Over 10 of the world’s leading financial centres agreed to promote strategic action on green and sustainable finance, at the first-ever international meeting of financial centres, held in Casablanca last week.
Financial centres including Astana, Casablanca, Dublin, Hong Kong, Milan, London, Luxembourg, Milan, Paris, Qatar, Shanghai and Stockholm backed the Casablanca statement, agreeing to harness their expertise to drive action on climate change and sustainable development.
Financial centres are key locations in the economy where banking, investment and insurance markets are concentrated. This clustering of skills now needs to be focused on mobilizing the green finance required to deliver environmental benefits to implement the Paris Agreement on climate change and the UN’s Sustainable Development Goals.
Sustainable finance looks more broadly at environmental, social and governance (ESG) factors in both market practice and policy frameworks for banking, capital markets, investment and insurance.
The investment required to bring sustainable development and climate action in developing countries amounts to US$2.5 trillion each year, with as much as 10 times that needed globally in the years to come – mainly from private sources.
Commenting on the new network, Sir Roger Gifford, Chairman of the City of London Corporation’s Green Finance Initiative said:
“London is committed to working with other financial centres to grow the global market for green finance. This new network can help leverage the world’s capital markets in pursuit of climate change mitigation by sharing best practice and agreeing on common principles.”
A growing number of financial centres have introduced dedicated green and sustainable initiatives to seize this opportunity. This year’s G7 in Italy also identified the potential for cooperation among financial centres through a new international network.
By supporting the Casablanca statement, the financial centres have agreed to launch the international network of financial centres for sustainability. This network will aim to raise awareness, promote common standards, drive innovation and build the vital skills needed for the expansion of green and sustainable finance.
The meeting was hosted by the Casablanca Finance City Authority (CFCA) and the UN Environment Inquiry into the Design of a Sustainable Financial System, working in association with Italy’s Ministry of the Environment and Morocco’s presidency of the COP22 climate conference.
Said Ibrahimi, CEO, Casablanca Finance City Authority said:
“The leadership and commitment displayed by financial centers gathered in Casablanca gives me confidence that we can increase capital flows to vital areas on the African continent, in sustainable agriculture and clean energy notably. Our vision is to establish Casablanca as a hub for green finance dedicated to Africa.”
The Inquiry into the Design of a Sustainable Financial System was launched by UN Environment to improve the financial system’s effectiveness in mobilizing capital for sustainable development.
Nick Robins, Co-Director of the UN Environment Inquiry said that while financial centres clearly compete, cooperation on sustainable finance was not only essential, it was also very possible.
The new network showed this and has the potential to drive a step change in sustainable finance in the year ahead, he added.
Following on from the Casablanca launch event, which focused on purpose and design, the inaugural meeting of the new network will be held in Italy in early 2018.
Click here to download the Casablanca statement on financial centres for sustainability