Data needs to be better and more widely available to make climate and sustainable finance truly transformative on a global scale

Geneva – The relatively poor quality of data and its limited availability is the major challenge facing the world’s financial centres as they try to embrace climate-friendly investment and sustainability practices, according to a study published today.

Despite the challenges, including the huge impact of the COVID-19 pandemic, global financial centres have made significant progress in developing sustainable finance ecosystems.

At the same time, they have doubled or in some cases even tripled capital outflows toward low-carbon transition or the achievement of the Sustainable Development Goals (SDGs).

The UN-convened Financial Centres for Sustainability Network (FC4S) today published findings based on its third Annual Assessment survey, which 24 of its 30 members in 2020 (80%) responded to.

The survey helps FC4S to assess the global development of sustainable finance.  It provides members with a baseline alignment to the Paris Agreement and the SDGs, and an update on progress in different centres. It also helps identify areas where more support is required to underpin progress, and further drive progress through strategic roadmap development.

The report, developed in partnership with PwC, a FC4S partner and co-funded by EIT Climate-KIC, was launched during the annual Abu Dhabi Sustainable Finance Forum 2021, hosted by Abu Dhabi Global Market (ADGM) and taking place during the 3rd Abu Dhabi Sustainability Week – a virtual event.

The report shows that between 2018 and 2020, the financial centres which participated in the FC4S Assessment Programme have made significant progress, regardless of their size or maturity level.

Other key trends include:

  • Financial centres across all continents are mobilizing their resources, connectivity, expertise and capital to align with the objectives of a sustainable financial system.
  • They are working with other institutions and private actors to build high-level approaches and initiatives to make significant progress at a national level.
  • The study shows that the number and the diversity of the stakeholders involved in member FC4S sustainable finance initiatives nearly doubled between 2018 and 2020.
  • The share of centres reporting having implemented fiscal incentives or public-backed funds and institutions to support green and sustainable finance activities doubled between 2018 and 2020.

As they strive to deliver capital to support the low-carbon transition and the achievement of the Sustainable Development Goals, financial centres report several key challenges. These include:

  • Thirst for data: Data quality and availability is the primary challenge faced by two thirds of financial centres. Leading centres are facing issues on comparability and market sizing, while private actors are struggling to identify which capital flows can be considered as green and sustainable.
  • Going beyond climate: Climate Change continues to be a major focus for any private and public institution, and it remains a point of entry into sustainable activities. Social and biodiversity themes are emerging.
  • Public authorities are key for take-off: Public authorities can play an important role in encouraging the implementation of Paris alignment commitments, and the SDGs, addressing shared challenges and promoting the use and harmonization of assessment tools and methods.
  • Policy and regulations remain a critical driver: Four out of five financial centres consider that new policy initiatives can act as a “positive enabler” or even be a “major driver” of sustainable finance.
  • Increasing international collaboration: Nearly half of centres have identified “building connectivity” in their top 3 priorities, the continuous expansion of the FC4S network illustrates such a trend.
  • Professional development and education: Skill shortage may prevent public and private institutions alike in going beyond commitments and scaling up sustainable financial activities, but centres are reporting a growing number of sustainable finance programmes and training that are available both to students and workers.

Commenting on the report, Jennifer Reynolds, President and CEO, Toronto Finance International and FC4S Network Co-Chair, said:

“It is clear the economic crisis created by the COVID-19 pandemic has not halted the development of sustainable finance. Green bonds issuance was sustained across 2020. Innovative investment products targeting green and sustainable issues have been proliferating globally and ESG investment funds registered record inflows throughout 2020. As this FC4S report makes clear, in line with these developments financial centres across all continents are increasingly mobilizing their resources, connectivity, expertise and capital to align with the objectives of a sustainable financial system, in short, delivering capital to support the low-carbon transition and the achievement of the SDGs.”

