The G7 Environment concluded in Bologna after two days of meetings between the ministers of the leading industrialized nations and a number of guest nations.
G7 Environment: “The Paris Agreement is irreversible”
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G7 throws weight behind sustainable finance movement
The G7 today joined the G20, other countries and markets in throwing its weight behind a growing movement to turn the power of the global financial system to sustainable development.
In a communique released at the end of a two-day meeting in Bologna, hosted by Italy, G7 environment ministers – including the US – called increased sustainable financing “fundamental” to the achievement of sustainability and climate goals.
The final statement also saw the G7 pledge continued action on the 2030 Agenda for Sustainable Development, resource efficiency, marine litter, green jobs and climate change. The US backed the final statement, except for the climate action section, which it said it could not sign up to given its withdrawal from the Paris Agreement.
Gian Luca Galletti, Italian Minister of Environment, Land and Sea. Photo Credits: Riccardo Savi/Connect4Climate
“Climate change, the unsustainable management of resources and the pollution of our oceans demand immediate, coordinated action to create a healthy environment capable of supporting our growing populations,” said Gian Luca Galletti, Italy’s Environment Minister.
“This is why Italy asked the G7, for the first time, to look at how to boost the role of the global financial system in sustainable development, and turn trillions of dollars in capital towards green investments.”
Sustainable finance is a rapidly accelerating global movement. Countries from China to France and the UK have launched initiatives to boost flows of private capital for climate and sustainability. The G20 has set up a green finance study group. The value of investment assets committed to the Principles for Responsible Investment is now over US$73 trillion.
Meanwhile, the green bond market almost doubled to more than US$80 billion in 2016, and is expected to increase to US$150 billion in 2017. However, despite this impressive growth, green bonds still represent less than 1 per cent of global bond issuance, point to the need for further action.
UN Environment’s Inquiry into the Design of a Sustainable Financial System is a prominent champion of the movement, which seeks to unlock the finance needed to deliver on the goals of the 2030 Agenda for Sustainable Development and the Paris Agreement. The Inquiry has supported Italy’s G7 presidency over the last year as it explored the potential of sustainable finance.
Catherina McKenna, Minister of Environment and Climate Change of Canada. The 2018 G7 Summit will be held at Le Manoir Richelieu in La Malbaie, Quebec. Photo Credits: Max Thabiso Edkins/Connect4Climate
Canada is next in line to take over the G7 Presidency from Italy. Catherine McKenna, Canada’s Minister of Environment & Climate Change, said they would continue the work, saying it was clear that “the environment and economy went together”, and pointing to how trillions of dollars of financing would create good jobs and grow economies.
According to Nick Robins, Co-Director of the Inquiry, the G7 now has a unique opportunity to quicken the pace of sustainable finance and do just that.
“G7 nations hold the bulk of the world’s financial assets and often lead the pack in terms of making environmental and social factors a core aspect of banking, investment and insurance,” he said. “We need to take this positive momentum to scale, so that finance supports the transition to a sustainable economy, particularly the needs of entrepreneurs and small businesses.”
Robins presented two reports, commissioned by Italy for the G7 and written by the Inquiry, at the meeting. The reports, the findings of which were endorsed in the final communique, outline strategies to ensure SMEs and financial centres are part of the sustainability solution.
“SMEs are the bedrock of the economy in terms of growth, employment and innovation, but often find it hard to find finance for essential investments in sustainability,” said Robins. “What is really exciting is the new range of mechanisms to help close this funding gap.”
SMEs are particularly important in Italy. The Italian economy is dominated by nearly four million SMEs, which make up 95 per cent of all companies.
The big task is to improve access to tailored financial services, both for SMEs wishing to improve their sustainability performance and those providing goods and services for the growing green economy (such as clean-tech pioneers). UN Environment’s first report, Mobilizing Sustainable Finance for SMEs, outlined practical ways of making progress.
For example, public finance institutions such as France’s BPI are offering low-interest loans to SMEs to improve energy efficiency. Canada’s BDC has launched venture capital funds for clean-tech innovators. In the US, state-level green banks are crowding in private capital in California, Connecticut, Hawaii, New Jersey, New York and Rhode Island.
In Germany, the GLS Bank has led a financing partnership for green entrepreneurs. The Borsa Italiana is promoting green “mini-bonds”, which enable small businesses to raise capital from investors. Innovations in financial technology can also help through crowdfunding for the green economy, for example, by UK investment firm, Abundance.
