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1、ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONBUILDING BLOCKS TO IMPLEMENT IGF INITIATIVES AND POLICIES SPECIAL REPORTIn partnership with:2ROADMAP FOR INCLUSIVE GREEN FINANCE(IGF)IMPLEMENTATIONEXECUTIVE SUMMARY3IINTRODUCTION5IISCOPE AND BACKGROUND81.Individuals and MSMEs in Focus92.Financial Inc

2、lusion&Sustainability Two Sides of the Same Coin10IIIONE SIZE DOES NOT FIT ALL111.IGF Framework as Defense of the Public Good122.Towards Double Materiality133.The Costs of Doing Nothing13IVBUILDING A HOLISTIC APPROACH TO IGF15Strategy17Prioritization22Classification23Ecosystem25Infrastructure29Data&

3、Models30VPOLICY TOOLS33Advocacy for IGF34Education and Capacity Building35Financial Incentives36Voluntary Standards&Recommendations39Mandatory Regulations41VICHALLENGES OF IGF POLICY APPROACHES 441.Challenges Relating to Specific Building Blocks452.Overarching Challenges46VII CONCLUSIONS47REFERENCES

4、 50ANNEX53 2022(November),Alliance for Financial Inclusion.All rights reserved.CONTENTSACKNOWLEDGMENTSThis special report is a product of the Inclusive Green Finance Working Group(IGFWG)and the University of Luxembourg.AFI sincerely thanks IGFWG Subgroup Leaders Sameh Sawafta(Palestine Monetary Auth

5、ority)and Kabinda Kawesha(Bank of Zambia)and the Subgroup members:Golam Sarowar(Bangladesh Bank),Jeanne Nsavyimana(Banque de la Rpublique du Burundi),Cristian Vega(Superintendencia General de Entidades Financieras de Costa Rica),Walid Ali(Central Bank of Egypt),Marisela Rivas(Banco Central de Reserv

6、a de El Salvador),Tanele Ndlangamandla(Central Bank of Eswatini),Prudence Mnisi(Ministry of Finance Eswatini),Patience Yeboah-Nkansah(Bank of Ghana),Khaled Hamdan(Central Bank of Jordan),Monica Arwings(Retirement Benefits Authority of Kenya),Ayudhaida Sulaiman(Bank Negara Malaysia),Mariyam Najeela(M

7、aldives Monetary Authority),Temuulen Khurelsukh(Financial Regulatory Commission of Mongolia),Najwa Mouhaouri(Bank Al-Maghrib),Julio Nhantumbo(Banco de Moambique),Postrick Mushendami(Bank of Namibia),Paul Oluikpe(Central Bank of Nigeria),Albert Mokis Ahabh(Bank of Papua New Guinea),Muhammad Elobead(C

8、entral Bank of Sudan),Maltie Kishna(Centrale Bank van Suriname),Saikou Kassama(Banco Central de Timor-Leste),Abro Ximenes(Central Bank of Timor Leste),Hannington Wasswa(Bank of Uganda),and Andrew John(Reserve Bank of Vanuatu).Special thanks to AFI members who contributed to country cases:Golam Sarow

9、ar(Bangladesh Bank),Walid Ali(Central Bank of Egypt),Najwa Mouhaouri(Bank Al-Maghrib),Ayudhaida Sulaiman(Bank Negara Malaysia),Oluikpe(Central Bank of Nigeria),Sameh Sawafta(Palestine Monetary Authority),and Rhodora Brazil-De Vera(Bangko Sentral ng Pilipinas).This special report was a joint initiati

10、ve between a team of authors coordinated by the ADA Chair in Financial Law(Inclusive Finance)at the University of Luxembourg with support by ADA and the Directorate for Development Cooperation and Humanitarian Affairs of the Ministry of Foreign and European Affairs of the Grand-Duchy of Luxembourg,a

11、nd the Alliance for Financial Inclusion(AFI)Inclusive Green Finance Working Group(IGFWG),supported by the German Federal Ministry for Economic Affairs and Climate Action(BMWK).The report was written by Prof.Dr.Dirk Zetzsche(ADA Chair in Financial Law-Inclusive Finance,University of Luxembourg),Prof.

12、Dr.Ross P.Buckley(KWM&KPMG Law Chair in Financial Disruption,UNSW Sydney),Prof.Dr.Douglas W.Arner(Kerry Holding Professor in Law,University of Hong Kong),Johanna Nyman(Head of Inclusive Green Finance),Laura Ramos(Policy Manager,Inclusive Green Finance)and Jeanette Moling(Policy Specialist,Inclusive

13、Green Finance).The authors are grateful for comments provided by Prof.Daniel Schydlowski,Prof.Michael Halling,Dr.Mathilde Bauwin,Dr.Marco Bodellini,Areti Kolovou Nikolakopoulou,and Marian Unterstell.We would like to thank our partners and donors for generously contributing to the development of this

14、 publication.AFIs Inclusive Green Finance workstream is part of the International Climate Initiative(IKI),supported by the German Federal Ministry for Economic Affairs and Climate Action(BMWK),based on a decision by the German Bundestag.Baobabs trees,Madagascar.(ANTITES/iStock)ADA CHAIR IN FINANCIAL

15、 LAW(INCLUSIVE FINANCE)The ADA Chair in Financial Law(Inclusive Finance)at the Faculty of Law,Economics and Finance of the University of Luxembourg benefits from support provided by ADA(Appui au dveloppement autonome),a Luxembourg non-governmental organization focused on strengthening the autonomy o

16、f vulnerable people in Africa,Central America and Southeast Asia with inclusive finance since 1994,as well as the Directorate for Development Cooperation and Humanitarian Affairs of the Ministry of Foreign and European Affairs of the Grand-Duchy of Luxembourg.3ROADMAP FOR INCLUSIVE GREEN FINANCE IMP

17、LEMENTATIONThis special report,which identifies IGF as a subset of sustainable finance,shows that a successful IGF framework rests on six Building Blocks,identifies policy tools to further advance the framework,summarizes the related challenges,and provides recommendations for IGF policy implementat

18、ion.Each country has specific climate-related challenges and financial objectives;therefore,the preferable pathway depends on the countrys context,priorities,size of its banking sector,availability and readiness of credit financing schemes,significance of its capital markets,level of development of

19、its digital retail payment system,and market size of its digital financial services(DFS).IGF,which focuses on individuals and micro,small and medium enterprises(MSMEs),two groups to which financial inclusion provides the broadest societal benefits,describes a coherent holistic policy supporting both

20、 financial inclusion(as a social goal)and adherence to environmental factors.However,IGF involves more than just access to financial services,regulators must focus on the valuable use of these services and how they benefit individuals and MSMEs.EXECUTIVE SUMMARYInclusive Green Finance(IGF)is an emer

21、ging policy priority,championed by central banks and financial regulators in the AFI network to help mitigate,and build resilience to,the negative impacts of climate change and biodiversity loss.AFI member institutions agree that policies must address climate change without leading to financial excl

22、usion,and that actively promoting financial inclusion as a tool for climate mitigation and adaptation,reduces environmental degradation,as established in the Sharm El Sheikh Accord(2017)and renewed at the Dead Sea(2022).Based on research,international approaches and AFI members experiences,this road

23、map to implement IGF policies(Roadmap to IGF)provides guidance on what central banks and financial regulators can do,on both a small and large scale,to further financial inclusion and enhance climate change resilience in AFI member countries.THE SIX BUILDING BLOCKS OF A SUCCESSFUL IGF FRAMEWORK IDEN

24、TIFIED IN THIS REPORT ARE:REGULATORS MAY DEVELOP AND STRENGTHEN THE IGF FRAMEWORK WITH FIVE POLICY TOOLS:ADOPTION OF AN IGF STRATEGYCLASSIFICATION OF IGFESTABLISHING IGF AS A PRIORITYDATA AND MODELSBUILDING THE IGF ECOSYSTEMBUILDING A FINANCIAL INFRASTRUCTUREADVOCATING FOR IGFCAPACITY BUILDING FINAN

25、CIAL INCENTIVESVOLUNTARY STANDARDS AND RECOMMENDATIONSMANDATORY FINANCIAL REGULATIONS4ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONIGF frameworks require solid,long-term political support driven by a dynamic regulator with devoted expert resources and a strong role in shaping the regulatory fra

26、mework.Depending on the level of ambition relating to the Roadmap to IGF and the need to harmonize with other national and international frameworks,a Roadmap to IGF may consume an amount of regulatory capital that will need to be committed upfront.Regulators will need more of their existing resource

27、s and entirely new types of resources in technology,hard science and data generation.Nevertheless,significant uncertainty remains on to reduce the negative impacts of business activity on the environment while ensuring financial inclusion.The three imperatives of IGF financial inclusion,fostering re

28、silience to and mitigation of climate disaster events,and supporting transformation to a sustainable economy are at times in tension,especially for MSMEs and individuals,and these tensions may not be initially apparent.IGF frameworks will therefore,at times,require quick rebalancing and ad-hoc decis

29、ion-making.Accordingly,dynamic governance systems with the readiness to constantly reassess policy approaches are also needed.Each step will require refinement over time,in proportion to the capacity of regulators and regulated institutions.For instance,members can begin with Sustainable Banking Pri

30、nciples of a more general nature,which can be supplemented in due course with relevant and detailed guidelines or different tools like green lending procedures through the Environmental&Social Risk Management guidelines.Both financial inclusion and climate change concerns differ from country to coun

31、try,and while mutual learning from other countries is essential,the solutions must be country-specific and tailor-made to the necessities of each AFI member.An IGF policy is necessary for two reasons.First,markets are poor at assessing uncertain,long-term risks due to the lack of reliable data regar

32、ding the future trajectory of climate change.Second,the benefits of IGF are primarily societal and long-term,although the long-term consequences of failure will certainly be shown at the individual level as well.As such,both IGF objectives are public goods:individual counterparties do not directly r

33、eap the full benefits from investments in financial inclusion and environmental protection.In the absence of public policy action,private actors tend to under-invest in financial inclusion and environmental protection.Much can be learned from the early approaches to sustainable finance regulation wo

34、rldwide.The European Union is working on a fully-fledged revamp of financial regulation based on double materiality,an approach that factors in both sustainability risks and the impact of financial activities on sustainability factors.Yet it is too early to assess whether these ambitious reforms wil

