This is the first year that green finance is an integral part of the G20 agenda which gathered Finance Ministers and Central Bank Governors on July 23-24 in Chengdu, China.
The Green Finance Study Group (GFSG), which counts more than 80 participants from all of the G20 nations, as well as invited countries and international organisations, was created with the support of the United Nations Environment Programme (UNEP) and co-chaired by China and the UK.
At the G20 meeting, stakeholders were able to come to a consensus on a Communiqué affirming the focus of the G20 Green Finance Study Group (GFSG) on green finance.
The G20 Finance Ministers and Central Bank Governors Meeting Communiqué states:
“We recognize that, in order to support environmentally sustainable growth globally, it is necessary to scale-up green financing. We welcome the G20 Green Finance Synthesis Report submitted by the Green Finance Study Group (GFSG), and welcome the voluntary options developed by the GFSG to enhance the ability of the financial system to mobilize private capital for green investment. “
“We believe that efforts could be made to provide clear strategic policy signals and frameworks, promote voluntary principles for green finance, expand learning networks for capacity building, support the development of local green bond markets, promote international collaboration to facilitate cross-border investment in green bonds, encourage and facilitate knowledge sharing on environmental and financial risks, and improve the measurement of green finance activities and their impacts.”
In his words, Ma Jun, Chief Economist of the People’s Bank of China, ‘promoting the consensus of developing green finance internationally is a key objective of the G20 GFSG and financial leaders have realized the necessity and feasibility of developing green finance through various financial instruments, policies, and mechanisms’
In the last few years, China has shown interest in green finance and green credit represents 10% of the balance of total loans, making the country the largest green bond market in the world.
At previous meetings, the GFSG compiled the G20 Green Finance Synthesis report, which demonstrates the need for developing global green finance and suggests seven voluntary options to cope with the challenges that prevent the uptake of green finance.
Other countries have also started green finance plans, notably Brazil, Indonesia, Kenya and Sweden.