Financial markets and capital flow are essential to support sustainable economic activities and the Sustainable Development Goals (SDGs). Integrating them with a rules-based approach and effective policies to ensure that all lending and investments are aligned with climate and environmental goals will be key. As such, the Green Finance Platform has developed a set of tools to help create an enabling environment to bring credibility and accountability to sustainable finance commitments.
A diagnostic toolkit to help countries understand their national sustainable finance status
The Sustainable Finance Diagnostic Toolkit is a 10-step online questionnaire that provides practical guidance for policymakers to improve their understanding of actions to enhance the mobilization of financing for sustainable development.
Launched in September 2022, the toolkit aims to help countries surface necessary information and measures to unlock sustainable finance, which will feed into the development of national, or potentially regional, sustainable finance roadmaps.
Developed as a part of the Global Environment Facility-funded Aligning Finance Policies project by the Green Finance Platform and UNDP Financial Centres for Sustainability (FC4S), the toolkit will help countries identify a clear picture of financing needs to address sustainable development and the financial system reforms to meet them.
“Countries need to take a tailored approach to develop sustainable finance capabilities depending on their institutional and structural driver of change. This toolkit is about guiding policymakers on how to mobilize those drivers,” said Stephen Nolan, Managing Director, FC4S and Sustainable Insurance Forum.
A significant rise in global green finance measures
The latest figures from the Green Finance Measures Database (GFMD) revealed a 317% growth in the number of green financial measures since the Paris climate agreement was adopted in 2015.
The Green Finance Platform has been closely monitoring the acceleration of policy and regulatory action on sustainable finance and mapped 784 measures in total across 109 countries, adding 100 new measures and nine new countries to its database in 2022. Many of the new measures focus on mobilizing investment and echo the importance of climate-related disclosure and reporting in line with international standards.
Together with the Sustainable Finance Diagnostic Toolkit, the GFMD is an essential tool for countries to benchmark green finance regulatory landscape across jurisdictions and replicate green finance standards and norms.
“The increased use of the transparent and integrated database consists of national and sub-national policy and regulatory measures on sustainable finance will help countries learn from global best practices and innovative financing mechanisms, which is needed to accelerate the pace of transformation towards a low-carbon, resilient and inclusive economy,” said Asad Naqvi, Head of Secretariat, Green Growth Knowledge Partnership (GGKP).
Strengthening connections within the international sustainable finance ecosystem
Since the beginning of 2022, the Green Finance Platform, through the GEF-funded Aligning Finance Policies project, has been working with six countries – China, India, Kazakhstan, Mexico, Mongolia and Nigeria – to progress national sustainable finance roadmaps.
Each country has developed a roadmap with a unique sustainable finance focus, tailored to the country’s financial system priorities and needs. The Green Finance Platform has supported national and global financial actors to facilitate the discussion on these roadmaps to ensure the interoperability of approaches to tackle the current fiscal market fragmentation in terms of green finance policy.
This includes a three-part webinar series that highlighted green financing instruments to address gender inequalities, monitoring and disclosure framework for financial institutions, and ultimately developing and implementing a sustainable finance roadmap. Experts also provided insights via op-eds spotlighting each country’s sustainable finance landscape, which fed into the sustainable finance community discussion on the Green Forum.
Looking ahead to 2023
Marking the end of 2022, the Green Finance Platform is working with 37 knowledge partners, which includes leading financial think tanks and institutions active in specific areas related to sustainable finance.
With its set of practical tools and activities, the Green Finance Platform looks to continue increasing awareness of the risks and opportunities for the global financial sector and promoting tools and knowledge that help lead the development of green and sustainable finance.
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