Green finance has garnered the attention of the Group of Twenty (G20), as the G20 Green Finance Study Group (GFSG) was established under the 2016 Chinese Presidency.
The GFSG released its 'G20 Green Finance Synthesis Report' at the G20 Summit, and, for the first time, the Summit's annual communiqué references the importance of green finance.
5 September 2016: Green finance has garnered the attention of the Group of Twenty (G20), as the G20 Green Finance Study Group (GFSG) was established under the 2016 Chinese Presidency. The GFSG released its ‘G20 Green Finance Synthesis Report’ at the G20 Summit, and, for the first time, the Summit’s annual communiqué references the importance of green finance.
The GFSG, co-chaired by China and the UK, and supported by UN Environment, developed the report to examine the need to scale green finance, and the difficulties in doing so. The report was presented to the G20 Finance Ministers and Central Bank Governors.
After analyzing challenges such as externalities, maturity mismatch, lack of clarity in “green” definitions, information asymmetry and lack of analytical capabilities, the report contains seven key options for developing green finance.
The authors suggest that the G20 and country authorities could expand learning networks for capacity building, and improve the measurement of green finance activities and their impacts. They further recommend considering that country authorities could provide strategic policy signals and frameworks, as well as work with international organizations and the private sector to promote voluntary principles for green finance.
According to the report, country authorities, or market bodies, could also promote international collaboration to facilitate cross-border investment in green bonds, and the G20/GFSG could encourage and facilitate knowledge sharing on environmental and financial risk. Finally, the GFSG found another option to be that international organizations, development banks and specialized market bodies support the development of local green bond markets.
The G20, in its communiqué, welcomes the report and recognizes the challenges and voluntary options presented in it. In addition, the G20 leaders “recognize that, in order to support environmentally sustainable growth globally, it is necessary to scale up green financing.”
The G20 Summit was held from 4-5 September 2016, in Hangzhou, China. The G20 represents 85% of global gross domestic product (GDP), 75% of world trade and approximately two-thirds of the world’s population. China currently holds the Presidency. The G20 members include 19 individual countries, namely Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, the Russian Federation, Saudi Arabia, South Africa, Turkey, the UK and the US – along with the EU. [UN Press Release] [G20 Green Finance Study Group Document Repository] [G20 Green Finance Synthesis Report] [IISD RS Story on G20 Summit]