 

Lamia Merzouki, Deputy General Manager, Casablanca Finance City Authority and FC4S Network Co-Chair, said:

“The FC4S Assessment Programme offers a unique perspective, capturing the pre-COVID trends to better project the fierce dynamism that sustainable finance will likely enjoy in the next 5 to 10 years. Understanding the central role financial centres are playing in the transition of the global financial system, ensures FC4S support members build back better and accelerate the integration of the sustainable finance agenda into the global economic recovery as we deal with the COVID-19 pandemic.”

 

A FC4S member, Emmanuel Givanakis, Deputy CEO of the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), said:

The progress showcased in the FC4S Assessment Report is indicative of the instrumental role that international financial centres play in championing sustainable finance practices across their jurisdictions. It further reinforces the unwavering commitment of FC4S members towards strengthening sustainability over recent years, especially amid headwinds caused by the COVID-19 pandemic. At ADGM, we are deeply committed to these global sustainability objectives and have manifested our dedication to sustainable finance through our many initiatives, first and foremost of which is our annual Abu Dhabi Sustainable Finance Forum. We are pleased that our flagship event has served as the launchpad for this year’s report and hope to continue working alongside our industry peers in service of our collective growth.” 

Read the full report here.

 

For more information, please contact:

Mr. Ciaran Byrne

Email: ciaran@storylab.ie

 

NOTES:

Assessment Programme participation: Since 2018, the participation of FC4S members in the Assessment Programme has been steadily growing both in terms of number of participants and response rate. In 2020, twice as many Financial centres participated in the Assessment Programme as in 2018, and the response rate increased, 80% in 2020 vs. 70% in 2018 highlighting the importance FC4S members are placing on the assessment programme as a key element of their centre activities.

Financial Centres for Sustainability: The International Network of Financial Centres for Sustainability (FC4S Network) is a partnership between the world’s financial centres, comprised of 33 member centres as of January 2021. An output of the UNEP Inquiry, the FC4S Network is supported in its work by both the UNDP Finance Sector Hub and the UNEP Finance Initiative. The objective of the Network is to enable financial centres to exchange experience, drive convergence, and take action on shared priorities to accelerate the expansion of green and sustainable finance. The FC4S Secretariat works with financial centre members to achieve this objective, through the provision of research on emerging issues, guidance on best practices, strategic advisory, and project development and support services, including through regional initiatives.

At 33 members, the FC4S Network members include Abidjan, Abu Dhabi, Astana, Barcelona, Beijing, Cairo, Casablanca, Dublin, Frankfurt, Geneva, Guernsey, Hong Kong, Kuala Lumpur, Lagos, Liechtenstein, London, Lisbon, Luxembourg, Milan, Madrid, Mexico, Montréal, Nairobi, New York City, Paris, Rio de Janeiro, Seoul, Shanghai, Shenzhen, Stockholm, Tokyo, Toronto, and Zurich.

FC4S launches Green Lines – a sustainable finance leadership podcast

The UN-convened international Network of Financial Centres for Sustainability (FC4S) launches
a new podcast. Green Lines – a sustainable finance leadership podcast – will explore new and
emerging trends in sustainable finance.

The podcast will also provide a platform to shine a light on the many challenges and opportunities
presented to the world’s financial system by climate change, and the wider ESG agenda.

In a series of interviews with leading players in this field, FC4S Managing Director Stephen Nolan
chats through the opportunities that have arisen and debates the risks posed to financial stability
and the impact on global economies.

In Episode 1, Stephen’s first guest is Minister of Finance for Luxembourg, Pierre Gramegna.

Listen here:

FC4S welcomes Malaysia as 33rd member

Kuala Lumpur/Geneva – Today the UN-convened international Network of Financial Centres for Sustainability (FC4S) welcomed its 33rd member with Capital Markets Malaysia (CMM) based in Kuala Lumpur officially joining the network.  As the sixth largest economy in South East Asia and the 39th largest in the world, Malaysia stands at the crossroads of mainstreaming the sustainable finance revolution.

