Sustainable Finance
Sustainable finance refers to the consideration of sustainability issues by private and public actors. Sustainable finance is thus a cross cutting issue of different policy areas, including budgetary, financial, industrial, and economic policies, as well as sustainability, nature conservation, and climate mitigation policies.
The world needs to respond to the emergencies of climate change and the extinction of species. This entails a comprehensive socio-ecological restructuring to achieve greenhouse gas neutrality and a sustainable economy. Sustainable Finance has a key role to play in this transformation.
The transformation will fundamentally change economic structures and their production and consumption patterns. The financial system leverages change as a provider of capital for the real economy. For example, it provides companies with financial capital in a relatively easy and cheap manner. Sustainable Finance requires sustainability definitions and transparency regulations in line with systematic scientific standards. Sustainable Finance activities at Germanwatch promote these concerns with a focus on German, European, and international Sustainable Finance strategies. Germanwatch as a civil society organisation working on environmental and development issues contributes to the political and economic processes necessary for transformation.
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Aktuelles zum Thema "Sustainable Finance"
The emerging polycrisis is challenging governments and institutions around the world. Especially countries in the Global South lack the financial capacity to address the current challenges and simultaneously prepare their nations for the impacts of climate change. The existing international financial architecture has so far been unable to provide the necessary financial resources.There are three major reform proposals that address different institutions within the international financial architecture. This primer introduces the proposals presented and provides an overview of the main institutions and actors involved in the process in Germany.
A ‘race to the top’ or global crawl? Despite global climate negotiations at COP27 and the G20 inching far too slowly towards the financial transformations we need to tackle climate change, country-level progress is being made. A common framework would help track that progress.
One of the three main goals of the Paris Agreement is to ‘make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development’, as stated in Article 2.1c. This long-term goal recognises that, complementary to an increase in finance that supports climate action, there needs to be redirection of finance, both public and private, that locks countries into a future of low emissions and higher resilience. Given that Article 2.1c has yet to be fully operationalised, this case study examines the progress towards implementing it in Germany. It is a first attempt to provide a comprehensive analysis framework for the implementation of Article 2.1c.
At the forthcoming G7 Ministerials this week and next, Germany should push for stronger joint efforts to exit international fossil fuel financing. Considering the latest IPCC findings and the urgent need to stop investment in coal, oil and gas, the financial activities of public finance institutions (PFIs) play an important role to achieve the goals of the Paris Agreement. This paper analyses the alignment of German and Korean PFIs’ climate and sector strategies with the Paris Agreement and makes recommendations on how their strategies can align with a 1.5°C goal.
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