35、l lead to fundamental changes in economic activity.The EUs approach has focused,to date,on large companies where cost concerns are less important.By contrast,costs in AFI countries deserve particular attention since most will end up as transaction costs typically paid by poorer members of society,wi

36、th clear exclusionary risks.Some AFI member institutions have pursued IGF by issuing Sustainable Banking Principles and ESG-related Sustainable Frameworks.These principles generally comprise risk management requirements,sustainability reporting,and governance requirements.While sustainability risks

37、fall within the logic of traditional credit risk management,the same is not true for the impact of the lending activity of institutions on sustainability factors.Beyond reporting,regulators must actively ensure that these externalities are prioritized within the financial institution under supervisi

38、on.This is particularly the case where an institutions short-term interest in profiting from unsustainable businesses collide with the public interest in protecting the environment long-term.The international discussion is ongoing,specifically for individuals and MSMEs,as to the level of granularity

39、 that is feasible in data collection and risk management.The answer to this question will be country-specific and depend on the level of datafication of the public administration and MSME clients.Bulk and sectoral approaches,similar to international standards for capital requirements and new interna

40、tional sustainability standards,may well be in order.5ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONBy way of the Sharm El Sheikh Accord(2017),renewed at the Dead Sea in 2022,financial regulators and central banks across the AFI network agree that policies must address climate change without lea

41、ding to financial exclusion.5 AFI member institutions have taken a leadership role in developing IGF to address climate-related risks within the financial sector.The dual mission encapsulated by the term“Inclusive Green Finance”is more pressing than ever before.Through effective policies,regulations

42、 and national strategies,IGF is helping mitigate and build resilience against the negative impacts of climate change.6 Financial institutions engaged in IGF provide vital support to those navigating an uncertain environment by promoting green products within savings,credit,insurance,money transfers

43、and new digital delivery channels.7 By doing so,IGF plays a key role in enabling the implementation of the Paris Agreement,nationally determined contributions(NDCs),and the UN Sustainable Development Goals(SDGs).Particularly SDG 1(No poverty),SDG 6(Clean water and sanitation),SDG 7(Affordable and cl

44、ean energy),SDG 11(Sustainable cities and communities),SDG 13(Climate action),SDG 14(Life below water),SDG 15(Life on land),and SDG 17(Partnerships for the goals).8 I.INTRODUCTIONFinancial inclusion and environmental goals may well find themselves in tension.1 For instance,finance may fund technolog

45、ies and processes that harm the environment,such as machinery to log rainforests or chemicals that pollute rivers.At the same time,inappropriate or overdone greening of the financial sector may increase financial exclusion.This is particularly true in a crisis setting:There is a risk that policymake

46、rs,in the wake of a climate-related crisis,become reticent to reach the financially excluded,the majority of whom are women,because directing emergency funds through digital financial networks can be so much more cost-effective than alternative channels.Such behavior would exacerbate existing inequa

47、lities because financially excluded parts of the population are also likely to be those most in need of state support in the wake of a natural disaster.2 Just as there is no real sustainability without financial inclusion,a stable inclusive financial system requires that regulators and economic acto

48、rs take sustainability seriously.Economic growth(inclusive or exclusive,as the case may be)in the absence of sustainable economic conduct results,eventually,in a financial system exposed to sustainability risks and societies suffering from the economys impact on sustainability factors.If financial i

49、nstitutions fail under these circumstances,the vulnerable will suffer far more than the affluent.3 With extreme weather events on the rise around the globe,dealing with climate change and extreme weather conditions(including heat,drought,floods,storms,and rising sea levels)is an ongoing challenge to

50、day in an increasing range of AFI member countries.4 To mitigate these impacts,regulators and businesses are increasingly focused on environmental,social and governance concerns,together with enhancing financial inclusion,supporting digital access,and building financial infrastructure to support mor

51、e gender sensitive crisis resilience,response,and recovery.1 AFI,Inclusive Green Finance:From Concept to Practice,Report,3 December 2020.Available at:https:/www.afi-global.org/publications/inclusive-green-finance-from-concept-to-practice/2 Ibid.3 See,for example,The Economist,“Changing Weather Could

52、 Put Insurance Firms Out of Business”(Sept.19,2019).Available at:https:/ Alfred Hannig,Why Central Banks Care About Climate Change(Mar.27,2020).Available at:https:/ AFI,Sharm El Sheikh Accord:Financial Inclusion,Climate Change and Green Finance(2018).Available at:https:/www.afi-global.org/global-voi

53、ce/maya-declaration/sharm-el-sheikh-accord/.6 Ariff Ali,Climate Change,Financial Inclusion and Inclusive Green Finance(23 December,2020).Available at:https:/www.bis.org/review/r201223d.htm7 World Bank,Gateway to Financial Inclusion(14 November,2018).Available at:https:/olc.worldbank.org/content/gate

54、way-financial-inclusion8 United Nations Department of Economic and Social Affairs,“Goal 1-End poverty in all its forms everywhere”(visited 2022).Available at:https:/sdgs.un.org/goals/goal1;United Nations Department of Economic and Social Affairs,“Goal 7 Ensure access to affordable,reliable,sustainab

55、le and modern energy for all”(visited 2022).Available at:https:/sdgs.un.org/goals/goal7;United Nations Department of Economic and Social Affairs,“Take urgent action to combat climate change and its impacts”(visited 2022).Available at:https:/sdgs.un.org/goals/goal13.6ROADMAP FOR INCLUSIVE GREEN FINAN

56、CE IMPLEMENTATIONThe Sharm El Sheikh Accord on inclusive green finance was endorsed by an overwhelming 94 percent of the AFI membership and updated during the Global Policy Forum at the Dead Sea from 5-8 September 2022.The main updates are as follows:Updating the name of the Accord to Sharm El Sheik

57、h Accord on Inclusive Green Finance Introducing a broader concept of green finance,including environmental degradation and being more precise on the mitigation and adaptation potential of IGF Introducing tangible links between the role of financial regulators and the broader global and national gree

58、n finance and financial inclusion landscapes Introducing a more substantial in-country implementation dimension into the agreement section of the Accord Updating the technical content and wording throughout to reflect current developmentsMAYA DECLARATION COMMITMENTS ON INCLUSIVE GREEN FINANCEAFI mem

59、bers have leveraged IGF policy implementation through their Maya Declaration Commitment to create a conducive environment for IGF initiatives:Bangladesh Bank and Insurance Development and Regulatory Authority Bangladesh:A Sustainable Finance Policy:Has been completed.Central Bank of Eswatini:Develop

60、ing an inclusive green finance policy.Central Bank of Jordan:Issuing a green finance strategy.Bank of Ghana:Launching and implementing sustainable banking principles by 2022.Bank of Zambia:Developing a Bank of Zambia policy and guidelines on climate change and green finance by 2022.Superintendencia

61、de la Economa Popular y Solidaria de Ecuador:Developing the required regulations to implement green loans.Banco Central de Reserva de El Salvador:Updating the National Survey of Access to Financial Services.Reserve Bank of Fiji:Working with partners on developing and promoting sustainable business m

62、odels to support the communitys response to climate change.Bank al-Maghrib:Implementing actions to be undertaken by Bank Al-Maghrib as part of the tripartite“AFI-BAM-CFC”partnership on sustainable finance.Central Bank of Egypt:Issuing guidelines for climate change and green finance to the banking se

63、ctor by 2020.Banco de Moambique:1.Coordinating efforts with relevant sectors to ensure that financial technologies implemented by innovative platforms,business models,products and services are in compliance with green technologies;2.Incorporating actions,during the Medium Term Review of the National

64、 Financial Inclusion Strategy,ensuring that green technologies are accessible and affordable for the entire population.Reserve Bank of Zimbabwe:Creating an enabling environment that encourages sustainable financing(incorporating IGF),specifically,investments in innovation that contribute to a green,

65、inclusive,and sustainable economy which,in turn,encourages,rewards,and fully integrates sustainability principles in financial institutions.The target is 50 percent of banking institutions in Zimbabwe adopting sustainable financing by December 2021.UPDATE OF THE SHARM EL SHEIKH ACCORD ON INCLUSIVE G

66、REEN FINANCESource:Alliance for Financial Inclusion.Farmer working in rural rice fields in Southeast Asia.(Chadchai Ra-ngubpai/Getty images)7ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONThe six Building Blocks describe the preconditions for a successful IGF policy approach.Each of these fields

67、must be well developed to achieve an overall well-functioning IGF system.In turn,regulators seeking to strengthen IGF are first encouraged to assess the economic and social environment,the legal framework as well as the financial institutions within their jurisdiction against the six Building Blocks

68、.A less strongly developed Building Block can then be targeted with further policy action.Once the need for additional policy action is identified,the five tools lend themselves as options on how to strengthen,or initiate development regarding one or several of the Building Blocks.This Roadmap to IG

69、F,which is based on both the research and best practices of AFI members and others internationally,provides the AFI membership,other regulatory and international institutions,government agencies,financial institutions,and researchers,with the current state of IGF knowledge and the policy tools to pr

70、omote an exchange of experiences and mutual learning within the AFI network and beyond.It further identifies policy approaches that positively impact financial inclusion and climate change globally based on an integrated approach that can be transformed into a coherent policy framework.IGF was ident

71、ified as a subset of sustainable finance in this roadmap,which shows that a successful IGF Framework rests on six Building Blocks,describes the policy tools that further the framework,together with a summary of the challenges,and presents useful recommendations for financial regulators and policymak

72、ers.THE REMAINING SIX SECTIONS OF THIS ROADMAP ARE AS FOLLOWS:IIIIIIVVVIVIIDefines the scope of analysis and provides an overview of AFIs existing work on IGF,including a gap analysis.Describes IGFs holistic policy approach,places it within the spectrum of related priorities to financial regulators,

73、and demonstrates why policy action is crucial.By developing the six Building Blocks of an IGF Framework,identifies the state of a countrys financial services sector which policy actions seek to achieve.Outlines the tools which regulators may use to further IGF,including advocating for IGF,capacity b

74、uilding,financial incentives,and“soft law”and“hard law”approaches.Identifies the challenges experienced internationally in implementing IGF approaches.Concludes the report.8ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONTraditional chinese fisherman on river.(jameslee999/iStock)II.SCOPE AND BACKG