Capital Markets Malaysia (CMM) was set up by the Securities Commission Malaysia (SC) in 2014, to spearhead both the local and international positioning and profiling of the Malaysian capital market. CMM profiles the competitiveness and attractiveness of the various segments of the capital market to increase participation and enhance opportunities for Malaysian capital market intermediaries.

“CMM’s membership of the Financial Centres for Sustainability reinforces Malaysia’s resolve to develop a holistic, sustainable and responsible financing and investment ecosystem. The Securities Commission Malaysia will continue to encourage innovation and promote the principles of sustainable development in the capital markets, to advance the nation’s sustainability agenda,” said Syed Zaid Albar, Chairman of the SC.

A key priority for CMM over the next three years is to facilitate the development of Malaysia’s sustainable finance and investing ecosystem. In an effort to streamline its sustainable finance work CMM formed the Malaysian Sustainable Finance Initiative (MSFI). The purpose of the Centre of Excellence is to support the Malaysian financial sector in further embracing the tenets of sustainable finance. MSFI is led by a Steering Committee which is chaired by SC and includes members representing stakeholder groups within the financial sector involved with financing green or sustainable projects. Its objective is to provide impetus for industry stakeholders to facilitate capacity building, upskilling, awareness and thought leadership on sustainable finance.

“By joining FC4S, Malaysia is laying out it’s sustainable finance ambitions for the world to see. As part of our network they will be able to liaise and learn from our membership of over 30 financial centres about everything from taxonomies to green bonds. In just a few years Malaysia has taken huge steps towards mainstreaming sustainable finance and we here at FC4S look forward to assisting them in every way possible,” said FC4S co-chair Lamia Merzouki.

“Malaysia is at an important stage of its sustainable finance roadmap and we believe that FC4S could play a crucial role in its future. They have already started working on the creation of a green taxonomy and it is essential for it to be aligned with international best practices to avoid Malaysian financial institutions, issuers and asset managers from being left behind. With our network of financial centres around the world Malaysia will now have access to a suite of knowledge and data that outlines what’s worked and what hasn’t in jurisdictions from Rio de Janeiro to Nur-Sultan. Thus, giving it insight to best practices around the world.” said Stephen Nolan, FC4S, Managing Director.

As one of the Islamic finance capitals of the world, Malaysia has also been a pioneer in the field of Sukuk, and more recently green Sukuk. A Sukuk is an Islamic version of the conventional bond—and it can be leveraged to enable inclusive growth, moderate inequality, and support poverty reduction. Malaysia as one of the largest issuers of Sukuk with 41.5% market share of global issuances, has proved that it’s diversified sustainable financial products and services, will play a major role in the international stage as they continue to innovate.

 

For more information, please contact:

Nader Rahman
Communications and Partnerships Manager (New York)
nader.rahman@un.org

 

Navina Balasingam
Head of Stakeholder Engagement and Business Development
Capital Markets Malaysia
Navinab@seccom.com.my

FC4S adds new members and elects two new co-chairs at 2020 AGM

Casablanca/Geneva/Toronto – Today, the UN-backed International Network of Financial Centres for Sustainability (FC4S) continued its rapid expansion by adding new members in North and South America. The network also elected two new Co-chairs, with Jennifer Reynolds, President and CEO of Toronto Finance International (TFI) and Lamia Merzouki, Deputy General Manager at Casablanca Finance City taking over.

Ms. Reynolds 20-year career in the financial services industry has included senior roles in investment banking, venture capital, and global risk management. Prior to joining TFI, Ms. Reynolds was the President & CEO of Women in Capital Markets (WCM), Canada’s largest industry association and advocacy group for women in the financial sector. Ms. Reynolds also currently sits on the Advisory Board for Canada’s Institute for Sustainable Finance.

