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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 Galleti, Italian Minister of Environment, Land and Sea

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 meeting in Bologna.

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).

Nadelini, Righi and Rebeschini: three photojournalists from Bologna portray the climate change consequences through photos taken in every single part of the planet. The book was presented during the All4TheGreen week held in Bologna.

The book “Il Mondo Trasformato [The Transformed World]” compiles 33 images of the world and, specifically, the Emilia Romagna region in Italy, describing climate change. It is the result of an emotional journey that started on the Hurricane Mitch that affected the center of America in 1998, and it continued with the 2005 tsunami in Sri Lanka. The book also describes the environmental catastrophes that happened in Emilia Romagna.

Looking at these images, you can understand the absolute power that humankind has protecting or destroying the environment. In fact, the future of our planet depends on our actions.

"Il Mondo Trasformato" book presentation in Bologna (All4TheGreen)

The book “Il Mondo Trasformato [The Transformed World]” presentation in Bologna included in the "All4TheGreen' week of activities.

The photographers intend to make people aware of the consequences of climate change, to reflect on the subject and ask questions. Informed people are more capable of taking the right decisions. Also, the professionals have also produced a documentary called “Buonasera Clima [Good Morning Climate]," featuring Franz Campi and Federico Taddia, renowned experts on climate change. As said during the book presentation, there were so many external contributions that it allowed them to create a five episodes series available to the public.

The TV show “Buonasera Clima” finished with a Skype call live from the Artic where Simonetta Saliera, President of the Italian Legislative Assembly, was able to connect with CNR (Consiglio Nazionale delle Ricerche) researchers located in the South Pole.

This book presentation happened during the Green Social Festival and created the opportunity to the Legislative Assembly of Emilia Romagna to be part of the #All4TheGreen program presented by the Italian Minister Gian Luca Galletti, regarding the G7 Environment meeting which will take place during this weekend, June 10 and 11.

As said during the event by Franz Campi, “there is a lack of Italian materials that talk about climate change and its consequences." There are also many people who disagree with this topic, as so the video connection with the South Pole aimed to inform people on this issue.

Unfortunately, climate change does exist, and time only worsens this global problem. We have to do more to leave a better future for generations to come. On our point of view, it is necessary to make people aware of the climate change consequences, and to stimulate them to act.

Banner Photo Credits to Leigh Vogel/Connect4Climate