The German Ministry of Finance, Bank for International Settlements and OMFIF convened a meeting on how Global Public Investors can help combat climate change. Key topics included:
– Economic and political analysis of status of climate change policies
– Assessment of existing practices and benefits of green finance
– Asset management and diversification
– How to allocate capital to low-carbon investments – the future role of central banks and GPI
Opening remarks were delivered by Jens Weidmann, president of the Deutsche Bundesbank, whose speech on the subject of green finance and the transition to a low-carbon economy can be found here.
Luiz Awazu Pereira da Silva, deputy general manager at the Bank for International Settlements, spoke on 'Green finance: can it help combat climate change?'. He told delegates that the financial sector had the opportunity to play a positive role: mapping and identifying climate change-related risks; strengthening the process of labelling green finance instruments in a rigorous and credible way; and fostering private sector investment in CC-related new technologies. His full speech is available here.
In a keynote speech, Michael Meister, deputy German finance minister, said that it was time to understand that climate change may be as much a matter for financial markets as was the financial crisis. But, he said, more research was needed into the financial risks of climate change as a study in Germany had suggested that the current models and data were not good enough. Read the full speech here.
Philippe Desfossés, ERAFP's chief executive and vice-chair of the Institutional Investors Group on Climate Change, told the seminar, 'ERAFP has a very long-term perspective. The fund is convinced that seeking to make big profits fast undermines sustainable returns, and that it would be very unwise to believe that the crucial issue at stake, namely a shift to a sustainable economy and delayed action in this area, would not affect its assets.' View slides. Read the speech here.
This year marks the 10th anniversary of the first green bond, issued by the European Investment Bank. Leading speakers from the EIB joined the seminar to discuss the bank's experience as a pioneer in the field of climate awareness bonds. Watch a video on the history of these instruments here.
In this context, Joaquim Levy, former finance minister of Brazil and now managing director and chief financial officer of the World Bank Group, emphasised that the utility of green bonds lies in the strong link between their debt characteristics and the long-term investment objectives to be financed.
Directing excess savings from advanced economies towards well-planned, climate-smart infrastructure in developing economies would help increase climate resilience and generate long-term income streams from sustainable growth, thus supporting the climate agenda.
As the largest non-European supranational issuers of green bonds, the World Bank Group’s International Bank for Reconstruction and Development and its International Finance Corporation have been instrumental in providing investment-grade exposure to green projects in developing economies. With the help of international financial institutions, green bonds can also increase the investable universe for institutional investors, with higher returns in a low-growth, low-rate environment. View the slides here.