bond market.

Encouraging positive feedback loops are emerging, according to UN Environment. Increases in the green bond primary market issuance have improved secondary market liquidity, allowing new funds to open and operate. Four new green bond funds launched in the first quarter of 2017.

Photo credit: Deutsche Bank/ CC BY-NC-ND 2.0

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