G7 Environment Ministers met in Bologna, Italy, this past weekend. Photo Credits: Riccardo Savi
The Inquiry’s Financial Centres for Sustainability report found that the G7 and other countries could encourage their financial centres to develop strategies that scale up green and sustainable finance – including through international cooperation that would create “a race to the top”.
“In financial centres, the supply and demand for finance come together and action to connect finance and sustainability becomes tangible.” said Robins. “Over the past year, some G7 financial centres (such as Frankfurt, London and Paris) have launched green and sustainable finance initiatives, but there is still huge scope for improvement.”
Environment World Leaders gather for the traditional group picture in Bologna, Italy. Photo Credits: Max Thabiso Edkins/Connect4Climate
Working with UN Environment, Italy’s Environment Ministry made the G7 meeting climate neutral, offsetting all greenhouse gas emissions (estimated at around 250 tonnes of carbon dioxide) through the Clean Development Mechanism. The emissions credits used for the meeting support project in Bangladesh (solar energy), Pakistan (renewables) and Rwanda (Fluorescent lamp CFL distribution).
Faith leaders unite around a shared commitment to protect the Planet and combat climate change
All4TheGreen opened its fifth day, June 9, with the final High School Game, a student competition designed to stimulate climate literacy as a foundation for creating more conscious and responsible citizens.
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#Invest4Climate Inspiration to unlock financing for climate action
During the 2017 Spring Meetings of the World Bank Group and the International Monetary Fund (IMF) the panel discussion “Unlocking Financing for Climate Action” sent an inspirational message. The question was how to mobilize the trillions of dollars in private and public investment needed to ensure that the world meets the Paris Climate Change Agreement’s aim of keeping a global temperature rise this century well below 2 degrees Celsius.
The high level-panel featured the President of the World Bank Group, Jim Yong Kim, the Former Vice President of the United States and Chairman, Al Gore, the Mission2020 Convenor, Christiana Figueres, the Founder and Chairman of Skoll Foundation, Jeff Skoll, the Minister of Finance of Sweden, Magdalena Andersson, the UNEP Executive Director Erik Solheim, and it was moderated by the journalist Ghida Fakhry. To a capacity audience at the World Bank headquarters the overall message was one of optimism, that it is possible to tackle climate change by raising the necessary finances.
Jim Yong Kim, President of the World Bank Group. Photo Credits: Max Thabiso Edkins/Connect4Climate
Reemphasizing the World Bank’s efforts as the largest funder of climate-related action, President Kim emphasized that climate change is one of the great issues of our time. There are trillions of dollars waiting for more lucrative returns, $8.5 trillion in negative interest rate bonds, $24.5 trillion in very low-yielding government-type bonds and a further $8 trillion in cash, and these could shift towards financing climate action. "Quite apart from what you think about climate change, there are opportunities for investments that will give you higher yield than any of those investments in which over $40 trillion is sitting right now," Jim Kim said.
New climate policies were discussed, in particular Kim supported the notion of putting a price on carbon: “If you don’t have a price on carbon you are going to be behind, because the incentives for innovation in some of the fastest growing fields for the future will not be there in your country.” Sweden stands out as an exemplary country that has experienced high growth with a high price on carbon.
[Left to right] Jim Yong Kim, President of the World Bank Group; Al Gore, Former Vice President of the United States, Chairman, The Climate Reality Project; and Christiana Figueres, the Mission2020 Convenor. Photo Credits: Max Thabiso Edkins/Connect4Climate
Al Gore emphasized that he is optimistic with regards to dealing with climate change: "There is no doubt in my mind that we will solve the climate crisis." Pointing to the importance of a sustainable revolution, the Former Vice President of the United States made sure to highlight the importance of urgency: "How quickly we win this” is determined by how much finance can be leveraged. He emphasized that there is already a lot of momentum pushing climate solutions: “Solar jobs in the US are now growing seventeen times faster than jobs in the US in general.”
“It is now clear that we are in the early stages of a sustainability revolution that has the scale and magnitude of the industrial revolution, but the speed of the digital revolution. Business and industries worldwide are retooling in order to be competitive. They are using the new digital tools, including the internet of things, and they are finding ways to boost productivity and profits, even as they sharply reduce emissions,” Al Gore underlined that we are at an inflection point in history.
