Unep inquiry presentation november 2015
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Transcript of Unep inquiry presentation november 2015
The Financial System We Need
Aligning the financial system with sustainable
developmentPRESENTER
November 2015"UNEP's Inquiry has for the first time compiled and analyzed inspiring
initiatives from across the world that seek to better align the financial system with sustainable development. "
Achim Steiner, UN Under-Secretary-General & Executive Director, UNEP
© UNEP INQUIRY NOVEMBER 2015
UNEP CONVENES FINANCIAL COMMUNITY IMF/WORLD BANK ANNUAL MEETINGS
Lima, 8th October 2015
Mark Carney, Governor, Bank of England Atiur Rahman, Governor, Bangladesh Bank
Yi Gang, Deputy Governor, People`s Bank of China
“Green finance cannot be a niche”
“Developing economy central banks have been trying to address the risks of instabilities and imbalances at sources, by promoting sustainable financing”
“China will advance green finance during its presidency of the G20 in 2016”
SLIIDE 2
© UNEP INQUIRY NOVEMBER 2015
Annual global investmentAll needs to be green and resilient
US$16
trillion
Annual investment needed for sustainable development goals e.g. in infrastructure, energy, agriculture
US$5-7trillion
US$7 trillion
Annual environmental externalities – need to be costed into decision making
US$6 trillion
Reduction in fossil fuel and power investment need (2015-2030)
FINANCING CHALLENGES (ILLUSTRATIVE)TOO MUCH OF THIS
NOT ENOUGH OF THIS
“Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons of environmental deterioration.”
Pope Francis
Advance policy options to improve the financial system’s alignment with sustainable development
MANDATE AND PROBLEM STATEMENT
SLIIDE 3
© UNEP INQUIRY NOVEMBER 2015[Source Inquiry, 2015]
Financial development
ImpactEconomic
Social
Environment
Home country
Global
Low financial development a
limiting factor on economic growth
& social development
Financial development
supports growth & social
development but erodes local environment
Financial development detracts from
growth & social welfare, drives
global environmental
damage
Developed Developing Emerging
A VIEW ON THE PROBLEM: MISALIGNMENT
SLIIDE 4
© UNEP INQUIRY NOVEMBER 2015
Rachel Kyte
Group Vice President, World Bank
DavidPitt-
Watson
Co-Chair UNEPFI
Atiur Rahman
Governor, Central Bank of
Bangladesh
Murilo Portugal
President, Brazilian Bankers
Federation
Neeraj Sahaj
Former President, S&P Rating Services
Rick Samans
Managing Director
WEF
Maria Kiwanuka
Minister of Finance,
Government of Uganda
Andrew Sheng
Distinguished Fellow,
Fung Global Institute
Naina Kidwai
Group General Manager &
Country Head, HSBC India
Lord Adair Turner
Former Chair, Financial Services
Authority, UK
Jean-Pierre Landau
Former Deputy Governor, Banque de
France
John Lipsky
Former Deputy Managing
Director, IMF
Anne Stausboll
CEO, CalPERS
Nicky Newton-
KingChief
Executive, Johannesburg
Stock Exchange
Bruno Oberle
State Secretary & Director of Swiss Federal Office for the Environment
ADVISORY COUNCIL
Kathy Bardswick
CEO, The Cooperators,
Canada
WISE COUNSEL
SLIIDE 5
© UNEP INQUIRY NOVEMBER 2015
Finance can be aligned to
sustainability….
…innovations have been tested ….
… and now need to be developed into a systemic approach.
Naina Kidwai, Chairman, HSBC India, Director, HSBC Asia Pacific
The Advisory Council sees the Inquiry’s global report not as the end of a process, but as alaunch pad for the continued analysis and action….
"Too often the financial system & sustainable development have been tackled in separate silos. The Inquiry has shown for the first time how to systematically connect the dots”
“The Inquiry has uncovered a new generation of policy innovations that aim to ensure the financial system serves the needs of inclusive, environmentally-sustainable, economic development”
“Reforming the financial system remains unfinished business - we have stabilized the system, but have a long way to go in meeting the needs of sustainable development”
Rachel Kyte, VP & Special Climate Envoy, World Bank Group
John Lipsky, former first Deputy Managing Director of the IMF
INSIGHTS FOR ACTION
SLIIDE 6
Kenya Bankers AssociationCentral BankIFC
ChinaPeople’s Bank of ChinaDevelopment Research Centre, IISD
South AfricaBankers AssociationGlobal Green Growth InstituteJohannesburg Stock Exchange
BrazilBankers FederationFundação Getulio Vargas
Bangladesh Bangladesh Bank, Council on Economic Policies
US CalPERS,
SAIS
ColombiaMinistry of FinanceIFC
Indonesia Financial Services Authority (OJK)IFC, ASRIA
IndiaFICCI, NIPFP
Switzerland Federal Office of Environment, SwissRe
Netherlands Ministry of Environment Utrecht Sustainable Finance Lab
France 2 Degrees Initiative, France Strategie, I4CE
Canada The Cooperators, CIGI
[Source Inquiry, 2015]
UK Bank of England,CISL, Oxford University
FOCUS ON PRACTICE
© UNEP INQUIRY NOVEMBER 2015
BUILDING KNOWLEDGE NETWORKS
SLIIDE 8
© UNEP INQUIRY NOVEMBER 2015
PARTNERING FOR CHANGE
The People’s Bank of China (PBC) has co-convened with the Inquiry a Green Finance Task Force to draw up proposals for a green financial system.
The Federation of Indian Chambers of Commerce and Industry (FICCI) has catalysed a high-level dialogue between the industry, government and regulators.