Ms. Merzouki has been the Deputy General Manager of Casablanca Finance City Authority since its launch in 2010. She started her career at Arthur Andersen in Paris before returning to Morocco where she was Head of strategy and corporate finance in both public and private sector entities from AKWA Group (one of the biggest conglomerates in Morocco) to the Ministry of Agriculture as well as the Souss Massa Draa Region. Ms. Merzouki is an executive coach, Vice-Chairman of the Women Working For Change network as well as Co-lead of the Africa CEO Network.

“I am honored to be taking on the Co-Chair role for FC4S and I look forward to working with our members to accelerate the shift to sustainable finance. Financial centres have a critical role to play  in the achievement of the Paris Agreement and the SDGs and FC4S is facilitating vital global collaboration and action to achieve our collective goals,” said Jennifer Reynolds, President & CEO of Toronto Finance International.

“I am honored that Morocco will be representing the African continent as a Co-Chair for the FC4S for the upcoming two years.  I hope this will contribute to accelerate the transition to sustainable forms of finance on the continent, a transition that is all the more urgent given the impact of the Covid pandemic,” said Lamia Merzouki, Deputy General Manager of Casablanca Finance City Authority

“We here at FC4S are delighted to welcome Ms. Lamia Merzouki and Ms. Jennifer Reynolds as our new Co-chairs for our upcoming two-year cycle. Together they bring decades of experience and collectively have their fingers on the pulse of the sustainable finance landscape,” said Stephen Nolan, Managing Director FC4S.

Mr Nolan added, “We have also been extraordinarily privileged to have worked with Mr. Kong Wei, Convener, Shanghai Lujiazui Financial City Council Green Finance Development Committee and Mr. Pierre Ducret, Special Advisor to the Chairman of Finance for Tomorrow. As Co-chairs they have helped FC4S more than double its membership to point where we now have a network of financial centres that account for $75 trillion in equity market capitalization.”

The three sessions of the virtual AGM were hosted virtually by Finance for Tomorrow after the in -person meeting in Paris was cancelled due to the ongoing COVID-19 crisis. At the meeting, FC4S members updated the secretariat of their work across the last year while also feeding into the development of the 2021 work plan. Two new voices were added to the mix with Rio de Janeiro, and Montreal joining the FC4S network in October.

The Laboratory of Financial Innovation (LAB) is a project of the Brazilian Development Association (ABDE), the Inter-American Development Bank (IDB), the Securities and Exchange Commission (CVM) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). It works as a multi-sectoral discussion forum and its purpose is to promote dialogue between the public and private sectors and to share experience among various agents of the economy.

Finance Montreal, Quebec’s national cluster, was created in 2010 by institutions in the financial services industry at the invitation of the Québec Government. Its mission is to develop and promote Quebec’s financial services industry though consultation and mobilization in order to make Quebec a competitive, attractive and innovative financial centre.

Despite COVID-19, FC4S has issued four reports this year of which one was the first analysis of the pandemic through the lens of sustainable finance. Other global reports included the world first analysis of the complex array of relationships of sustainable finance partnerships while highlighting how the sustainable finance ecosystem can better work together to achieve the global development goals of the next decade. FC4S will also launch a pan-European report on the state of sustainable finance skills as well as the most advanced version of its assessment programme (AP).

The objective of the AP is to provide FC4S members with a level of alignment, labelled from 0 to 5 on their proprietary Sustainable Finance Scale (SFS) which assesses the progress of the green and sustainable finance agenda within member centres, the degree of capital provision in supporting low-carbon transition, alignment to the Paris Agreement and the achievement of the UN SDGs.

Finance Montreal joins FC4S’s rapidly expanding Americas membership

Quebec/Geneva Today, the UN-convened International Network of Financial Centres for Sustainability (FC4S) network expanded its network in the Americas with the induction of its newest member, Finance Montreal. With the addition of Montreal, the FC4S network has now grown to 32 members from 5 continents.  As one of North America’s most vibrant financial centres, Montreal houses more than 3,000 companies in the financial services that employ over 100,000 skilled workers, 25,000 of whom are financial specialists.

