Global Climate Action Summit: what progress on climate finance?
The Global Climate Action Summit (GCAS), organized by the State of California from the 12th to the 14th of September, brought together “non-state actors” from around the world – including representatives from states and provinces, regions, cities, businesses, financial institutions and civil society. Its slogan of ‘Taking Ambition to the Next Level’ made clear the objective of the Summit: to demonstrate the commitment and engagement of non-state actors as a means of convincing governments to “step up” and revise their national climate policies, as needed to achieve the objectives of the Paris Agreement.
The panels and side-events surrounding the Summit showcased action on a wide range of topics – however the topic of finance and investment garnered particular attention as the ‘backbone’ needed to achieve shared climate objectives.
A stocktake of climate action in the financial sector and support for subnational climate action
On one hand, in line with the objectives of the Talanoa Dialogue Stocktake process, financial institutions aimed to demonstrate their contributions to date to climate action – particularly in terms of support for subnational climate action. For example, a Joint Statement issued by the Supporting Institutions of the Climate Action in Financial Institutions Initiative highlighted 40 other concrete commitments, facilities, programs or project to support access to finance for climate action for subnational actors. While capturing only a cross-section of what the financial community is doing, the Statement presents clear examples that other financial institutions can learn from to support this agenda.
New calls to action and programs that have the potential to produce real world changes
On the other hand, a number of institutions and initiatives took the opportunity to launch new programs and commitments demonstrating a continued push for increased ambition. Calls to action such as the Investor Agenda, the 1% Challenge and the Green Bond Pledge appear to be strategic steps to frame climate action in the language of the financial sector, pointing to the increasing reality and real-world impact of climate risks as a ‘material’ reason to act. The importance of the climate risk focus was reinforced by the release of PRI’s new report citing an ‘inevitable policy response’ to climate change that both economic actors and the financial community must take on board today.
The launch of new facilities and instruments, such as the Global Green Bond Partnership, demonstrated that we can use of the tools we already have to scale-up investment. It aims to facilitate the access of local actors to the green bond markets by combining technical assistance, capacity building, de-risking, investing, and underwriting support. This is important as it addresses what I4CE and others have seen as a principal weakness of the green bond market to date: the labelling of green of investments that would have occurred in any case. By helping new entities to use bonds better and more effectively to finance their investments, the program has the potential to demonstrate how to go beyond ‘green labelling’ to generate new and additional climate investments.
Are those actions at the scale needed to achieve the Paris Agreement objectives?
While GCAS should be hailed as a success, clearly demonstrating the engagement and commitment of non-state actors, the question remains of whether the ‘momentum for change’ will be sufficient to push governments to act. In the run up to COP24, two events this fall will be key to assess recent progress and efforts remaining to align financial flows with the objectives of the Paris Agreement: the second edition of the One Planet Summit on the 26th of September in New York; and the UNEP FI Global Roundtable and the Climate Finance Day organized back-to-back at the end of November.