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UN, World Bank lay out roadmap for sustainable financial system

14 November 2017 | updated 14 November 2017

Bonn – The UN’s environment agency and the World Bank have presented a roadmap that lays out how governments and the private sector can design a sustainable global financial system. The next 24 months will be crucial for building on existing initiatives and financing sustainable development.

In recent years, considerable efforts have been made at the national and international level to address different aspects of sustainable and green finance. For instance, nearly 300 policy and regulatory measures targeting sustainability were in place in over 60 countries as of October 2017, with growth in measures averaging some 20 per cent year on year since 2017.

And according to a 2016 survey by the International Finance Corporation, over 60 per cent of the 135 respondents were active in financing climate-related and green projects. Green bond issuances reached $80 billion in 2016, almost double the total issued in 2015.

Other examples include: the Sustainable Stock Exchanges Initiative, which now includes over 60 stock exchanges representing more than 70 per cent of listed equity markets and 30,000 companies with a market capitalization of over $55 trillion; the Sustainable Banking Network and UN Environment Finance Initiative, which are supporting private and public finance institutions integrate environmental and social risks and opportunities into their business models; and the Casablanca Statement, backed by 11 of the world’s leading financial centres this past September to create a global network that will further international cooperation on climate change and sustainable development. 

But according to Simon Zadek, co-director of the UN Environment Inquiry into the Design of a Sustainable Financial System, more needs to be done to convert leading edge practice into systemic change. 

“Mainstreaming the alignment of the global financial system with sustainable development has to move beyond marginal innovations and shape the system’s underlying architecture,” Zadek said in a statement

With this in mind, UN Environment and the World Bank presented a roadmap on Monday at the latest rounds of climate talks in Bonn, which sets out how to create a financial system that integrates sustainability into its everyday operations. The roadmap proposes an integrated approach that can be used by all financial sector stakeholders, bringing policy cohesiveness across ministries, central banks, financial regulators, and private financial sector participants.

“The financial system has enormous transformative power, and has the potential to serve as an engine for the global economy’s transition to sustainable development,” said UN Environment head Erik Solheim. “The roadmap tells us who needs to do what, and when, for this to happen. Here we can see the very real potential to improve the lives of billions of people around the world.”