At the heart of this scene is Finance Montréal which unites the sector into a province-wide cluster of forward-thinking organizations all dedicated to the growth and development of the Quebec and Montréal financial ecosystem. Finance Montreal, Quebec’s national cluster was created in 2010 by institutions in the financial services industry at the invitation of the Québec Government. Its mission is to develop and promote Quebec’s financial services industry though consultation and mobilization in order to make Quebec a competitive, attractive and innovative financial centre.

Within Finance Montreal their dedicated Finance and Sustainability Initiative (FSI) brings together the players in the financial center of Montreal and Quebec who respond to environmental, social and governance issues (ESG), while looking for positive spinoffs for the economy and communities.

Recently Finance Montreal conducted a strategic planning exercise on sustainable finance, where they identified and prioritized 15 strategic initiatives to be undertaken in the short term. One of which was the increased connection with sustainable finance networks, a priority that led them directly to joining FC4S, as it is one of the world’s premier sustainable finance networks.

“For many years now, Finance Montreal has been actively involved with financial institutions to go beyond responsible investment and foster the emergence of sustainable finance in Quebec. Today we are thrilled to join FC4S as a new member which allows us to differentiate Montreal at an international level, consolidate synergies within the ecosystem, and promote the financial center globally. We look forward to working alongside other financial centers and establishing a constructive dialogue on the relation between economic development, environmental protection and sustainable development, and on how finance can tackle those challenges,” Jacques Deforges, Chief Executive Officer, Finance Montréal

“Finance Montreal is the perfect addition to the FC4S network and we are especially interested in learning from their collaborative approach bringing together all the players of their rich ecosystem. Their work with universities and educational institutions has led for instance to the creation of the Sustainable Investment Professional Certification (SIPC), an innovative skills development programme which is designed with an emphasis to help students understand concepts of environmental, social, financial and ethical sustainability in real-world settings. These are the type of initiatives we are hoping to encourage at FC4S,” said Kong Wei, Co-chair, FC4S.

The FC4S network and Finance Montreal will work together to promote strategic action in Canada, the Americas and globally.

FC4S’s Annual General Meeting Starts

On Wednesday 14 October, the International Network of Financial Centres for Sustainability (FC4S) held it’s first of three Annual General Meeting (AGM) sessions. Due to the ongoing COVID-19 pandemic the meeting was held online, with almost all FC4S members in attendance.

FC4S’s Annual Meeting in 2020 was initially scheduled to be hosted in Paris by Finance for Tomorrow. While they could not host the meeting in person, Paris and Finance for Tomorrow assisted FC4S and were still the ‘virtual’ hosts of the meeting.

The meeting kicked off with a message from thanks and appreciation from the United Nations and was followed by remarks from both the co-chairs. The were also updates from members as well as an extended update from the FC4S Secretariat itself.

Leading in to the AGM FC4S added its first South American member, with Brazil’s Laboratory of Financial Innovation (LAB) joining the network. The Rio de Janeiro organization is a project of the Brazilian Development Association (ABDE), the Inter-American Development Bank (IDB), the Securities and Exchange Commission (CVM) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). It works as a multi-sectoral discussion forum and Its purpose is to promote dialogue between the public and private sectors and to share experience among various agents of the economy.

The next sessions of the AGM will be on 21 and 28 October.

Rio de Janeiro becomes first South American financial centre to join FC4S

Rio de Janeiro/Geneva, Representing Brazil’s public and private sector financial services sector actors, today Brazil’s Laboratory of Financial Innovation (LAB) joined the International Network of Financial Centres for Sustainability (FC4S) to become the network’s first South American member. As the 31st member of FC4S, LAB joins financial centres who collectively manage 80% of global equity markets, representing $61.3 trillion in equity market capitalization.

