The UN Environment Programme Finance Initiative (UNEP FI) has issued a discussion paper suggesting that the intergovernmental committee of experts to design a Sustainable Development Financing Strategy called for by Rio+20 represent diverse expertise.
The paper offers key considerations for its deliberations.
5 December 2012: The UN Environment Programme Finance Initiative (UNEP FI) has released a discussion paper, titled “Creating the ‘New Normal’ – Enabling the Financial Sector to Work for Sustainable Development.” The paper follows from the call, at the UN Conference on Sustainable Development (UNCSD, or Rio+20), to establish an intergovernmental committee of experts under the UN General Assembly (UNGA) to propose options for sustainable development financing.
The paper highlights issues, suggested by members of UNEP FI, to be taken into account by this committee.
The paper argues that “financing sustainable development” should go beyond financing specific projects such as renewable energy or water treatment, to actually changing how finance operates so its own processes are both sustainable and support sustainability. It also asserts that if the target of 1-2% of global gross domestic product (GDP) per year of investment in sustainable development through 2050 is to be met, both public and private financing will be required.
According to the paper, mobilizing private financing hinges on removing key gaps, barriers and misaligned incentives, through: making more and better quality information available to all stakeholders; promoting collaboration between different actors that will generate innovative financing products; and aligning economic, environmental and financial policy and law with broader sustainability goals.
The paper finds that the body of good practices required – in policy, standards, norms, awareness- and capacity building, and financial innovations – already exists, but needs to be connected and scaled up. It emphasizes that agreeing on and implementing a viable strategy for sustainable development financing will require the representation of all relevant players – not just public and private finance representatives, but also environmental, developmental, economic and financial experts – in the UNGA’s committee of experts.
UNEP FI indicates that from 2013 onward it will provide regular updates on the status of sustainable finance in the hopes that such updates will assist the committee of experts. [Publication: Creating the “New Normal”]