18 July 2016: The UN Environment Programme (UNEP) Inquiry into the Design of a Sustainable Financial System has published a report highlighting the diverse experiences of 13 developing countries in directing finance toward sustainable development aims. Launching the report to coincide with the 2016 session of the UN High-level Political Forum on Sustainable Development (HLPF), UNEP emphasized the need for financing at the level of US$5-7 trillion each year to implement the Sustainable Development Goals (SDGs).
The report, titled ‘Green Finance for Developing Countries: Needs, Concerns and Innovations,’ discusses examples of efforts to introduce “green finance” approaches, including the Sustainable Banking Network (SBN), a knowledge and capacity-building platform that brings together financial sector regulators and banking associations to create enabling frameworks for environmentally and socially sustainable finance. Since its creation in 2012, the SBN has assisted 12 countries in developing and implementing regulatory policies or voluntary principles. Current members include Bangladesh, Brazil, Cambodia, China, Colombia, Honduras, Indonesia, Jordan, Kenya, Lao PDR, Mexico, Mongolia, Morocco, Nepal, Nigeria, Pakistan, Paraguay, Peru, Philippines, Thailand, Turkey and Viet Nam.
Other examples include: Kenyan companies that have introduced solar home systems with pay-as-you-go arrangements via mobile banking; the Philippines’ introduction of mandatory disaster insurance for home owners and small and medium enterprises (SMEs); and a collaboration by the State Bank of Vietnam and the Vietnam Bankers Association to develop environmental and social risk management guidelines for the banking sector, drawing on best practices from around the world.
Authors Maya Forstater, Mark Halle and Simon Zadek drew on interviews conducted with government and private sector actors in the countries concerned, as well as a meeting co-hosted by UNEP and Switzerland’s Ministry of Finance from 6-7 April 2016, in Geneva, Switzerland, and a dialogue with G20 members, co-hosted with the International Finance Corporation (IFC) in Washington, DC, US, on 12 April 2016.
UNEP initiated its Inquiry into the Design of a Sustainable Financial System in January 2014 to improve the flow of capital toward a green and inclusive economy. The Inquiry published its first report, ‘The Financial System we Need’ in October 2015. [UNEP Press Release] [Publication: Green Finance for Developing Countries: Needs, Concerns and Innovations] [IISD RS Story on Side Event Discussing Report]