“As the largest economy in Latin America, Brazil is an emerging leader in the sustainable finance landscape. Sustainability and specifically sustainable finance is on the cusp of a revolution in the country. LAB is in the vanguard of that change and joining FC4S can be an accelerator. As we prepare for FC4S’s AGM next week (14th October), this is a welcome development,” said FC4S Co-Chair and Special Advisor to the Chairman of Paris-based Finance for Tomorrow, Pierre Ducret.

Launched in August 2017, (LAB) is a project of the Brazilian Development Association (ABDE), the Inter-American Development Bank (IDB), the Securities and Exchange Commission (CVM) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. It works as a multi-sectoral discussion forum and Its purpose is to promote dialogue between the public and private sectors and to share experience among various agents of the economy.

“By joining the FC4S Network, we look forward to working with the Secretariat and fellow Members to interact, exchange and promote strategic action globally, and in our jurisdiction on green and sustainable finance,” said Jose Alexandre Vasco, Director of the Office of Investor Protection and Assistance (SOI/CVM).

LAB’s objective is to encourage the creation of new green and sustainable products and financial solutions that increase private sector participation in green and sustainable solutions in markets such as energy, water, transportation, agriculture and finance (fintech).

Working with FC4S LAB proposes to go beyond a space of knowledge production and will promote the structuring and piloting of new financial products, using research, analysis and the technical prowess of its participants. To this end, LAB and FC4S will work together to analyze innovative instruments and good local and international practices that can be replicated by the Brazilian financial (public and private) institutions, as well structure solutions that increase the efficiency of the resources of impact investors.

FC4S joins leading banks and companies along with UK, French, Swiss and Peruvian governments in effort to set up a Task Force on Nature-related Financial Disclosures

London, 25 September 2020: Efforts to establish a Task Force on Nature-related Financial Disclosures (TNFD) have today passed an important milestone with the announcement of an Informal Working Group (IWG) comprising some of the world’s biggest banks, investors and companies, as well as governments and regulatory bodies.

The 62 members that make up the IWG are part of the initial planning phase of the TNFD, tasked with establishing a detailed work plan for the Task Force for when it launches in 2021.

A TNFD will build awareness and capacity to enable the financial sector to address the market and systemic failures contributing to the destruction of nature. Data gaps currently prevent financial institutions from assessing their nature-related risks, the IWG will be discussing how to bridge this gap, enabling global finance to shift from nature negative to nature positive.

At the Business of Finance Day at the Nature for Life Hub, Bérangère Abba, French Secretary of State, Ministry for Ecological Transition, announced the IWG and its commitments to the creation of a Task Force and an international reporting standard that is critical for halting biodiversity and ecosystem loss.

Bérangère Abba said: “Biodiversity finance is the new frontier of green finance. Nature requires as much ambition and collective effort as it has been done for climate so far, and the private sector can play a crucial part in redirecting financial flows. We are convinced that the work of the Task-force on Nature-related Financial Disclosures, or “TNFD”, will accelerate the understanding of these issues and will ultimately lead to both a reduction in financial flows and economic activities that are harmful to biodiversity and a massive redirection of flows towards activities that are favourable to biodiversity.”

Madeleine Ronquest, Head Environmental, Social and Climate Risk at FirstRand Group Enterprise Risk Management (South Africa), said: “The launch of the Informal Working Group (IWG) for the TNFD is a significant step towards the goal of moving the global financial system from nature negative to nature positive. I look forward to working with the IWG members to shape and implement the Task Force that will help to make this transition possible.”

“Loss of nature is increasingly impacting business performance. Consumers, stakeholders and governments expect business to take actions which halt the loss of nature. WBCSD supports the launch of the TNFD which will help companies consistently and credibly assess, address and report their impacts and dependencies on nature”, added Diane Holdorf, Managing Director & Senior Management Team, World Business Council for Sustainable Development.

