Green Finance Platform 2021: Accelerating climate alignment through sustainable financial measures

With green finance taking centre stage at COP26, the Green Finance Platform is better positioned than ever to help align global financial systems with the Paris Agreement and Agenda 2030.

Our 2021 achievements:
▶️ Updated figures for the Green Finance Measures Database
▶️ Launch of the Sustainable Finance Policy Effectiveness Working Group
▶️ Support for the GEF Aligning Finance Policies project
▶️ New Knowledge Partners and continued knowledge management

? http://ggkp.org/ZbE

Sovereign Wealth Funds Dramatically Step Up Their Focus on ESG

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Are green finance regulations keeping up with climate change?

Yesterday, the EU Council cleared the EU Taxonomy Climate Delegated Act. This legislation set criteria for Climate Change Mitigation and Adaptation objectives in 60+ economic sectors.

Governments worldwide are sending strong signals to the market favoring a more prescriptive approach to green finance regulations.

Taxonomies and regulations like these are part of a shift towards "market-shaping" green finance regulation.

The Green Finance Measures Database maps 680+ policies in 100 countries.

#GFMD ? ggkp.org/GFMD

How is green finance integrated in governments' regulatory landscape?

The Green Finance Measures Database – supported by the Global Environment Facility – is a critical tool to monitor jurisdictions’ leadership in defining market standards for climate neutrality and allow them to benchmark their green finance regulatory landscape against peers.

"With global CO2 emissions still rising, governments must shift the allocation of capital towards their #ClimatePledges"

The political dynamics underpinning a more coordinated approach to green finance measures – in response to the insufficiencies and inadequacies of market-driven solutions to green the financial system – are an important caveat. As climate-related radical uncertainty intersects with non-reversible climate tipping points, regulators and supervisors need to move beyond quantitative analyses that have characterized risk-based approaches to financial measures over the past 6 years.

Where financial regulators currently stand on addressing climate change?

An increasing number of green finance measures are being adopted around the world by policymakers and regulators in a shift toward green finance policy and regulation that goes beyond market-driven solutions.

In addition, 2021 saw a surge in green finance regulations, with 124 measures implemented globally. This reflects the awareness of governments that the financial system will need to be aligned with their net-zero commitments announced during the year. The growing number of green finance measures has been driven by renewed international cooperation, steered by the re-establishment of the G20 Sustainable Finance Study Group and the updated climate pledges announced in the lead-up to the COP26 UN Climate Change Conference in Glasgow in November 2021.

How do we make the global financial system compatible with a net zero economy?

Green finance measures have increased since the Paris Agreement - and so have global CO2 emissions.

▶️ In 2021, 124 green finance measures were implemented globally. Policymakers and regulators are spearheading a shift toward green finance regulation that goes beyond market-driven solutions.
▶️ This year's surge in green finance measures reflects government awareness that financial regulations must be aligned with net-zero commitments announced during the year.

The Green Finance Measures Database is a critical tool to monitor jurisdictions’ leadership in defining market standards for climate neutrality. Visit the GFMD 2021 Figures and explore the database.
#GFMD ?ggkp.org/GFMD

EU taxonomy rules will be on the agenda of a meeting of EU member states in early December, with the European Commission having come under intense pressure to include natural gas and nuclear energy. Ahead of that meeting, professor Andreas Hoepner, a member of the Commission’s sustainable finance advisory body in a personal capacity, expresses his view about how the EU can avoid becoming a climate laggard.

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