75、ROUND9ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONto generate and track,and in many cases,are digitized or automated and responsive to regulatory inquiries.14 This substantial data gap for MSMEs necessitates improving the data-based regulatory approach to IGF.15 Measuring Inclusive Finance Spe

76、cial Report View hereFinancial policymakers and regulators across the AFI network recognize the dual threats of financial exclusion and climate change as key risks to financial stability and sustainable development,and the role of financial inclusion in helping communities build resilience,recover f

77、rom and mitigate losses caused by climate change,while at the same time supporting broader sustainable development.91.INDIVIDUALS AND MSMEs IN FOCUSFor AFI member countries,individuals along with micro,small and medium enterprises(MSMEs)are central to increasing financial inclusion,creating climate

78、resilience,and supporting sustainable development across the SDGs.First,the lack of identification needed to open bank accounts and make payments,and other logistical challenges,exposes individuals and MSMEs(especially women,the poor,digitally excluded and those living remotely)to the greatest risk

79、of financial exclusion.10 Further,financially included and excluded populations are vulnerable to climate disaster hazards in the absence of adequate environmental and climate change adaptation capabilities.MSMEs generate the majority of growth,innovation and employment in most economies,including d

80、eveloping countries.11 From a climate change perspective,emissions generated by individuals and MSMEs can be much lower than those by large companies,yet these emissions are mostly dispersed and decentralized,and therefore,more difficult to measure and govern by environmental laws and regulations,es

81、pecially as the majority of MSMEs are in the informal sectors and outside the reach of most laws and regulations.12 Additionally,if they cannot include adaptation and mitigation initiatives into their own operations,MSMEs will face difficulties once there are mandatory regulations and laws regarding

82、 climate response initiatives.In turn,indirect ways to steer the economic conduct of MSMEs and individuals is of the utmost importance and precisely what an IGF strategy may provide.At the same time,a policy focus on MSMEs brings particular challenges.First,any additional regulatory demands may be b

83、eyond their capacity or available resources.13 Second,official statistics mainly focus on larger enterprises,given that these are less expensive 9 Alliance for Financial Inclusion.2020.IGF Working Group.“Inclusive Green Finance.”Available at:https:/www.afi-global.org/thematic-areas/inclusive-green-f

84、inance/10 Alliance for Financial Inclusion.2020.IGF Working Group.“Inclusive Green Finance Policies for MSMEs.”Available at:https:/www.afi-global.org/sites/default/files/publications/2020-04/AFI_SMEF_IGF%20 MSMEs_AW_digital_0.pdf11 Ibid.12 Ibid.See also Jong-won Yoon.2022.“A Sound Investment:Financi

85、ng the Green Transition of Small And Medium-Sized Enterprises(SMEs).”Available at:https:/oecdcogito.blog/2022/04/25/a-sound-investment-financing-the-green-transition-of-small-and-medium-sized-enterprises-smes/13 S.Koirala.2019.“SMEs:Key Drivers of Green and Inclusive Growth.”OECD Green Growth Papers

86、,2019-03,OECD Publishing,Paris,20-3.Available at:https:/www.oecd.org/greengrowth/GGSD_2018_SME%20Issue%20Paper_WEB.pdf14 Alliance for Financial Inclusion,ICF and IGFWG,supra 5 at 5(noting that the majority of AFI members do not collect data on the impact of climate change on MSME finance).15 Measuri

87、ng Inclusive Finance Special Report:Available at:https:/www.afi-global.org/measuring-inclusive-green-finance10ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONRegulators must assess the use of finance by individuals and MSMEs to allow vulnerable groups,including women,young people,those living with

88、 a disability,and the forcibly displaced,to address climate risks,enhance their resilience to climate-related shocks,and use financial tools to reduce environmental degradation and mitigate climate change.22 Regulations should strive to ensure transparency,identify unintended use and,where possible,

89、remedy the former.23 2.FINANCIAL INCLUSION&SUSTAINABILITY TWO SIDES OF THE SAME COINFinancial access is one way to mitigate lifes challenges,including sickness,crime,poverty,unemployment,old age,exposure to climate events,etc.16 The financially excluded lack the tools to prepare for and manage such

90、risks.For instance,farmers without access to electronic payment systems are vulnerable to theft;and may consume more immediately rather than save for future investments in their farms.Generally,insurance schemes can secure ones long-term working capacity.Savings can fund childrens education and prov

91、ide for old age.Financial inclusion in developing economies also supports economic growth by underpinning a currency-based system in which local savings fund local investments.As it enhances the financing capacity and resilience of domestic financial markets,financial inclusion also reduces dependen

92、cy on foreign debt.17 Most tellingly,financial exclusion forces people to think and act short-term.18 The result of this short-termism is often unsustainable conduct.Where saving for school fees or energy-efficient machinery is impossible or too risky,goods and services which can be consumed in the

93、short-term become relatively more appealing.This can lead to massive inefficiencies and immediate unnecessary consumption,making long-term environmentally efficient policy approaches far more challenging to implement.Without a long-term perspective,people consume the very sources of their long-term

94、livelihood.19 For instance,during the COVID pandemic,in(some)countries aiming to develop sustainable ecotourism,people turned to exploit the very resources needed to support this sector,while others continued on a sustainable path.20 Further examples in the context of COVID are refugees and disaster

95、 relief,which highlight the centrality of inclusion to resilience and response to crises,including climate crises,21 with digital payments and digital skills as key concerns.For these reasons,financial inclusion and sustainability are two sides of the same coin.In modern and developed societies,sust

96、ainability cannot be conceived without also considering financial inclusion.Yet,IGF requires more than only access to financial services:financial inclusion is not a one size fits all solution but rather a set of tailored approaches that meet the distinct needs of the various target groups.16 S.Carb

97、o,E.Gardener,and P.Molyneux.2005.“Financial Exclusion.”Palgrave Macmillan.p.5-7.17 R.P.Buckley,“A Tale of Two Crises:The Search for the Enduring Lessons of International Financial Reform,”2001,6 UCLA Journal of International Law and Foreign Affairs 1-43 18 Arner et al.2020.“Sustainability,Fintech an

98、d Financial Inclusion.”21(1)EBOR 7,17.19 Hongda Liu et al.2021.“Impact of Green financing,FinTech,and financial inclusion on energy efficiency,”29 Environmental Science and Pollution Research 18955(E7 economies are deficient in producing the financial resources to ensure the availability of funds fo

99、r the acquisition of energy efficiency).20 Keith Anthony Fabro.2020.“No Tourism Income,But This Philippine Community Still Guards Its Environment.”Available at:https:/ Arner et al.2020.“FinTech and the Four Horsemen of the Apocalypse.”39:1 BFLR.22 Alliance for Financial Inclusion.2020.IGF Working Gr

100、oup.“Inclusive Green Finance:From Concept to Practice.”Available at:https:/www.afi-global.org/wp-content/uploads/2020/12/AFI_IGF_policy-brief_AW.pdf23 Alliance for Financial Inclusion.2021.Promoting Inclusive Green Finance Initiatives and Policies,supra 7,p.20-24.Available at:https:/www.afi-global.o

101、rg/wp-content/uploads/2021/01/AFI_IGF_promoting_sp_AW_digital_isbn2.pdfFarmer watering cabbage planting,Cabinda.Angola.(SilvaPinto1985/iStock)11ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONIII.ONE SIZE DOES NOT FIT ALL12ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONbenefit.And,of course,the

102、“Green”in IGF addresses the environmental dimension.However,in the absence of a coherent approach,sustainable finance may lead to exclusion.For instance,a dogmatic view of the use of environmental resources may restrict access to energy-intensive technologies that could be,by far,the best way to pro

103、mote financial inclusion.29 It is also easy to overlook the energy intensity of physical cash usage,from its manufacture to distribution throughout an economy,to the numerous trips required to bank merchants to make deposits.Furthermore,sustainable finance is pursuing two different ends:ensuring the

104、 sustainable use of scarce environmental resources,and mitigating the impacts of climate change and extreme weather conditions.30 These two aims are not always aligned.The challenge of sustainable finance policies is to balance these diverging effects in complex,very highly connected ecosystems.Give

105、n the country-specific nature of an IGF Framework,each regulator must seek the best locally for their respective economy and the financial institutions under their supervision,taking into consideration country-specific characteristics and restrictions.Given the divergence across AFI member countries

106、,no two optimal IGF Frameworks look alike.This local optimization becomes apparent across various factors,including national priorities,the level of ambition,scope,regulatory tools,benchmarks and performance measurement,cooperation,and how a long-term perspective of the IGF Framework can be assured

107、at the national level.But regardless of the specificities of each country,one thing is common:when developing an IGF framework,some progress is preferable to no progress at all.The regulatory reality is characterized by limited resources for policymaking,consultations,implementation,and adoption of

108、the IGF framework.1.IGF FRAMEWORK AS A DEFENSE OF THE PUBLIC GOODFinancial inclusion directly or indirectly enables the achievement of all seventeen UN Sustainable Development Goals.24 This finding is supported today by major policy bodies around the world.25 As a subset of sustainable finance,IGF p

109、romotes more long-term investments in sustainable economic activities and projects.This subset is a necessary intermediate step towards long-term thinking and planning for all business actors and individuals.26 Sustainable finance describes the policy objective for financial markets to sustainably u

110、se natural resources by taking environmental,social and governance(ESG)considerations into account when making investment decisions in the financial sector.27 ESG includes more than mere finance and environmental characteristics:the financial inclusion dimension of IGF is part of the social characte

111、ristics of ESG.28 For instance,when financial inclusion seeks to further gender-sensitive(or gender-transformative)access to finance,it furthers gender equality as a social factor and as an economic 24 D.W.Arner,R.P.Buckley,R.Veidt,D.A.Zetzsche.2020.“Sustainability,Fintech and Financial Inclusion”21

112、(1).European Business Organization Law Review 7.25 World Bank.2022.“Financial Inclusion.”Available at:https:/www.worldbank.org/en/topic/financialinclusion/overview(“Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that mee

113、t their needs transactions,payments,savings,credit and insurance delivered in a responsible and sustainable way.-Financial inclusion has been identified as an enabler for seven of the 17 Sustainable Development Goals.”).26 Arner et al.2020.“Sustainability,Fintech and Financial Inclusion.”21(1)Europe