The IWG will meet on a monthly basis and will be supported by a Technical Expert Group (TEG), which is currently in the final stages of formation. The TEG will serve at the direction of the IWG and support the working group in articulating the scope and objectives for the TNFD; the group will be made up of individuals with representative expertise and overview of relevant sources for biodiversity data and tools for assessing nature-related investment risk.

 

Partner and Think Tank Quotes

Stephen Nolan, Managing Director of the International Network of Financial Centres for Sustainability says: “As we have learned nature-positive transitions could generate trillions of dollars in business value and as well potentially hundreds of millions of jobs. That could fundamentally reshape the world and the environment we live in for the better. FC4S is proud to be one of the think tanks assisting the Informal Working Group (IWG) to establish the Task Force on Nature-related Financial Disclosures; as we hope to use sustainable finance to catalyse nature-positive outcomes, in alignment with the UNFCCC Paris Agreement, the CBD Post-2020 Global Biodiversity Targets and the UN Sustainable Development Goals.”

Andrew Mitchell, a Founder and Senior Advisor to Global Canopy commented: “The creation of a TNFD is hugely important as it will lead to new ways of identifying, valuing and reporting on nature-related risks, as well as identifying new economic opportunities to protect and restore the natural world on which we depend, which is more pressing than ever. To have the commitment of these heavyweight companies joining the IWG is a great start in this initiative.”

Midori Paxton, Head of Ecosystems and Biodiversity, UNDP says, “Changing flows of money from nature negative to nature positive is a fundamental ingredient in shifting global systems towards protecting and nurturing nature. Nature underpins world’s businesses. We desperately need nature – for air, water, food and for our health, inspiration, jobs, livelihoods and for achieving the Sustainable Development Goals. Financial institutions and businesses have a critical key to protect nature. If we protect nature, it will pay us back with significant financial and material dividends.”

Eric Usher, Head of UN Environment Programme Finance Initiative said: “An increasing number of financial institutions are stepping forward to address the twin crises of climate change and the loss of nature, and the strong appetite for a TNFD is further evidence of this momentum. Standardising nature-related disclosures will bring much needed efficiencies and transparency to financial markets.”

Margaret Kuhlow, Finance Practice Lead and Interim Conservation Director, WWF International said: “Habitat loss and degradation including deforestation that is largely driven by the way we produce and consume food are rapidly undermining the natural systems on which our economies and our own health rely. Nature loss is a source of systemic risk and instability for markets and the financial system but is largely ignored in corporate and financial decision-making, regulation, and supervision. Our economic behavior has assumed the services that healthy natural systems provide, and on which our economies have been built, are infinite. They aren’t. We are pleased to welcome this collaboration with financial institutions, governments, and other experts to establish the TNFD as a vehicle to shift finance away from destructive activities and toward a nature-positive economy.”

FC4S Takes Centre Stage at Major Chinese Financial Expo CIFTIS 2020

A framework that sets out the response of the global financial system to the Covid-19 pandemic and its impact on sustainable finance has been presented at the China International Fair for Trade in Services (CIFTIS), which started on September 4 in Beijing.

The UN hosted Financial Centres for Sustainability (FC4S) Network presented the findings of its Covid-19 report that outlines an initial framework for response strategies and the implications for global sustainable finance.

last year Beijing became the 26th member of the FC4S network which commits the world’s financial centres to working together in support of the Paris Agreement and the UN Sustainable Development Goals. Now at 30 members, FC4S members collectively represent 80% of the global equity market and $61.3 trillion in global equity market capitalisation.

The Beijing municipal government has outlined a blueprint to position Beijing as an international green finance centre and the CIFTIS 2020 offers an opportunity for FC4S to support the progress of critical Chinese initiatives that match this ambition.

These include Beijing to support FC4S setting up a local office, coordinating with FC4S Secretariat and network members in the Asia Pacific region; establishment of capacity building platform for global FC4S members; and facilitation of key policy dialogues at regional and international level.

