Date: December 9, 2023Author: Editor, cairnsnews 4 Comments
UN Agenda 30 is on track to reduce world population, shut down agriculture, remove all ‘fossil fuels’
Forecasts suggest investment needs for climate mitigation will quadruple to $2 trillion by 2030 for emerging markets and developing economies.
- There is a need for more expertise to establish the sustainable finance necessary for climate mitigation and consequently, a need to bridge the knowledge gap.
- The World Economic Forum and other organizations have joined the Capacity-building Alliance of Sustainable Investment (CASI) initiative to aid sustainable finance capacity building for emerging markets and developing economies.
As the adverse impact of climate change intensifies, so does the urgency to mobilize sustainable finance and enhance sustainable investments in emerging markets and developing economies.
The International Monetary Fund predicts climate mitigation investment needs will quadruple to $2 trillion by 2030.
Along with massive funding requirements, emerging markets and developing economies often lack a domestic supply of sustainable finance resources, having yet to develop their green taxonomies, sustainability disclosure requirements and green financial products alongside policy incentives for green finance.
Behind this absence is a lack of expertise and talent to establish and operate a sustainable financial system in the Global South, as indicated by the G20 Sustainable Finance Working Group. The working group indicated in its 2023 Sustainable Finance Report that “public authorities in collaboration with private sector actors, research and academic institutions, NGOs, and industrial associations should coordinate amongst themselves to strengthen and synergize the delivery of capacity building for sustainable finance in a manner consistent with national sustainable development plans and priorities.”
Green finance cannot be just a few products. It must be an ecosystem.
Among the elements needed to develop a green financial ecosystem, four prominent topics stood out where capacity building is most needed: robust policy frameworks, including green finance taxonomy and disclosure standards; green financial products; incentive mechanisms; and incubation of local green projects.
For emerging markets and developing economies, a “top-down”, government-driven approach with better policies, incentives, and taxonomies can help shape market behaviour, align the regulatory landscape with sustainability objectives and ultimately boost investor confidence.
In the meantime, green project owners must also be trained to prepare these projects for better bankability and transform the need for green development into reality.
Recognizing these challenges and responding to the G20 call for strengthened global efforts and coordination for capacity building, the World Economic Forum and other partners, in collaboration with the Beijing-based Institute of Finance and Sustainability (IFS), a Chinese green finance think tank, will launch a new initiative called the Capacity-building Alliance of Sustainable Investment (CASI).
Till date, 40 global institutions have committed to join CASI.
Members include the IFS, Silk Road Fund, HSBC, Standard Chartered Bank, the Hong Kong Monetary Authority Infrastructure Financing Facilitation Office, Neuberger Berman, CFA Institute, the World Economic Forum, the Sustainable Banking and Finance Network, the United Nations Development Programme Sustainable Finance Hub, the United Nations Principles for Responsible Investment, World Resources Institute, the International Capital Market Association, Asia Securities Industry & Financial Markets Association, Confederation of Business Industry, Hong Kong Green Finance Association and many others.
CASI’s vision is to train 100,000 sustainable finance specialists for emerging markets and developing economies by 2030, offering face-to-face training programmes in all major continents, including Africa, ASEAN, Central Asia, the Middle East and Latin America, and various e-learning programmes. The target audience of the CASI programmes includes financial regulators and policymakers, senior managers of financial institutions, service providers (such as those offering green verification, carbon accounting and disclosure services) and corporations looking to set up green and bankable projects.
The World Economic Forum – through its Giving to Amplify Earth Action (GAEA) initiative – wants to help mobilize philanthropies, corporations, private finance and government actors to unlock the resources needed to train these 100,000 financial professionals in sustainable finance. From helping accelerate financial deals in renewable energy and re-finance coal retirement plants globally to engineering new innovative financial products for corporations to transition towards sustainability and for new green innovative tech start-ups to reach scale – these are all critical levers that GAEA aims to use to support.
Nelle's journey 