114、an Business Organization Law Review 7,p.16-18.27 Alliance for Financial Inclusion.2021.IGF Working Group,Promoting Inclusive Green Finance Initiatives and Policies.Available at:https:/www.afi-global.org/wp-content/uploads/2021/01/AFI_IGF_promoting_sp_AW_digital_isbn2.pdf.28 DW Arner et al.2020.“Sust

115、ainability,Fintech and Financial Inclusion.”21(1)European Business Organization Law Review 7,17.29 In particular,DLT has been understood by some commentators as pro-inclusive technology,yet the related energy consumption has inspired criticism.See Bitcoins traditional proof-of-work validation Isabel

116、la Gschossmann et al.2022.“Mining the Environment is Climate Risk Priced Into Crypto-Assets?”Available at:https:/www.ecb.europa.eu/pub/financial-stability/macroprudential-bulletin/html/ecb.mpbu202207_3d9614ea8e6.en.html;Jon Huang,Claire ONeill and Hiroko Tabuchi.2021.“Bitcoin Uses More Electricity T

117、han Many Countries.How Is That Possible?”Available at:https:/ See,for example,2021,“EU Taxonomy,Corporate Sustainability Reporting,Sustainability Preferences and Fiduciary Duties:Directing finance towards the European Green Deal.”Available at:https:/eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:

118、52021DC0188(the EU Taxonomy Regulation includes these environmental objectives:(a)climate change mitigation;(b)climate change adaptation;(c)the sustainable use and protection of water and marine resources;(d)the transition to a circular economy;(e)pollution prevention and control;and(f)the protectio

119、n and restoration of biodiversity and ecosystems).13ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATION3.THE COSTS OF DOING NOTHINGRegulators have the choice to remain passive,in the sense that they neither support nor prevent a given activity from developing.Doing nothing is always an option as long

120、 as the risks associated with passivity are too small to care about.For instance,a passive regulatory approach marks the origin of some large-scale Fintech innovation.35 Yet,a passive approach to IGF is likely to be severely disappointing.1.5BILLIONPEOPLEHistory supports our assessment,as 200 years

121、of laissez-faire approaches have resulted in little financial inclusion in some countries and massive environmental damage,while active regulatory approaches have brought 1.5 billion people into the formal financial system in recent decades,and made truly sustainable finance possible.A closer look r

122、eveals that this outcome is not surprising;it is the result of the entirely different objectives of Fintech and IGF regulations.2.TOWARDS DOUBLE MATERIALITYSustainable finance,as such,has two dimensions.On the one hand,regulators can focus exclusively on the impact of sustainability factors on firms

123、 or portfolio values,31 through an approach limited to internalizing sustainability risks.For example,rising sea levels may expose coastal real estate to flooding.On the other,regulators can consider how a financial institutions internal policies impact externalities.32 For instance,in pursuing equa

124、l pay policies,a financial institution may promote gender equality and societal sustainability.Conversely,distant environmental factors may be considered,for example,biodiversity may be severely damaged by activities within a firms supply chain.33 While the damage to biodiversity may not affect the

125、firms value today,the reduction of the damage to biodiversity may,nevertheless,be highly desirable and a public good.Sustainable finance policies can prevent negative impacts on the environment and climate(climate risk mitigation),while enhancing resilience(climate change adaptation)and actively fac

126、ilitating positive actions and developments.SUSTAINABLE FINANCE OBJECTIVESSustainable finance approaches that incorporate the risks and impacts of financial activities on sustainability factors and which include as sustainable only economic activities that consider both internalized risks and extern

127、alities are based on a double materiality standard.34 IGF,therefore,requires a double materiality approach in response,and the rationale for IGF frameworks is clear:their positive and inclusive societal and environmental impacts.31 Duco Claringbould,Martin Koch and Philip Owen.2019.“Sustainable Fina

128、nce:The European Unions Approach to Increasing Sustainable Investments and Growth Opportunities and Challenges.”88(2)Vierteljahrshefte zur Wirtschaftsforschung 11,16-17.32 Ibid 18.33 See,for example,Alliance for Financial Inclusion and CDP.2022.“From Commitments to Action at Scale:Critical Steps to

129、Achieve Deforestation-Free Supply Chains.”Available at:https:/ UN Financing for Sustainable Development Office.2022.“Bridging the Finance Divide.”Available at:https:/developmentfinance.un.org/sites/developmentfinance.un.org/files/FSDR2022_ChptIII.B.pdf;Carol A.Adams et al.2021.“The Double-materialit

130、y Concept Application and Issues.”Global Reporting Institute White Paper 5;Iris H-Y Chiu.2022.“The EU Sustainable Finance Agenda:Developing Governance for Double Materiality in Sustainability Metrics.”23 European Business Organization Law Review 87.35 The large Chinese FinTech firms benefited origin

131、ally from a passive regulatory approach.D.A.Zetzsche,R.P.Buckley,D.W.Arner and J.N.Barberis.2018.“From FinTech to TechFin:The Regulatory Challenges of Data-Driven Finance”14,New York University Journal of Law and Business 393,436.It is acknowledged that today,many regulators actively approach Fintec

132、h innovation by way of sandboxes and innovation hubs.INTERNALEXTERNALMITIGATIONADAPTIONSUSTAINABLE FINANCE14ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONof financial institutions may also preclude vulnerable groups in society from access to finance given that they are particularly exposed to th

133、ese risks.Accordingly,more proactive approaches become desirable to further IGF by way of a holistic approach.Frameworks are needed that work well under the realities of financial regulation and supervision worldwide which include limited regulatory capacity and overstretched enforcement resources.3

134、8 These are developed in two steps.The desirable state of IGF implementation is defined first,classified in six Building Blocks in section IV,followed by a discussion on the Policy Tools that support achieving the Building Blocks in section V.From the outset,both Fintech and IGF regulations are abou

135、t public goods:innovation in one case,inclusion and the environment,in the other.In the absence of law and regulation,public goods often have few defenders,and many seek to exploit them.However,Fintech regulation is about reducing negative externalities that come as a side effect to innovation in fi

136、nancial services.Innovation as a public good comes as a side effect whenever new technologies are developed or used.Fintech does not require regulation to create innovation;nevertheless,regulation can further or reduce the speed of innovation.With this focus on the externalization of risks,Fintech r

137、egulation is much like the risk controls of traditional(financial)regulation.IGF regulation is about creating positive externalities as a side effect of financial services.Regulation must ensure that the public goods of financial inclusion and environmental protection come about when financial servi

138、ces are delivered.In the absence of regulatory interference,(1)clients may remain excluded because the services offered are not profitable for financial institutions,and(2)the environment may suffer as long as the immediate benefits from financing environmentally harmful activities are greater than

139、the immediate costs.Sustainability risks are increasingly identified as long-term systemic risks best mitigated by regulatory action,36 and various efforts exist to place them within the traditional framework of financial regulations.This explains why central banks are now playing important roles in

140、 discussions around sustainable development,particularly,on climate change.37 While divergent views persist as to whether,and how,general capital requirements like those laid down in the Basel Accords should be amended to reflect sustainability concerns(which may include both sustainability risks an

141、d the impact on sustainability factors),all central banks have a mandate to impose additional capital requirements in response to an institution-specific risk analysis(the so-called Pillar 3 supervisory mechanism).This allows central banks to undertake sectoral classifications and add additional cap

142、ital requirements on an ad-hoc basis.For instance,based on a portfolio screening,some financial institutions may be seen as overly exposed to flooding,drought,storms,or energy crises,and then subjected to additional risk mitigation and capital measures.Yet the very means that help reduce risk on the

143、 side 36 See,in particular,the seminal work by K.Alexander.2014.“Stability and Sustainability in Banking Reform:Are Environmental Risks Missing in Basel III?”Cambridge/UNEP;Alexander and Fisher.2019.“Banking Regulation and Sustainability”in van den Boezem,Jansen,Schuijling(eds.),Sustainability and F

144、inancial Markets;see also D.Schoenmaker and W.Schramade.2019.“Principles of Sustainable Finance,”Ch.10,ss-292 et seq.37 See UNEP.2017.“On the Role of Central Banks in Enhancing Green Finance.”Inquiry Working Paper 17/01;World Bank.2021.“Toolkits for Policymakers to Green the Financial System.”Tool 9

145、,p.67 et seq.38 Julia Black.2004.“Law and Regulation:The Case of Finance”in Christine Parker(ed),Regulating Law(Oxford University Press)34,p.54-58.15ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONLenca tribal farmer,rural Honduras.(Marco Vasquez/iStock)IV.BUILDING A HOLISTIC APPROACH TO IGF16ROAD

146、MAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONWHILE INCLUSION AND THE ENVIRONMENTAL MISSION DEFINE THE OBJECTIVE,SUCH A HOLISTIC APPROACH MAY REST ON SEVERAL BUILDING BLOCKS WHICH DESCRIBE THE REGULATORY,SOCIAL,AND ECONOMIC PRECONDITIONS FOR TRANSFORMATIVE CHANGE TOWARDS IGF OBJECTIVES.ELEMENTS OF A

147、 HOLISTIC APPROACH TO IGF(BUILDING BLOCKS)SUSTAINABLE FINANCE INCLUSIVE GREEN FINANCEGREEN FINANCEINCLUSIVE FINANCE IGF ECOSYSTEM STRATEGY DATA AND MODELS CLASSIFICATION PRIORITIZATION INFRASTRUCTURE17ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONSTRATEGYEach country has its own unique financial

148、,environmental,and climate challenges.However,having a clear and focused strategy is critically relevant to success in the implementation of IGF policies and initiatives.An effective strategy is the best tool to align priorities and serve as an actionable plan to reach national goals.NATIONAL COORDI

149、NATIONThe first and foremost step of implementation is an IGF strategy at the highest levels involved in financial regulation including central banks or financial regulation bodies;this requires a governance structure and coordinating entity in charge of implementing and ensuring the strategys succe

150、ss,39 which can be a standalone or sub-strategy of a comprehensive financial sector or a financial inclusion strategy.An IGF strategy should be built on broad stakeholder consensus.How this consensus is achieved may vary from country to country.While countries responding to immediate crises often ha

