26 September 2016
UNEP Inquiry Outlines Ways to Unlock Financing for Sustainable Development
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The UN Environment Programme (UNEP) has explored how national governments and business actors are starting to direct financial flows toward sustainable development aims, in a report on “Financing Sustainable Development: Moving from Momentum to Transformation in a Time of Turmoil.”

unep-inquirySeptember 2016: A report from the UN Environment Programme (UNEP) Inquiry into the Design of a Sustainable Financial System explores how national governments and business actors are starting to direct financial flows towards sustainable development aims. It draws on the outcomes of a meeting on financing sustainable development hosted by the UNEP Inquiry and UN Women, on 24 August 2016.

The authors of the report, titled ‘Financing Sustainable Development: Moving from Momentum to Transformation in a Time of Turmoil,’ cite examples of national action, including: China’s regulations for green bonds, which sparked the issuance of US$8 billion worth of green bonds in early 2016; Brazil’s introduction of socio-environmental risk regulations for banking; the launch of the Stock Exchange of Mauritius (SEM) Sustainability Index; and the Philippines’ creation of a disaster insurance pool that will make disaster insurance compulsory for homeowners and small to medium-sized enterprises (SMEs).

The authors, Simon Zadek and Nick Robins, also analyze barriers to investing in sustainable development, including prioritizing short-term interests over long-term gains, mispricing environmental risk, and the capital-intensive nature of some investments in sustainable development. The report highlights the work of coalitions that are providing leadership in this emerging market, such as the Portfolio Decarbonization Coalition of Investors, which seeks to decarbonize around US$600 billion worth of asset portfolios, and the 17 insurance companies that are participating in the Principles for Sustainable Insurance, a UNEP initiative.

Noting that the 2030 Agenda for Sustainable Development will require around US$90 trillion of investment over 15 years, the report contains five recommended steps to promote financing of sustainable development: design changes to financial systems at the national level; technology that helps align financial systems to sustainable development aims; directing public finance toward sustainable development; raising awareness in the financial sector; and developing commons tools and approaches.

The UNEP Inquiry was created in early 2014, and has considered various aspects of financial and monetary policies and regulations to promote sustainable development, including disclosure requirements, credit ratings and the respective roles of authorities such as central banks, finance ministries and stock exchanges. [Publication: Financing Sustainable Development: Moving from Momentum to Transformation in a Time of Turmoil]

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