This article was cross-posted from the United Nations Environment Programme. Read the original article here.
Washington, DC—The Paulson Institute and the Green Finance Committee of China Society for Finance and Banking convened a half-day symposium of global finance leaders and experts to discuss recommendations for the development of robust global green finance mechanisms and markets. The recommendations coming out of the meetings will be provided to the G20 Green Finance Study Group, which is chaired by the People’s Bank of China and the Bank of England. The study group will finalize a synthesized report for the G20. SIFMA, Bloomberg Philanthropies and United Nations Environment Programme also co-hosted the event.
With China designating green finance as a priority issue during its presidency of this year’s G20 meeting, today’s symposium developed recommendations for the creation of more efficient financing mechanisms to support the green transformation of the global economy. Recommendations included the need to mainstream environmental risk management in the investment decision-making process by banks and institutional investors, to develop the green bond market, to improve disclosure of environmental information by listed companies and bond issuers, and to provide mechanisms to “de-risk” the adoption of green technologies. These efforts will greatly facilitate the mobilization of private capital for green investment that will address environmental and climate challenges.
“The world is facing serious environmental challenges. We need to make stronger commitments to addressing them. We have tried many ways, including environmental regulations, pricing reforms, and fiscal policies. These have all worked in some way in controlling pollution and slowing the pace of global warming, but they are not enough. The financial system should also play an important role in promoting the green transformation of our economies.” said People’s Bank of China Governor Zhou Xiaochuan. “In China, establishing a green finance system has become a national strategy. In the first quarter of this year, China’s issuance of green bonds amounted to about 50% of the world’s green bond issuance.”
“There is an opportunity for the G20 to create practical green financing models for the developed and the developing world. The good news is there is an abundance of capital globally, but governments need to create the proper conditions to attract this capital. They have an important role to play in setting the policies, regulations, and incentives, and in ensuring that they are enforced,” said Paulson Institute Chairman Henry M. Paulson, Jr. “Global capital markets are powerful forces. Directed properly, they can alleviate the burden on governments and unlock a sustainable economic future.”
“The capital markets provide a tremendous opportunity for advancing global climate goals. As nations move forward with their commitment to green growth, funding sources will have to be as innovative as the green initiatives they seek to finance. Public funding will never be sufficient, which is why more nations are turning to global capital markets to fund green initiatives, whether it is through the use of green bonds, equity financing through green IPOs, or other methods,” said Kenneth E. Bentsen, Jr., president and CEO of SIFMA.
The seminar opened with welcome remarks by Mr. Bentsen, followed by statements from Governor Zhou and Mr. Paulson. Paulson then moderated a discussion with top CEOs, government ministers, and sustainability and green finance experts on the challenges and opportunities facing the international financial community in driving green finance. The following panel, moderated by Paulson Institute Senior Fellow Deborah Lehr, explored concrete steps needed for greening the financial system. Subsequent panels outlined the development of green funds and bonds and issues related to regulations and disclosure. The event closed with remarks delivered by Lehr.
The Paulson Institute is working with the Chinese government to help launch a Green Building Energy Efficiency Fund, which would pioneer new green finance mechanisms to facilitate the development of environmentally sustainable buildings. Buildings present a particular environmental opportunity, as some 30 percent of global carbon emissions come from the energy used in buildings. “With the right regulations and finance mechanisms in place, emissions could drop significantly,” Paulson said.
About the Paulson Institute: The Paulson Institute is a non-partisan, non-profit Think and Do Tank grounded in the principle that today’s most pressing economic and environmental challenges can be solved only if the United States and China—the world’s largest economies, energy consumers, and emitters of carbon—work in complementary ways. The Institute’s mission is to strengthen US-China relations and to advance sustainable economic growth and environmental protection in both countries. The Institute’s programs—the “Do” side—focus on advancing the transition to more sustainable, low-carbon economic models in China and the United States through industrial transformation, smart urbanization programs, and environmental conservation. In so doing, the Institute aims to advance industrial and nature-based solutions to climate change.
The Institute also promotes bilateral cross-border investment that will help create jobs and strengthen U.S.-China relations. The Institute’s Think Tank publishes prescriptive and analytical papers from leading scholars and practitioners on the most important macroeconomic and structural reform issues facing China today. Founded in 2011 by Henry M. Paulson, Jr., the 74th Secretary of the Treasury and former Chief Executive Officer of Goldman Sachs, the Institute is based in Chicago and has offices in Washington, San Francisco, and Beijing. For more about the Paulson Institute, visit paulsoninstitute.org.
About SIFMA: SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $20 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit sifma.org.
About Bloomberg Philanthropies: Bloomberg Philanthropies works in over 120 countries around the world to ensure better, longer lives for the greatest number of people. The organization focuses on five key areas for creating lasting change: Arts, Education, Environment, Government Innovation and Public Health. Bloomberg Philanthropies encompasses all of Michael R. Bloomberg’s charitable activities, including his foundation and his personal giving. In 2015, Bloomberg Philanthropies distributed over half a billion dollars. For more information, please visit bloomberg.org or follow us on Facebook, Instagram, Snapchat, and Twitter @BloombergDotOrg.
About UNEP Inquiry:
The UNEP Inquiry into the Design of a Sustainable Financial System was established in January 2014 with a mandate to advance policy options that would improve the effectiveness of the financial system in supporting sustainable development.
Supported by a high-level Advisory Council of financial leaders, the Inquiry has looked in-depth at practice in more than 15 countries as well as across key segments of the financial system, such as banking, bond and equity markets, institutional investment, insurance as well as monetary policy. To reach its findings, the Inquiry has worked with central banks, environment ministries, international financial institutions as well as major banks, stock exchanges, pension funds and insurance companies. Its global report, The Financial System We Need, was released in October 2015 and is available atunepinquiry.org.