151、ve strong ministerial or regulatory mandates resulting in top-down approaches(e.g.Thailand,the Philippines,Bangladesh,Fiji),in other countries,an IGF strategy is the result of bottom-up initiatives with private financial institutions assuming the role of a driving force to which regulators respond,e

152、.g.Ghana,Paraguay,Honduras,Cambodia).These bottom-up approaches are often driven by funding conditions of international organizations and multilateral development banks,such as the IFC,the EIB and the Green Climate Fund.Equally important is that an IGF strategy be aligned with the financial sectors

153、contributions to the governments priorities on SDGs and environmental commitments in line with the UN Framework Convention on Climate Change(UNFCCC),the Paris Agreement and NDCs,UN Convention on Biological Diversity,and the UN Convention to Combat Desertification.The six Building Blocks of a success

154、ful IGF Framework identified in this report include:The adoption of an IGF strategy at the highest level of financial regulation and central banking aligned with NDCs as well as national climate and environmental policies.A solid strategy rests on a governance structure and coordinating entity in ch

155、arge of implementing and ensuring the success of the IGF strategy,which involves embedding IGF values in every area of public and private institutions(governance,operations,products,financial and risk management,recruitment,training and development).Classification of IGF compliant conduct,products,a

156、nd services,either by way of a catalogue or a taxonomy,to delineate wanted from unwanted economic behavior.Establishing IGF as a priority within financial institutions and regulators,for instance,through Sustainable Banking Principles and ESG-related Sustainable Frameworks.Data and models are at the

157、 heart of the IGF mission,but are lacking in scale.The identification of measurement techniques,combining financial and sustainability data in models with reporting and disclosure to regulators,and the market at large,may facilitate data collection and analysis,and the development of data-driven mod

158、els for lending and investment as well as algorithms for IGF-related operations.Establishing,or enhancing,the IGF ecosystem capable of delivering the elements of a market-driven successful sustainable finance approach,including specialized data intermediaries,technology providers,professionals in th

159、e financial sector,and educational resources.Building financial infrastructure and resources,including technical systems through which monetary transactions are made and financial services can be provided.39 Please refer to:https:/www.afi-dataportal.org/user/login18ROADMAP FOR INCLUSIVE GREEN FINANC

160、E IMPLEMENTATIONBANK AL-MAGHRIB ROADMAP FOR ALIGNING THE FINANCIAL SECTOR WITH SUSTAINABLE DEVELOPMENTBank Al-Maghrib set up a System-Wide Strategic Roadmap on sustainable finance to contribute to the governments climate and sustainable development objectives.On the sidelines of COP 22 hosted in Mar

161、rakech,the Moroccan financial industry joined the national movement on sustainable development with the active support of Bank Al-Maghrib which coordinated the elaboration of a national Roadmap for Aligning the Moroccan Financial Sector with Sustainable Development,demonstrating a successful collabo

162、ration between government agencies and the public-private sector.With broad representative governance from the financial sector,financial regulators and government bodies,including the Ministry of Finance,this roadmap provides a broad framework and principles to promote sustainable finance at the na

163、tional level and manage environmental and climate-related risks,and ensures a follow-up process to track progress toward commonly agreed national goals that cover:Risk-based governance of environmental and social risks Development of green finance products and financial instruments Promotion of fina

164、ncial inclusion as a driver for sustainable development Capacity building on sustainable finance issues Transparency and market discipline on environmental performance and risk management practicesIn accordance with this five-pronged roadmap,players in the banking sector have taken several voluntary

165、 measures to scale-up financial inclusion and green finance.BANGLADESH BANKS IGF STRATEGY The introduction of an IGF Policy in Bangladesh started in 2010 with Bangladesh Bank(BB)s IGF strategy-the First Strategic Plan(20102014),as the first regulator in the AFI network that connected financial inclu

166、sion and climate change.As envisaged by the strategy,“ERM guidelines”and“policy guidelines for green banking rules”were introduced in 2011 as initial policies:banks and other financial institutions were required to develop green banking strategies,incorporate environmental risks into their CRM,and r

167、eport quarterly on their green banking activities.BB has focused on data collection and sharing since 2013,with the publication of quarterly reports on green banking activities.In 2014,BB set an annual green finance target which required financial institutions to dedicate five percent of total loan

168、disbursements and investments to green financing.Following extensive evaluation of the first strategy,BB adopted the Second Strategic Plan(20152019).This led to an expansion of the ERM guidelines into ESRM guidelines in 2017;in the same year,BB defined the eligibility for green types of financing in

169、 the form of an exhaustive list.In 2018,the data collection and reporting format was revised.The third Strategic Plan(20202024)is now aimed at mainstreaming green finance and sustainable banking,including the integration of carbon footprint measurements.The Bangladesh example demonstrates the import

170、ance of a strategic plan as starting point for any IGF regulatory approach,followed by extensive evaluation and refinement of the initial strategy,with ever more ambitious approaches based on country specific insights and knowledge generation.In all stages of this process,data collection and capacit

171、y building are valuable in further implementing the IGF strategy.In principle,the same applies to classification means,i.e.the definition of green finance and a taxonomy may be helpful,yet dispensable for the early steps of an IGF approach,given that Bangladesh had carried out successful policies be

172、fore a definition was introduced.19ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONFollowing this landmark policy initiative,the Philippines Inter-Agency Technical Working Group for Sustainable Finance(ITSF)issued the Philippine Sustainable Finance Roadmap and Guiding Principles in October 2021 th

173、at aim to create an environment for greener policies,mainstream sustainability in financing activities,and increase investments in low-carbon activities.The Guiding Principles were developed to establish a common understanding among various stakeholders of the economic activities in the Philippines

174、that can be considered sustainable.This approach follows current practices within the ASEAN region to use a principles-based approach in developing national taxonomies.2Taking a holistic approach to sustainable finance,the updated National Strategy for Financial Inclusion(NSFI)2022-2028 issued by th

175、e Financial Inclusion Steering Committee,which is led by the BSP,also embeds the Philippines sustainable development agenda.3 The NSFI strives to further the countrys financial inclusion agenda prioritizing financial resilience,consumer empowerment,financial literacy,and enhancing access to finance

176、for MSMEs and the agriculture sector.The strategy includes social safety nets to promote resilience-building among vulnerable populations to prepare and recover from unexpected events including climate-related disasters.Complementary to the NSFI,the Philippine Sustainable Finance Roadmap also aspire

177、s to gender-responsive and rights-based sustainable development,with major strides already being taken with regard to womens empowerment and gender equality.1 BSP Working Paper Series.2020.Available at:https:/www.bsp.gov.ph/Media_And_Research/WPS/WPS202003.pdf 2.Circular Letter-Philippine Sustainabl

178、e Finance Roadmap andGuiding Principles3 National Strategy for Financial Inclusion.2022.Available at:https:/www.bsp.gov.ph/Pages/InclusiveFinance/NSFI-2022-2028.pdfTHE PHILIPPINES SUSTAINABLE FINANCE FRAMEWORKThe Bangko Sentral ng Pilipinas(BSP)mandates of maintaining price and financial stability p

179、rovide the opportunity to advocate a sustainability agenda in the Philippine financial system and adopt its Sustainable Central Banking Program as one of its strategic thrusts.In line with its financial stability mandate,the BSP rolled out a two-pronged approach to promote sustainable finance.First,

180、is increasing awareness and understanding of sustainability concepts among banks and supervisors.Second is mainstreaming sustainable finance through the issuance of enabling regulations.The latter is built on earlier studies conducted to gauge the knowledge of financial institutions about environmen

181、tal and social risks and to assess the impact of extreme weather episodes1 on the performance of the Philippine banking system.Likewise,sustainable finance regulations are anchored on the corporate and risk management standards issued by the BSP.The BSP issued the first phase of its sustainability-r

182、elated guidelines in April 2020 in the Sustainable Finance Framework.This sets out the supervisory expectations on the integration of sustainability principles in corporate governance and risk management frameworks as well as in the business strategies and operations of banks.Banks are given three y

183、ears to fully adopt and integrate environmental and social risk management in their systems and banking operations.The BSP Sustainable Finance Framework covers:Responsibilities of the board of directors and senior management in leading and institutionalizing the sustainability principles across the

184、organization.Adoption of the environmental and social risk management system.Disclosure requirements.The framework was followed by the issuance of the Environmental and Social Risk Management Framework and the Guidelines on the Integration of Sustainability Principles in Investment Activities of Ban

185、ks in October 2021 and August 2022,respectively.These circulars set out the granular expectations on the management of environmental and social risks in relation to the credit and operational risk exposures of banks as well as in making investment decisions.20ROADMAP FOR INCLUSIVE GREEN FINANCE IMPL

186、EMENTATIONRESERVE BANK OF FIJIFiji is a pioneer among AFI members in terms of IGF,beginning IGF activities in 2009 reflecting the challenge of rising sea levels.The country began by building the right infrastructure,collecting data,and raising awareness.Following initial measures in response to clim

187、ate-related disasters that aimed at protecting the less privileged and,therefore,more affected parts of the population,Fiji soon moved towards a more proactive and integrated approach by adopting measures that realize IGF objectives and contribute to sustainability while strengthening the population

188、s resilience to future climate-related events.In doing so,Fiji has largely relied on voluntary or opt-in measures that incentivize financial inclusion instead of mandatory regulations.Source:Reserve Bank of FijiCCSBSOS FINANCE REGIONAL APPROACH TO SUSTAINABLE The regulators organized in the Council

189、of Central American Financial Regulators(CCSBSO)engage frequently in inter-regional coordination to avoid harmful race-to-the-bottom regulatory competitions and achieve greater convergence across the six Central American jurisdictions for which they exercise oversight.In 2021,CCSBSO,IFC,Norfund,and

190、FMO signed a cooperation agreement on the future regulatory efforts of Superintendencies members of CCSBSO in Central America,Panama,the Dominican Republic,and Colombia.The agreement focuses on:The development of a Sustainability Taxonomy at a regional level.ESG criteria,including a roadmap to issue

191、 regulation by member countries.Including climate and social risks in stress tests and analyzing the impacts of climate and social risks on financial institutions in the region.Source:Sector financiero en Centroamrica acuerda adoptar estndares y mejores prcticas internacionales para promover la banc

