UNEP United Nations Environment Programme [to 24 January 2015]
New Report Identifies Key Innovations to Bridge Sustainable Development Investment Gap
Banks hold the largest pool of global financial assets
Nairobi, 21 January 2015 – A new report released today by the United Nations Environment Programme (UNEP) identifies critical innovations in the US$300+ trillion global financial system, which, if brought to scale, could help close the widening sustainable development investment gap. The report is being launched at the World Economic Forum at Davos – at the outset of what promises to be a momentous year for sustainable development.
Following the financial crisis, increasing focus is being placed on how the financial system can fulfill its underlying purpose to serve the long-term health of the global economy.
The new publication, Pathways to Scale, is the 3rd progress report from the UNEP Inquiry into the Design of a Sustainable Financial System and draws on work across 12 countries and a range of critical sectors such as banking, insurance, investment and securities. A key problem is that financial markets still do not effectively price environmental resources, with the result that the value of natural capital stocks such as clean air, productive soils and abundant water is falling in 116 out of 140 countries across the world.
The Inquiry’s high potential innovations include three major asset pools:
:: Banking: Banking: Banks hold the largest pool of global financial assets (US$139 trillion), and leadership by developing countries such as Bangladesh, Brazil and China in ‘green credit’ regulations points to a new phase in international banking standards.
:: Bond markets: The largest capital market (US$100 trillion assets) and fastest moving theme, with a tripling of ‘green bonds’ issuance in 2014 and the prize of incorporating sustainability factors such as climate risk into routine credit ratings.
:: Institutional investment: With US$93 trillion in assets under management in pensions, insurance and sovereign wealth funds, new investment structures, changes to investor governance and reform of incentives (such as remuneration) could underpin the next generation of sustainable investment.
In addition, the Inquiry has identified growing interest in two cross-cutting policy tools
Central banks’ monetary decisions, including balance sheet policies, could also have potential for marrying stability and sustainability – for example, through ‘green quantitative easing’ – although some measures remain controversial.
‘Environmental stress tests’ could help both financial institutions and financial regulators understand the financial implications of disruptive environmental threats such as natural disasters, chronic air pollution, water insecurity and climate change.
UN Under-Secretary-General and UNEP Executive Director, Achim Steiner, said “if we are to generate truly inclusive wealth then we need a financial system that can efficiently invest in the human, productive and natural capital on which we all depend. What is heartening is the increasing evidence that central bank governors, finance ministries and major investment funds recognize that new ‘rules of the game’ are not just necessary and possible, but can deliver real benefits.”
IPBES Forges ahead with its Mission to Assess the Planets State of Biodiversity and Ecosystems
Green light for strategic partnerships and stakeholder engagement, and adoption of a policy addressing conflict of interest
Bonn, Germany, 19 January, 2015 – The Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES), which was created to provide policymakers with reliable, independent and credible information on the status of biodiversity, agreed today to initiate a set of regional assessments in Africa, the Americas, Asia and the Pacific, and Europe and Central Asia. These assessments will be a vital contribution for a planned global assessment to be completed by 2019.
Around 700 delegates from over 270 governments, scientific organizations, civil society and the private sector attended the Platform’s third meeting, which was held from 12 to 17 January in Bonn, Germany. IPBES Member States present at the meeting adopted a conflict of interest policy and a stakeholder engagement strategy that will support the implementation of the Platform’s work programme and approved the guidance on strategic partnerships and other collaborative arrangements. Further Resources
The Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES)