News - 23.04.2024

Sustainable Finance Forum 2024: Replay

The planet is burning, and finance has a crucial role in funding technologies that will slow global warming and keep it at an acceptable level. In response to this urgency, financial services players and investors are taking action, moving sustainable finance from a niche to the mainstream. But is it enough? At our annual Sustainable Finance Forum (SFF), we assessed the situation with a significant panel of leading figures in sustainable finance.

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To kick off the discussions, the SFF hosted a prominent guest, Mark Carney, former Governor of the Bank of Canada and the Bank of England, and currently the UN Special Envoy for Climate Action and co-chair of the Glasgow Financial Alliance for Net Zero. Recognised as a significant voice in the fight against climate change, the Canadian economist dedicates his efforts to establishing a sustainable financial system. This new global architecture would involve governments, international financing organisations, and businesses. “But to achieve this, there are three gaps to bridge,” says Mark Carney. “First, to close the climate data gap, we need climate information that is complete, consistent, and widely available. Secondly, every country, city, company, or international institution needs a credible, science-aligned net zero transition plan to fulfil their commitments. Finally, we must address the investment gap to continue the progress of clean energies and further the decarbonisation of heavy-emitting industries.”

A strong and certainly necessary message. Indeed, the new study by the British think tank New Financial, unveiled at the SFF, shows a worrying slowdown in the penetration of green finance in Europe between 2019 and 2023. The figures continue to grow. Over these five years, green capital jumped from €167 billion to €378 billion. However, it had already reached €346 billion in 2021. The penetration rate, which was 5% in 2019, reached 14% in 2022 but fell to 11% last year.

A factor contributing to the disenchantment with sustainable finance lies in the risks of greenwashing associated with it in the absence of international standards. “This is what we are working on within IOSCO; mitigating the risks of greenwashing has become one of our priorities,” confirmed its chairman, Jean-Paul Servais. The International Organisation of Securities Commissions brings together 130 regulators who oversee 95% of the world’s financial markets. In this context, it aims to play a role in harmonising legal frameworks related to sustainable finance. “Collaboration is key to bringing trust to the markets,” summarises Servais. “Therefore, we must be able to offer investors high-quality financial information that can be audited. A single legal framework is the solution we need to work on together.”

Despite the obstacles, sustainable finance is making progress. Many other speakers also shared this sentiment throughout the two days of the SFF, which covered topics such as the role of diversity, inclusion, and equality in ESG, how AI and Fintech are transforming sustainable finance, clients’ expectations, and market responses.

View the full replay here.