192、a sostenible.Available at:https:/pressroom.ifc.org/all/pages/PressDetail.aspx?ID=26560INTERNATIONAL COORDINATIONLearning from international approaches and coordination is of the utmost importance for any IGF approach for two reasons.First,some may argue that a standalone IGF approach may decrease co

193、mpetitive capacity and financial stability,while doing little to promote the positive externalities at the heart of IGF:financial inclusion and the environment.Standalone approaches need tight border controls to ensure that production of the non-financial type is not shifted to other countries and r

194、eimported,to circumvent IGF-oriented legislation.Such border controls will be expensive to administer and may have numerous other undesirable consequences.40 Second,there are major challenges from the fact that many of the impacts are global,and often not directly tied to the original beneficiary.Fo

195、r instance,how effective might a national policy on air pollution be if all neighboring countries allow air pollution?Nature knows no borders,and this is often the case with environmental elements of IGF.IGF approaches must be closely aligned with neighbors,resulting in regional or global approaches

196、 to remedy environmental issues.41 Simultaneously,these regional and international approaches must be fine-tuned to promote financial inclusion contrary to environmental issues,financial inclusion relies strongly on national financial infrastructure and,as such,is primarily a local matter.42 IGF app

197、roaches,thus,need to balance the regional and international dimensions with local needs for financial inclusion,aiming for a local optimum in each AFI member country.40 Pierre-Hugues Verdier.2013.“The Political Economy of International Financial Regulation.”88 Indiana Law Journal 1405,1439-1441.41 S

198、ee,for example,Mark Dwortzan.2022.“Can the World Meet Global Climate Targets Without Coordinated Global Action?”Available at:https:/news.mit.edu/2022/can-world-meet-global-climate-targets-without-coordinated-global-action-030142 UNSGSA.2016.Financial Inclusion:An Essential Part of the Response to Cl

199、imate Change.Available at:https:/www.unsgsa.org/speeches/financial-inclusion-essential-part-response-climate-change21ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONTHE EUROPEAN UNIONS SUSTAINABLE FINANCE ACTION PLANThe European Commission(EC)issued their Sustainable Finance Action Plan of 2018 as

200、 a core strategy.During its execution,the EC has relied on a number of expert committees to advise on the legislative process.In 2021,these expert groups were integrated and reorganized in the EU Sustainable Finance Platform which provides guidance on all technical matters.Three supervisory agencies

201、:the European Supervisory Agencies(ESAs),European Banking Authority(EBA),European Securities&Markets Authority(ESMA),and European Insurance and Occupational Pension Authority(EIOPA)are tasked with the coordination of financial supervision which takes places at the EU Member State level as well as th

202、e European Central Bank for large banks and investment firms with systemic importance.Following the strategy setting by the European Commission,each of the ESAs have issued sustainable finance strategies for their respective sector.See Annex 1 for an overview of these strategies.Source:ADA Chair Res

203、earch based on disclosures on the ESAs websites and https:/finance.ec.europa.eu/sustainable-finance_enSF PLATFORM Fifty-seven members and 11 observers from industry,academia and civil society.This includes the Technical Working Group advising on the TSC,as well as five sub-groups which advise on the

204、 TR review,on significantly harmful and low impact activities and social objectives,on data availability and usability,and in monitoring sustainable investments.SF PLATFORM (HLEG,TEG,MSEG,EFRAG,EESAS)PUBLIC (All citizens,MS and organizations,esp.financial participants)STRATEGIES SF Action Plan Revis

205、ed SF Strategy SF PackagePublic consultation 2020AdviseEUROPEAN COMMISSION 22ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONBANK OF GHANAS SUSTAINABLE BANKING PRINCIPLESThe Bank of Ghanas Sustainable Banking Principles,which provide guidance on Environmental and Social Risk Management(ESRM)polici

206、es for banks under its supervision,are made up of seven principles(pillars):Environmental and Social Risk Management(ESRM)Internal Environment Social and Governance(ESG)in bank operations Corporate governance and ethical standards Gender equality Financial inclusion Resource efficiency,sustainable p

207、roduction,and consumption Reporting on the five most sensitive environmental and social sectors to which banks are widely exposed:1.Agriculture and forestry;2.Construction and real estate;3.Manufacturing;4.Oil,gas,and mining;5.Power and energy.Sustainable Banking Principles,while covering all dimens

208、ions of sustainable finance,addresses sustainability risks with its ESRM and related reporting on sensitive sectors.As to externalities,the principles focus on governance,gender equality,and financial inclusion.In turn,these matters receive the attention of financial institution.So far,the Bank of G

209、hana has not modified the capital requirements of banks.Yet,as a general principle,a banking regulator can require risk cushions for risks uncovered by the respective banks ESRM.The Bank of Ghana may require additional capital provisioning should ESRM elements contradict the risk reporting.The Bank

210、of Ghanas current work focuses on the second principle(ESG operations).Source:Bank of Ghana.PRIORITIZATIONAny IGF framework must ensure that concerns are prioritized within financial institutions and regulators at large.And while regulators can rely on dialogue and advocate for IGF,experience shows

211、that in addition to an IGF strategy,the attention of management is needed.Simultaneously,the private sector needs to understand how IGF considerations can be integrated with financial services provision,insurance,and investment activities,and how the private sector can effectively align with sustain

212、able goals.This attention is critical to ensuring adequate funding of IGF implementation projects among regulators and financial institutions as regulatory resources are always limited.Sustainability adds entirely new dimensions to the knowledge regulators need,the rules they need to enforce,and bot

213、h come with costs.Sustainability requires knowledge on a wide range of issues from greenhouse gas emissions to biodiversity,and from rising sea levels to weather issues such as floods and droughts.Many countries may lack extensive human expertise on these issues,especially when it comes to how they

214、intersect with the various population groupings within a country.Useful tools to achieve the former include(binding or non-binding)IGF policy releases in the form of sustainable banking principles(see the box below)or a regulator-specific policy agenda(see the EU and UK key regulators examples in An

215、nex 1 and 2);in some cases,broadly framed ESG-related risk frameworks may also serve the same purpose.23ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATION Collaborative Partnerships:We will collaborate across sectors and leverage international partnerships to accelerate our collective progress and m

216、ove the sector as one,ensuring our approach is consistent with international standards and Nigerian development needs.Reporting:We will regularly review and report on our progress in meeting these principles at the individual,institutional,and sectoral levels.Financial inclusion is a standalone prio

217、rity pillar in the NSBP and focused on access to finance for the excluded segments of the population.The CBN measures the impact of the initiatives funded from the balance sheets of banks,in relation to their ability to reduce the negative consequences of climate change,environmental degradation,and

218、 impact on human lives by taking a baseline situation from the beginning and comparing this with the future.A reporting template,integrated in risk-based supervision requirements,is used to assess a banks carbon and social footprint to realistically measure the footprint reductions linked to funding

219、 from their balance sheets.The CBN implemented the Sustainability Principle Indicators to measure levels of conformity.Some indicators are the following:Percentage of female board membership Percentage deviation from SP guidelines on lending Rate of compliance to sustainable lending standards Percen

220、tage increase in lending processes incorporating sustainability principlesSource:IGFWG,Internal survey on IGF Roadmaps(Ago 2022)CLASSIFICATIONAt the heart of all sustainability-oriented rules,including IGF,there is uncertainty as to which conduct qualifies as sustainable.43 Any IGF framework must th

221、us provide some means to identify IGF compliant conduct.THE NIGERIAN SUSTAINABLE BANKING PRINCIPLES(NSBP)Motivated by improving brand reputations,boosting the bottom lines of financial institutions and helping organizations achieve cost-savings thoroughly financial operations,the Central Bank of Nig

222、eria initiated the Nigerian Sustainable Banking Principles(NSBP)with the aim of closing funding,capacity,gender,governance,and financing gaps.The NSBP pillars are as follows:Our Business Activities-Environmental and Social Risk Management:We will integrate environmental and social considerations int

223、o decision-making processes relating to our business activities to avoid,minimize or offset negative impacts.Our Business Operations-Environmental and Social Footprint:We will avoid,minimize or offset the negative impacts of our business operations on the environment and local communities where we o

224、perate and,where possible,promote positive impacts.Human Rights:We will respect human rights in both our business and activities.Womens Economic Empowerment:We will promote womens economic empowerment through a gender inclusive workplace culture in our business operations and seek to provide product

225、s and services designed specifically for women through our business activities Financial Inclusion:We will promote financial inclusion,seeking to provide financial services to individuals and communities that traditionally have had limited or no access to the formal financial sector.E&S Governance:W

226、e will implement robust and transparent E&S governance practices in our respective institutions and assess the E&S governance practices of our clients.Capacity Building:We will develop individual institutional and sector capacity necessary to identify,assess and manage the environmental and social r

227、isks and opportunities associated with our business activities and operations.43 See the criticism aired on the diversity of the use of the term sustainability by Breuer,Haase,and Breuer.2013.83 J.Bus.Econ.551(552);Bueren,ZGR 2019,813(816 et seq.);see also Mllers,ZHR 185(2021),881(889 et seq.).24ROA

228、DMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONWhichever tool is preferable depends on the degree of the binding effect the decision will have and whether non-compliance will be sanctioned.In principle,financial regulation enforcement will need consistent terminology and a binding effect.The most bi

229、nding effect can be achieved by creating a mandatory taxonomy and obliging those who use terms such as“sustainability”,“green”,or“the environment”in a financial services context to specify the extent to which their use of the language aligns with the taxonomy.SUSTAINABLE FINANCE POLICY(BANGLADESH BA

230、NK)Mainstreaming a green definition in Bangladeshs financial system started with the issuance of the Policy Guidelines for Green Banking and Environmental Risk Management issued by Bangladesh Bank in 2011.The guidelines included a list of activities that can be considered as green which provided cla

231、rity for financial institutions in classifying their portfolios.This catalogue approach provided a basis for the reporting of green financing activities and subsequent policy developments.For instance,when a five percent green lending quota was set in 2014,the catalogue of green activities was used

232、to verify compliance.The green catalogue was also used to identify green projects when Bangladesh Bank set up a green refinancing facility to support the efforts of financial institutions to meet the green lending quota.The green catalogue was updated to a full green finance and sustainable finance