An engaged audience followed the high-level discussion at the Preston Auditorium, World Bank Headquarters, Washington, D.C. Photo Credits: Max Thabiso Edkins/Connect4Climate
To an inspired audience Christiana Figueres, recalled that “the world is bringing more and more solutions,” stressing the need of shifting people’s mindset in order to move forward towards a sustainable future. According to Figueres it is absolutely critical to focus on a green economic growth to accelerate climate action. “Thinking that climate action is expensive is so five minutes ago,” said the former Executive Secretary of the United Nations Framework Convention on Climate Change.
Magdalena Andersson presented the Swedish experience in support of climate action, explaining how carbon taxes made her country “more attractive for investment in clean energy and in the environment” resulting in better job rates and an increase in its economic growth.
Magdalena Andersson, the Minister of Finance of Sweden. Photo Credits: Max Thabiso Edkins/Connect4Climate
Complementing Magdalena Andersson’s perspective, the UN Environment Programme Executive Director Erik Solheim stressed that investors believe in a sustainable future, but there is, still an important question to be answered: “How can we regulate the market so they go green? What will it take for the financial market to go green?”
With a personal intervention, Jeffrey Skoll from a private sector perspective emphasized that the energy revolution is speeding up. “We are within a year and half of the next generation of batteries, that will be a fraction of the cost, with far more storage,” he emphasized, also noting that renewables “are at price parity, or better, than the cheapest of the fossil fuels.”
The high-level panel discussed how to unlock financing for climate action. Photo Credits: Max Thabiso Edkins/Connect4Climate
The inspiration throughout the discussion was noticeable, as expressed by Erik Solheim: “There is every reason to be a global optimist.” Christiana Figueres underlined that the discussion is actually about “unlocking financing for economic growth that, by the way, has climate benefits…This is the story of growth of this century.”
In closing Jim Kim reminded the Spring Meetings audience why climate action is so urgent: “We must protect a planet that we and our children and grandchildren deserve to live in.”
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#All4TheGreen: Italy as a leading player
After the successful opening day of the #All4TheGreen week, which concluded with the impressive concert of Ezio Bosso in Piazza Maggiore, with a clear message asking the audience for climate action underlying the importance of the environment, day two kicked off with a discussion between a network of Italian universities and G7 delegates for sustainable development.
The day was filled with interviews with distinguished speakers, including Rossella Muroni, President of LegAmbiente, Lamberto Mancini, Director General of Touring Club Italian, and engaging dialogues between the Italian Environment Minister Gian Luca Galletti and master’s students from IULM University of Milan.
Rossella Muroni from LegAmbiente talked about the importance of raising awareness on climate change claiming that this issue is everybody’s responsibility. Muroni also stressed that innovation and green technology can play a role in the transition to a more sustainable world.
Lamberto Mancini explained how the theme of sustainability is at the core of Touring Club Italia. Why? Thanks to the action taken by Touring Club Italia of carefully mapping the Italian territory and putting road signs across the country, they are attributing value to the Italian countryside and delivering an enriched and sustainable environment to future generations.
The interviews were rounded up with an engaging discussion between Gian Luca Galletti, Italian Environmental Minister, and the master’s students from IULM University of Milan about the role of Italy as a leading player in the action against climate change, not only as the host country for the G7 Environment but also serving as a country model for other international players. The Minister informed that Italy invested 11 billion euros over the past three years in renewable energy. “We truly believe that in today’s economy, profits go side by side with sustainable business solutions”.
Last but not least, Piazza Maggiore once again became the closing stage of the All4TheGreen day with the screening of the inspiring documentary Racing Extinction, by the director Louie Psihoyos.
Racing Extinction, directed by Louie Psihoyos, projected on the biggest outdoor screen in Europe powered by solar energy on June 6. Photo Credits: Max Thabiso Edkins/Connect4Climate
Spectators had the unique opportunity to enjoy a special edition of the documentary, with a brand-new ending using the projections created by Connect4Climate for the 2015/2016 Jubilee of the Vatican in order to stress the importance of taking action against climate.
Recap of the breathtaking art projection on St. Peter's Basilica, Vatican, for the 2015/2016 Jubilee of the Vatican. Photo Credits: Riccardo Savi/Connect4Climate
Stay tuned for more exciting #All4TheGreen events!
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