Commenting, FC4S Managing Director Mr. Stephen Nolan said FC4S was looking forward to presenting its Covid-19 report with the support of Beijing:

“CIFTIS 2020 offers a wonderful platform to showcase the role of the world’s financial service sector in expanding economic opportunities through a more inclusive, sustainable financial system as well as underlining China’s own progress in this space. Presenting our Covid-19 report findings at such a key event, allows FC4S to highlight collective actions which all FC4S members, partners and potential partners can take, with Beijing taking a leadership role in support of the green finance agenda.

And as an important member of the FC4S network, Beijing is well-positioned to promote green finance and is already playing a significant role in this area. As we build back better, Beijing has the advantage of direct policy support, strong financial resources, and deep human capital to support the expansion of green and sustainable financial markets.”

Commenting, Bureau Chief of Beijing Local Financial Supervision and Administration said:

“As a proud member of the FC4S network, we are pleased that FC4S is presenting the findings of its important Covid-19 and sustainable finance paper in Beijing during the China International Fair for Trade in Services (CIFTIS). Beijing Finance Bureau is delighted to support FC4S promote how global financial centres can contribute to sustainable development, in particular in the context of the global pandemic.

Taking this opportunity of report launch, Beijing will further deepen the comprehensive cooperation with FC4S, and also leverage the capital’s resources and platforms to facilitate policy exchanges and dialogues at the city level of green financial centers, promote business exchanges in ESG development, green financial product innovation, green finance certification and standards, etc. All of these activities aim to promote the capacity for sustainable development of the global financial industry.

Beijing plays a key national and international role in supporting capital markets align themselves with the green finance agenda. And with Beijing home to more than 800 licensed corporate financial institution headquarters, Beijing is rapidly emerging at the centre of China’s green finance policy and the birthplace of several important global green finance initiatives. Indeed, the first domestic green corporate bonds, the first renewable green corporate bonds, and the first green asset-backed notes (ABN) were all issued by Beijing companies.”

Beijing is one of eight FC4S members in Asia, with Hong Kong, Seoul, Shanghai, Shenzhen, Tokyo, Abu Dhabi and Astana on board.

Read the full FC4S report that was presented in Beijing here.

FC4S annual member assessment programme launched

Tracking the progress of FC4S members as they accelerate local efforts to mainstream green and sustainable finance is a key objective of the FC4S global network. Given this, in 2018 FC4S and knowledge partners developed the FC4S assessment programme.

At a high-level, the objectives of the FC4S assessment programme are to provide respondents with a level of alignment, labelled from 0 to 5 on our Sustainable Finance Scale (SFS) which assesses the progress of the green and sustainable finance agenda within member centres, the degree of capital provision in support low-carbon transition, alignment to the Paris Agreement and the achievement of the UN SDGs.

In addition, this framework enables FC4S members to evaluate how their own institutional strategies and broader financial and capital markets are aligned with the objectives of a sustainable financial system.

Now in its third year and following members input at the FC4S Q4 2019 AGM in Geneva, the FC4S assessment programme has recently been updated with the support of PwC, knowledge partners the Institute for Climate Economics (I4CE) and the UNDP Finance Sector Hub, along with a small working group of members including London, Paris, Frankfurt, Dublin, Shenzhen and Guernsey.

As per previous years, aggregate results will be shared with members during at the 2020 FC4S AGM.

Afterwards, the FC4S Secretariat will work with its knowledge partners to develop a public report summarizing the findings of the report. To be published in Q4 2020, this report will draw upon information gathered through the survey process, as well as other sources of data, which combined will highlight the critical role of financial centres in accelerating the green and sustainable finance agenda, not least as we build back better from the COVID-19 pandemic.

Separately and for the first time, the FC4S Secretariat will also produce an individual report analyzing each centre’s progress as per the sustainable finance scale, a possible pathway to move up a level in 2021 and how best the FC4S Secretariat and partners can assist in achieving.

The development and recent update to the FC4S assessment programme is supported by EIT Climate-KIC, a key partner of FC4S.