233、taxonomy through the Sustainable Finance Policy issued in 2020 which is now the basis for succeeding policy updates on lending quota and others.Source:Alliance for Financial Inclusion.EX-ANTE OR ON DEMANDClassification can be performed ex-ante by way of standards or regulations or on demand;for inst

234、ance,a review panel can classify economic activities whenever financial institutions or insurance companies seek project finance support from the central bank.The upside of an ex-ante approach is transparency and legal certainty,yet it will inevitably come with a limited scope:An ambitious ex-ante a

235、pproach requires an examination of all details and connections of any business and economic activity of any country.Here,we may see the greatest impact on the economy,both positively and negatively,given that the risk of regulatory errors is real.The challenge of establishing a full taxonomy across

236、all business sectors is massive,and the risks of capital misallocation are real,given the lack of regulatory resources,expertise,and knowledge on dimensions of sustainability.44 To remedy these risks,the classification can be drafted with less or more ambition;in turn,the scope and granularity of th

237、e classification will be limited.A less ambitious but very effective ex-ante approach focuses on industries with the greatest IGF impact.It sets up detailed rules only for core issues,such as a reduction in dependency on oil and gas,protection against flooding,drought impact mitigation,and other sig

238、nificant concerns.STANDARDS OR REVIEW PANELClassification can be provided as a standard or rulebook,or the classification task can be assigned to a review panel(with the involvement of financial regulators)that classifies conduct whenever there is a specific need.The first option offers more certain

239、ty,but also requires more regulatory investments into classification.A text-based classification may come with the risk of binary decisions and misinterpretation.Scorecard approaches that measure(environmental and social)sustainability impacts in relative terms may facilitate transformative investme

240、nts.45 BINDING OR NON-BINDING CLASSIFICATIONAny framework can rely on binding or non-binding classification.For instance,classification can take the form of a recommendation,best practice standard,or a tight set of rules with binding effect.44 See Dirk A.Zetzsche and Linn Anker-Srensen.2022.“Regulat

241、ing Sustainable Finance in the Dark.”23 European Business Organization Law Review 47,72.45 See Zetzsche,Bodellin,and Consiglio.2022.“Towards a EU Social Taxonomy:A Scorecard Approach.”University of Luxembourg Working Paper.Available at:.25ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONTHE EU TAXO

242、NOMY REGULATIONThe EU Sustainable Finance Action Plan of 2018 comprises six elements.At its heart,lies the Taxonomy Regulation(EU)2020/852,which introduces a joint terminology and standardized approach to“environmental sustainability”.The taxonomy is cross-sectoral,in that it calls for compliance fr

243、om all parts of the financial services value chain and also covers issuers of corporate bonds and large corporations and limited liability companies.At the time of writing,the European Commission has started work on an additional“Social Taxonomy”covering a set of social matters,including,to a limite

244、d extent,financial inclusion.Both taxonomies,together,seek to ensure the consistent use of the term“sustainability”in finance.An additional four legislative measures aim at enhanced,harmonized and comparable disclosures:The cross-sectoral Sustainable Finance Disclosure Regulation(EU)2019/2088 introd

245、uces mandatory disclosures for financial market participants and financial advisers on sustainability factors defined by the Taxonomy Regulation(hereafter SFDR)to all EU financial law legislation.The revised Benchmark Regulation(EU)2019/2089 adds provisions on sustainability benchmarks such as ratin

246、g agencies and index providers to the EU rules on benchmark providers.A set of revisions to EU product distribution rules(in IDD II,MiFID II),demands that sustainability-related information is forwarded by all financial actors within the financial services value chain,ranging from the users of finan

247、ce to funders,which are either institutional investors(including banks and insurance companies),public investors,or pensions funds;The proposed revision of Directive 2014/95/EU on non-financial reporting(NFRD)and a new Corporate Sustainability Directive will further strengthen disclosures on sustain

248、ability matters by the 49,000 listed,financial,and large companies residing in the EU.In addition,a set of rules has been put in place that governs the set-up,operations and business conduct conditions of financial intermediaries,with a view to embedding the analysis of sustainability risks and fact

249、ors into financial intermediaries organizational structures,investment,lending,and risk decisions.Methodologically speaking,the taxonomy regulation aims to answer the question“what is sustainability?”while the disclosure obligations seek to answer the questions“who acts sustainably?”and“which produc

250、t is sustainable?”along with the operational rules to ensure that financial intermediaries act sustainably.ECOSYSTEMAny IGF approach requires new types of resources,skills,and expertise from financial institutions.In particular,market-based IGF approaches require a range of specialist services and k

251、now-how.Examples include universities,rating agencies,index providers,auditors and sustainability advisors,specialist legal advice and consultancy firms on how to include IGF within the business models of financial institutions.Financial institutions cannot build these inhouse as it is not their cor

252、e business;building it would be extremely costly;and innovative capacity would be lost,given the conflicts of interest present between a financial institutions core business which would ask for monopolizing the best-in-class services,while the economy at large would benefit from making the service a

253、vailable to all financial institutions due to the economies of scale inherent in these services.Indeed,if the services are concentrated in one institution,significant dependency risks may arise in the event of institutional failure.For these reasons,successful financial centers have ecosystems that

254、offer these various functions and services from a range of providers.Some AFI member institutions may have few,or no intermediaries with sufficient resources.This is often the case for MSMEs and individuals,with respect to which an advanced service infrastructure is often not available,given the lac

255、k of means to finance the service providers.Cross-border service providers may fill the gap when AFI member countries cannot effectively set-up niche services.Some of them that support IGF policies are available at low or zero costs and may be fit for supporting the IGF transformation of MSMEs.46 Re

256、gulators should aim at developing fully-fledged IGF ecosystems over time.In the following,we provide three examples to illustrate what an ecosystem may entail.46 See,for instance,the tools on emissions calculations and basic education provided by the SME Climate Hub,available at:https:/smeclimatehub

257、.org/courses/education/;note that the scientific basis of each of these offerings is not assured,as such,reliance by AFI member institutions as part of their regulatory framework will require an independent assessment of each service providers approach.26ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENT

258、ATIONMONGOLIAS SUSTAINABLE FINANCE ECOSYSTEMMongolias financial system is mainly comprised of commercial banks.The countrys financial regulators include the Bank of Mongolia which regulates the banks,the Financial Regulatory Commission which looks after the capital markets,and other non-bank financi

259、al institutions such as microfinance,the Ministry of Finance,and the Deposit Insurance Corporation.The Mongolian Bankers Association,which is an organization of commercial banks,also plays an important role in the system including with sustainable finance discussions.The increasing awareness of the

260、impacts of climate change sparked a discussion on sustainable finance in Mongolia,notably in the banking sector.A working group was formed to work on sustainable finance as regulators realized that the growth trajectory for sustainable finance would require the involvement of the whole sector.Sustai

261、nable Financing Principles were issued to the entire financial sector and following this issuance,banks,and non-bank financial institutions(NBFIs)were required to report their activities on sustainable finance.A green loan fund was also established to support green lending activities while the Finan

262、cial Market Development Program was launched to support greening activities in the capital market.Given these initiatives from the different finance subsectors,the Sustainable Finance Roadmap was developed to detail what needs to be done for each subsector,including NBFIs,in addition to describing u

263、pcoming policy initiatives for each subsector that help build the entire sustainable finance ecosystem of the country.By the end of 2019,the Mongolian Green Finance Taxonomy was issued for use by the whole sector which provides a common understanding of what can be considered as green,including live

264、lihood activities supported by NBFIs.To ensure the onboarding of NBFIs,FRC Mongolia also commenced capacity building and awareness raising initiatives among these institutions,including technical capacity building such as taxonomy use,integrating IGF in institutional mandates,and ESRM approaches.Sou

265、rce:The Mongolian Sustainable Finance Roadmap.Available at:https:/wedocs.unep.org/handle/20.500.11822/33399 Mongolian Green Taxonomy.Available at:https:/www.ifc.org/wps/wcm/connect/0c296cd3-be1e-4e2f-a6cb-f507ad7bdfe9/Mongolia+Green+Taxanomy+ENG+PDF+for+publishing.pdf?MOD=AJPERES&CVID=nikyhIhLUXEMBO

266、URGS SUSTAINABLE FINANCE ECOSYSTEMWithin European financial services,Luxembourg has assumed a leading role in sustainable finance,with among others the largest volume of“Green”assets under management and largest microfinance investment vehicles in the region.Its ecosystem is characterized by a set o

267、f general and niche market participants together providing a vibrant ecosystem in the field of sustainable finance at large,and in microfinance and inclusive finance,in particular.The Luxembourg ecosystem consists of a set of public and private actors,including a number of professional associations

268、representing all kinds of financial services.Jurisdiction for sustainability and sustainable finance is vested in the Ministry of Finance,Ministry of the Environment,Climate and and Sustainable Development,and Ministry of Foreign and European Affairs(Directorate for Development Cooperation and Human

269、itarian Affairs).The Luxembourg Sustainable Finance Initiative(LSFI),the Inter-Departmental Commission on Sustainable Development(ICSD),the Superior Council(CSDD),and Lux-Development(LuxDev)coordinate public and private activities.The set-up is laid down in various strategy documents,such as a gover

270、nment-issued Sustainable Finance Roadmap(2018),a Sustainable Finance Strategy issued in 2021 by the LSFI and the Ministry of Finance as well as an Inclusive and Innovative Finance Strategy issued in 2021 by the Directorate for Development Cooperation and Humanitarian Affairs of the Ministry of Forei

271、gn and European Affairs.Sustainability has also been determined as a general objective to lead all aspects of public administration,including inter alia the(public)University of Luxembourg.27ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONLUXEMBOURGS SUSTAINABLE FINANCE ECOSYSTEM continuedSource:h

272、ttps:/gouvernement.lu/dam-assets/documents/actualites/2018/10-octobre/04-sustainable-finance/Luxembourg-Sustainable-Finance-Roadmap-WEB.pdf https:/lsfi.lu/wp-content/uploads/2021/02/Luxembourg-Sustainable-Finance-Strategy_EN.pdfhttps:/cooperation.gouvernement.lu/dam-assets/politique-cooperation-acti

273、on-humanitaire/documents-de-reference/Inclusive-and-innovative-finance-strategy.pdfABSL Luxembourg Bankers Association IFORDInvesting for DevelopmentACALuxembourg Reinsurance Association INDRNational Institute for Sustainable DevelopmentADAAppui ou Developpement AutonomeINFINEInclusive Finance Netwo

