I4CE and E3G – Third Generation Environmentalism in partnership with the Permanent Representation of France to the European Union held a breakfast meeting to discuss the following issue :
How the EU can mobilise sufficient capital to meet the needs of a sustainable economy, building on that proposed in the European Commission’s Action Plan on Financing Sustainable Growth and the EU Budget post-2020 ?
This invitation-only meeting held under Chatham House rules brought together a select group of MEPs, EU Commission representatives, financial sector actors, and think tanks.
I4CE presented lessons for the EU on how the “greening” of the bond market demonstrates current obstacles to redirecting investment and finance and why a holistic tracking of financial flows supporting climate investment is needed to understand what policy and market levers are efficient towards this goal. This drew on I4CE recent publications on green bonds (available here) and the 2017 French Landscape of Climate Finance report.
From I4CE’s perspective, three key messages from our research were addressed :
- Commission’s Action Plan and legislative proposal must be seen in light of: « greening » the financial sector, without generating a new pipeline of investments, will not necessarily contribute to achieving climate objectives.
- Financial instruments, such as green bonds, have important « informational » roles to play, however an ESG checklist approach to labeling is not appropriate to ensure ‘climate-coherence’ (not to mention ‘Paris’).
- A holistic approach is needed to thinking about investment – and how it is financed – to understand how the financial system can support the low-carbon resilient real economy. I4CE has piloted an approach in France to assist in doing this.
I4CE and E3G will continue the discussion started at this event. The aim is to ensure that the greening of the financial sector’s activities contributes directly to financing European and global climate objectives.
This event and I4CE’s 2018 reports on the green bond market were supported financially by the ClimateWorks Foundation.