20 March 2018: Financial flows must be redirected to support sustainable development and combat climate change, argued participants at the 2018 Sustainable Investment Forum Europe. The Forum convened under the theme, ‘Financing Innovation for a Low Carbon Future,’ and brought together CEOs, asset managers and owners worth over €3.6 trillion, as well as major policy makers, banks, think tanks and NGOs.

The event took place on 13 March 2018, in Paris, France, organized by Climate Action and the UN Environment Programme’s Finance Initiative (UNEP-FI). During the conference, Eric Usher, Head of UNEP-FI, said the private sector sees the SDGs as a “potentially investable” framework. He said UNEP-FI estimates that around US$6 trillion per year will be needed from now until 2030 to achieve the SDGs, half of which is already flowing, with approximately 60% coming from the private sector. He added that the emergence of an “SDG market” is essential for progress on the more “difficult” Goals.

Speakers suggested that “not all the SDGs are equally actionable” for investors.

European investors have yet to align their investments with the 2°C temperature target, and green bonds still only make up an estimated 1% of the global bond market, according to the Forum’s organizers. Panel speakers at the Forum suggested that “not all the SDGs are equally actionable,” highlighting the example of investing in clean energy versus ocean conservation. Furthermore, investing in some of the Goals and targets could prevent the advancement of others, participants said.

Thus, speakers discussed, inter alia: encouraging more corporate disclosure from companies to make SDG investing more attractive; decarbonizing the energy sector; overcoming “short-termism”; building the right regulatory environment for environmental, social and governance (ESG) investing; translating the SDGs into investment opportunities; and focusing more on the bond market to incorporate ESG issues. They also addressed the Taskforce for Climate-related Financial Disclosures (TCFD), which could be “the future of climate disclosure, including for banks,” and a proposal for “carbon dividends” in the US, whereby a gradually rising tax on carbon is returned to American citizens.

In addition, the European Commission discussed the EU’s new Action Plan on sustainable finance, underscoring the need for a “change of culture” to tackle climate change by improving transparency and accountability. The Plan aims to: close the “180 billion euro a year investment gap” needed to realize the EU’s goal under the Paris Agreement on climate change, to reduce emissions by 40% by 2030; establish a common language to distinguish between green, brown and black investments; create EU labels for green financial products; and increase climate-related financial disclosures.

The North America edition of the Sustainable Investment Forum will convene in New York, US, on 26 September 2018, during Climate Week NYC. It will have the theme, ‘Financing the Low Carbon Transition for a Sustainable Future.’ [Conference Website] [Sustainable Investment Forum Europe] [Climate Action Press Release on Investing in SDGs] [Press Release on the Forum] [Press Release on a Change of Culture] [Press Release on EU Action Plan] [Sustainable Investment Forum North America 2018]