Green Finance Summit 2018, 17 July 2018, London

Agenda  Video content

The second Green Finance SummitMainstreaming Green Finance, sponsored by Amundi, Carbon Delta AG and Green Investment Group took place on Tuesday 17 July 2018. The City of London’s Green Finance Initiative’s flagship event showcased the latest in green financial policy, market developments and thought leadership.

Drawing on the theme of Mainstreaming Green Finance, this timely event convened 600 hundred delegates to hear from a cross-section of industry experts and policy-makers in the green finance sphere. Highlights include: The Rt Hon The Lord Mayor, Alderman Charles Bowman; John Glen MP, Economic Secretary to the Treasury; Sean Kidney, Climate Bonds Initiative; Lord Stern, LSE Grantham Research Institute; Nick Bridge, FCO and Julian Critchlow, BEIS. At the Summit the Chartered Banker Institute launched the world’s first Green Finance Certificate and the Green Finance Initiative announced the new Green Finance Institute Advisory Group members.

 

Tackling the climate change challenge requires global collaboration across sectors, cities, financial centres and governments.  With the global green finance market going from strength to strength and moving up the political agenda. How do we mainstream green finance – making it better, more accountable, and responsible?

The transition to a low-carbon economy is achievable and full of opportunities – green finance is key to making it happen.

At the Summit, the Economic Secretary to the Treasury outlined his vision for the future of green finance – sustainable, mainstream and culturally embedded, “My vision for the next twelve months and beyond is an explosion of the momentum to the point where ‘green finance’ becomes simply – ‘finance’.”

The first panel chaired by Jessica Fries, A4S explored the commitment and progress of the TCFD recommendations. Bringing climate-related disclosures into the mainstream requires a long-term strategy needs and climate risks need to be incorporated into normal disclosures.

Sean Kidney, CEO of Climate Bonds Initiative spoke about climate change, green bonds and an agenda for the future. In climate change terms it is the next five years that are important; we need to act now to address the solutions. What are the solutions? Capital solutions, infrastructure solutions and technical solutions. The global green bond market is exceeding expectations and inspired sovereign green bond issuance. These trends and next steps require ambition and planning to scale up and finance the climate change solutions. Sean called upon bankers and financiers to bridge the gap between capital and the demand for green.

The second panel chaired by Peter Cripps, Environmental Finance explored green infrastructure financing, examining the investment case for green energy and infrastructure, barriers to capital flows and how global governments and investors can facilitate green infrastructure development and financing. The challenge is how we get the private sector to invest at the scale needed – US$93trn in the next 15 years? Renewables and transport are part of the solution to reach a net zero carbon world.  As pioneers in infrastructure investment, Macquarie’s perspective is that renewables investment has reached escape velocity. Going forward we will see subsidies and government interventions reduced; PPAs will increase; plus, standardisation and reporting has a huge role here to be accountable to investors. There’s a role for development financing and for other Green Investment Bank initiatives across the world.

The panellists agreed that what is key is mobilising third-party capital and building the bridge to project pipelines. This is where financial centres, issuers can work more closely with bankers, asset managers and investors to bridge the gap. Amundi for example draw upon their bespoke solution with IFC for long-term investments for institutional investors in emerging markets.

Lord Stern addressed the economics of climate change touching upon the urgency, growth story of the 21st century and the role of policy and finance. Sustainable infrastructure is at the core of policy. To set the scene: infrastructure doubles in the next 15 years; the world economy doubles in the next 20 years and the population of our cities doubles in 40 years. Developments in the next 20 years are crucial and we must cut emissions by 30% to reach the Paris targets. Remarkable change has happened but change needs to be intensified. Development banks have a great deal to offer to finance the new global agenda. Three forces present us with a great opportunity to really deliver on the global agenda – low interest rates, technological advances, political direction.

 

Nick Bridge outlined the UK efforts in an international context. The international framework exists that recognises the need to make the shift in the global economy. Now the task is to mainstream this into the financial eco-system. The UK is the first country to have ‘climate diplomacy’; first country to have a green investment bank and pioneer the shift in green finance.

The final afternoon session focussed on leadership in global green finance with panellists from Mexico, Brazil, Japan, France and India addressing how nations, financial centres and other institutions demonstrate commitment and are stepping up actions in green finance. We heard what is happening in individual markets and then the panel discussed international cooperation.

  • Mexico is looking at role of the Government, financial authorities, development banks, commercial banks and financial institutions. Looking at support from UK, Germany and France and how to incentivise private sector participation.
  • Brazil has successful green bond issuances mainly in the energy sector. Other initiatives that demonstrate collaboration with the Green Climate Fund and multilateral level. Looking across the financial system in Brazil.
  • DJB has been issuing green and sustainability bonds for last 4 years. The Japanese market is gaining more activity in green finance and the market is certainly growing – many corporates are now issuing green bonds. The drivers are pressures from investors, ESG in investment decisions and market forces; awareness raising for example the Japanese version of Green Bond Principles. Japan will host G20 next and will be another driving force to accelerate green finance.
  • India’s ambition and vision in the renewable energy space – it has doubled in the last four years from 35,000 megawatts now it’s 70,000 megawatts. The government is providing much thrust behind this agenda. India is successfully raising money on the international bond market.
  • France has a particular responsibility and Paris as a financial centre is looking at financing for tomorrow. A strong eco-system exists and strong partnership between government and private players. Article 173 has led to a shift in the relations and has fostered greater competition. France’s issuance of sovereign green bond has really set the base and now momentum is needed to keep the green revolution going.

To conclude Julian Critchlow, BEIS closed on why green finance is an area of expertise and priority for the UK. The GFI is a great cross-sector platform for collaboration. UK ambition to transition cleaner and greener economy. We are now ten years since the Climate Change Act. Clean growth is at the heart of the Industrial Strategy to remain at the forefront of the global transition to a low-carbon economy. To this end Green Finance is essential.

Silver sponsor:

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  Media partner:

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