The Swiss Federal Office for the Environment launched a national consultation with the Swiss Sustainable Finance Initiative.
The Bank of England worked with the Inquiry on the international dimension of its prudential review of insurance and climate change.
SLIIDE 9
© UNEP INQUIRY NOVEMBER 2015
CO-DESIGNING ROADMAPS
Three quarters of the members of China’s Green Finance Task Force were from the private sector. Members included representatives of : Shenzhen Stock Exchange, China Securities, China Minsheng Bank, ICBC, China Banking Regulatory Commission, People’s Bank of China.
In the Netherlands the Dutch Banking Code was developed by the Dutch Banking Association (NVB) and has been integrated in regulation.
South Africa’s Financial Sector Charter was developed through a multilateral social dialogue forum which brought together Government, Business, Labour and Community constituencies.
The Federation of Indian Chambers of Commerce and Industry (FICCI) catalysed a high-level dialogue between the industry, government and regulators. Members of the advisory committee included Shakti Foundation, Kiran Energy, TERI, SunEdison, Yes Bank,, WWF, IFC, HSBC
SLIIDE 10
© UNEP INQUIRY NOVEMBER 2015
Food and agriculture
Water and sanitation
Energy
Small and medium enterprises
LINKS TO SUSTAINABLE DEVELOPMENT GOALSAreas of high capital investment need
Green infrastructure
Climate change
Ecosystems and biodiversity
SLIIDE 11
© UNEP INQUIRY NOVEMBER 2015
CONSULTATIVE PROCESS
UN SYSTEM• DESA• ILO• REGIONAL COMMISSIONS• SE4ALL• Secretary General’s Office• UNCTAD• UNITAR• UNOHRLSS (SIDS)• UNDP
EXTERNAL FINANCIAL INSTITUTIONS• Bank of International Settlements• Central Banks and Ministries of Finance• Financial Stability Board• IMF• OECD• World Bank Group
UNEPRegional officesDTIEUNEP FIGGKPEconomics & Trade Branch
BILATERAL AND INTERGOVERNMENTAL PROCESSES Financing for DevelopmentCOP/Climate ChangeSDGsRegional groups
SLIIDE 12
© UNEP INQUIRY NOVEMBER 2015
INQUIRY RESEARCH PORTALPOST LAUNCH COMMUNITY
Global Report (English + 6 languages)
Policy Summary
Other reports Country research Working papers
54 publications/research pieces published
15 more by end of 2015
www.unepinquiry.org
SLIIDE 13
© UNEP INQUIRY NOVEMBER 2015
FINDINGS: ‘a quiet revolution’ - 100+ measures globally
Enhancing market practice
Harnessing the public balance sheet
Directing finance through policy
Transforming culture
Upgrading governance
Measures in practiceDiverse starting points Levers for action
Air pollution
Infrastructure investment
Financial inclusion, greening industry
Integration in prudential banking regulation
New investor reporting requirements on climate
Coordinated roadmap led by regulator
Financial sector compactIncentives for clean energy bonds
Climate change
Post-crisis rebuilding of trust in finance
SLIIDE 14
© UNEP INQUIRY NOVEMBER 2015
A FRAMEWORK FOR ACTION
“The sustainable finance programme is not only intended to increase financing but also to improve the resilience and competitiveness of financial institutions” Muliaman D. Hadad, Chairman, Indonesia Financial Services Authority (OJK) Board
SLIIDE 15
© UNEP INQUIRY NOVEMBER 2015
TAKING A SYSTEMATIC APPROACH: acting nationally
Deepening access to finance
Reducing local environmental impacts
Mobilising capital for clean infrastructure
Strengthening resilience of the financial system
Improving market efficiency and transparency
‘DEVELOPING COUNTRY’
NATIONAL COMPACTS &
PLANSStrengthening financial culture
Driving the low-carbon transition
Supporting long-term needs of real economy
Strengthening resilience of the financial system
Improving market efficiency and transparency
‘DEVELOPED COUNTRY’
Build coalitio
n
Diagnostic &
metrics
Assess options
Design pathway
Implement and learn
SLIIDE 16
© UNEP INQUIRY NOVEMBER 2015
OPPORTUNITIES FOR INTERNATIONAL COOPERATION
Sharing experience, such as the Sustainable Banking Network of developing country regulators
Building new tools, for example, environmental stress testing of critical threats
Developing common principles, for example, for the growing green bond market
Drawing up practical guidance to enable insurance regulators to address threats of natural hazards and climate change
Strengthening the policy architecture, for example, work on green finance during China’s G20 in 2016
SLIIDE 17
© UNEP INQUIRY NOVEMBER 2015
VISION OF SUCESS
[Source Inquiry, 2015]
Financial development
Impact Economic
Social
Environment
Create enabling financial
foundations for development
Develop alignment to
social progress, green industries and safeguards
Invest in assets that improve
social and environmental
outcomes
Developed Developing Emerging
SLIIDE 18
COMPETITIVENESS OF FINANCIAL CENTRES
CURRENT ASSESSMENT DOES NOT TAKE SUSTAINABILTY FACTORS INTO ACCOUNT
[Source: Y/ZEN GFCI 18]
THE FUTURE? RACE TO DEVELOP AS LEADING GREEN FINANCE HUB
Global Financial Centre Index is based on business environment, financial sector development, infrastructure, human capital and reputation.
Exploring how sustainability as a factor in future competitiveness
[Source Inquiry, 2015]
Mahenau Agha, Head of Outreach [email protected] Simon Zadek, Co-Director [email protected] Robins, Co-Director [email protected] General contact [email protected]
www.unepinquiry.orgwww.unep.org/inquiry/
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