274、rk LuxembourgAFIAlliance for Financial InclusionICFPLuxembourg European Investment Bank(BB)Climate Finance PlatformALFILuxembourg Investment Fund AssociationLGXLuxembourg Green ExchangeBCLCentral Bank of LuxembourgLHOFTLuxembourg House of Finandal TechnologyCAACommissariat Aux AssurancesLISERLuxembo

275、urg Institute of Socioeconomic ResearchCSDDHigh Council for Sustainable DevelopmentLISTLuxembourg Institute of Science and TechnologyCSSFCommission de Survelliance du Secteur FinancierLPEALuxembourg Private Equity AssociationETKADevelopment of Ethical MoneyLSFILuxembourg Sustainable Finance Initiati

276、veE-MFPEuropean Microfinance PlatformLUXDEVLuxembourg Development Cooperation AgencyFDCFonds de CompensationLFFLuxembourg For FinanceFDLUXFondotion du LuxembourgLUXFLAAGLuxembourg Finance Labelling AgencyFSILLuxembourg Intergenerational Sovereign FundMICROLUXMicrofinance InstitutionHOTHouse of Train

277、ingMINMicro Insurance NetworkICSDInterdepartmental Sustainable Development Commission SPTFSocial Performance Task ForceICFAInternational Climate Finance AcceleratorUNILUXUniversity of LuxembourgSTRATEGY AND COORDINATIONINDUSTRY REPRESENTATIVESSUPERVISORS LABELSEDUCATION,BUSINESS INCUBATIONINTERNATIO

278、NAL ORGANIZATIONSNETWORKSSIGNIFICANT FUNDSSPECIALIST SERVICESLSFI LFFCSSFUniversit du LuxembourgAFIINFINELMDFLuxembourg Green ExchangeICSDABBLCAAHouse of TrainingADAEuropean Microfinance PlatformFDCETIKACSDDALFIBCLLGX AcademySPTFMicro Insurance NetworkFSILMicroluxLUXDEVACANDRLISTLCFPLPEALUXFLAGLISER

279、Fondation de LuxembourgLHOFTICFA28ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONTHE UKS SUSTAINABLE FINANCE ECOSYSTEMThe UK has a well-established ecosystem featuring national and international participants,strong expertise,large size,capital,and strong policy support to scale-up sustainable fin

280、ance.Source:The Global City,available at:https:/www.theglobalcity.uk/championing-sustainable-finance;Research provided by ADA Chair in financial Law(Inclusive Finance).PARTICIPANTS ROLES IN SUSTAINABLE FINANCEUKS STRENGTHS AND OFFERINGSGovernment and regulatorsBuilding a green financial system throu

281、gh policy and regulations to drive momentum for sustainable finance Targeted policies and regulations to systematically change the financial system Thought leadership by promoting best practices in the UK and internationallyMarket infrastructure and domestic standard-setting bodiesProviding platform

282、s and tools to commercialize and scale up sustainable finance Pioneers in innovations of platforms and tools Ideal location for knowledge exchange Thought leadership through standard setting and promoting ESG integrationInvestors and investment managersInvesting by considering sustainability factors

283、 and for positive impacts Great size and depth of international capital pool Strong capability in implementing sustainable investment strategyCorporates and issuersSupplying green finance opportunities by developing qualified projects and products Strong ESG awareness and integration The hub for bot

284、h UK and international issuersProfessional services providersProviding supporting services to investors and issuers The global finance center with top talent and expertise in sustainable finance Innovative solutions for sustainable financeSTRATEGY AND COORDINATIONORGANIZATIONS ADVERTISING AND PROMOT

285、INGFINANCIAL INDUSTRY AND REGULATORSRESEARCH AND BUSINESS INCUBATIONNETWORKS,FORUMSSIGNIFICANT FUNDS AND CHARITYSPECIALIST SERVICESG F Taskforce EfecaCBIFCAUKRIEKNCIFs,ICFSalix FinanceGFIOEPABI,BIBAFRCOxSFGCFRFUKSPFGIBTCFD Taskforce Access CISITPRCISLUN GCN UKFloodReUKNIBODA CSBCFAPSRUCL ISRUKSIFGSG

286、Carbon TrustBIIImpactIFoASOAS CSFFIPFToynbee HallCG DPMaPS3keelLSXUKSACCLABig Society CapitalFair4AII FinanceYFFUK FinanceCatapultShareActionUKCICoL BSIBoE(PRA)CGFIClientEarthOpen BankingCFITABI Association of British Insurers CGFICentre for Greening Finance and InvestmentAccessAccess The Foundation

287、 for social investment CIFsClimate Investment Funds BIIBritish International Investment(former CDC)CISIChartered Institute for Securities and InvestmentBIBABritish Insurance Brokers Association CISLCambridge Institute for Sustainability LeadershipBoE(PRA)Bank of England(Prudential Regulatory Authori

288、ty)ClientEarthClientEarth BSCBig Society Capital CoL CorpCity of London Corporation BSIBritish Standards Institution CSBCouncil for Sustainable Business Carbon Trust Carbon Trust EFEsmee Fairbairn Foundation CatapultCatapult Network EfecaExperts in Sustainable Forest&Agricultural AdviceCBIChartered

289、Banker Institute EKNEcosystems Knowledge NetworkCCLAChurches,Charities,and Local Authorities Investment Management limited Fair4All FinanceFair4AIl Finance CFA SocietyChartered Financial Analyst Society of the UK FCAFinancial Conduct Authority CFITCentre for Finance,Innovation and Technology FIPFFin

290、ancial Inclusion Policy Forum CFRFClimate Financial Risk Forum Flood re Fund Flood Re Fund CGDPCentre for Global Disaster Protection FRCFinancial Reporting Council 29ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONEFFECTIVE INTERMEDIATIONTechnology is also a powerful tool when making any IGF appro

291、ach operational.For instance,central banks could provide an online tool for checking whether a given project qualifies for privileged interest rates due to its IGF footprint.50In addition,technology can form part of the new foundational infrastructure that lowers the costs of IGF,for example,by redu

292、cing the costs of access to data through a standardized platform that bundles all financial and sustainability data.THE EUS SINGLE ACCESS POINT FOR SUSTAINABILITY AND FINANCIAL INFORMATION(ESAP)Sustainability information(understood as social and environmental dimensions)may be made accessible at a s

293、ingle access point to reduce information costs,facilitate market approaches,combat greenwashing,and reduce agency conflicts.An important example is the European Single Access Point(ESAP)project,which will be infrastructure supervised by the European Securities and Markets Authority for the submissio

294、n of all mandatory ESG and financial disclosures required under EU law.It will be a single place where standardized data is submitted via market participants in digital form.This data can then form the basis not only for monitoring compliance with regulatory requirements both financial and non-finan

295、cial but also as a source of data for investors and governments to use in monitoring and evaluating investment decisions and progress in terms of SDG and IGF objectives in relation to financial and economic objectives and performance.INFRASTRUCTUREInfrastructure has two dimensions.The first involves

296、 ensuring that technical solutions allow those at risk of financial exclusion to connect to the financial system,while the second facilitates that financial institutions can effectively provide services to this clientele,for example,at costs as low as possible.ENSURING ACCESSOne major infrastructure

297、 element includes Digital Financial Services.As shown in the AFI report,“FinTech for Financial Inclusion(FT4FI),”a robust Fintech ecosystem is a powerful tool to support financial inclusion,47 through electronic payments,client identification,client onboarding and long-distance access to financial s

298、ervices,addressing the last-mile-issue.48 Fintech can also play an important role in supporting and implementing IGF policies,as both require financial,technical,and social innovations.For instance,regulations may promote IGF innovations by opening regulatory sandboxes and innovation hubs to them tw

299、o regulatory tools that have come to prominence in the Fintech context.49 THE BAHAMAS SAND DOLLAR AND DIGITAL SOCIAL PAYMENTS IN FIJIThe Bahamas provides an interesting example how DFS can make payments disaster-proof.After the devastating impact of Hurricane Dorian in 2019,the central bank designed

300、 the first operational central bank-issued digital currency(CBDC)in the world,the Sand Dollar,to guarantee access to payments for everyone,even in remote places and in the wake of natural calamities,when internet service might be disrupted.Anyone with a data-enabled mobile phone can use the Sand Dol

301、lar.The use of digital finance and mobile money to disburse social payments has been a big success in Fiji.Under its Help for Homes Initiative in 2016,the Fijian government has partnered with technical services providers and leveraged digital payments to disburse FJD130.4 million(roughly USD57.3 mil

302、lion)in aid to those affected by Tropical Cyclone Winston.The number of registered users to the digital payment platform increased by 12.3 percent in less than a year,followed by an even larger increase but reduced to a certain extent after the government aid program expired.The Fijian government be

303、lieves that G2P payments need to evolve and has taken action to promote green financial inclusion via digital finance inclusion.Source:IGFWG.2022.“Leveraging Digital Financial Services to advance Inclusive Green Finance Policies”;Alliance for Financial Inclusion.2018.“Reserve Bank of Fijis Experienc

304、e with Financial Inclusion and Climate Change.”47 Alliance for Financial Inclusion.2018.“FinTech for Financial Inclusion:A Framework for Digital Financial Transformation.”Available at:https:/www.afi-global.org/publications/fintech-for-financial-inclusion-a-framework-for-digital-financial-transformat

305、ion/48 Ibid;D.W.Arner,J.Barberis and R.P.Buckley.2016.“The Evolution of FinTech:A New Post-Crisis Paradigm?”47(4)Georgetown Journal of International Law 1271.49 R.P.Buckley,D.W.Arner,R.Veidt and D.A.Zetzsche.2020.“Building FinTech Ecosystems:Regulatory Sandboxes,Innovation Hubs and Beyond.”61 Washin

306、gton University Journal of Law&Policy,55.50 See,for example,the Monetary Authority of Singapore,“Green FinTech.”Available at:https:/www.mas.gov.sg/development/fintech/Green-FinTech.See also the European Investment Banks Green Eligibility checker.Available at:https:/greenchecker.eib.org/30ROADMAP FOR

307、 INCLUSIVE GREEN FINANCE IMPLEMENTATIONDATA&MODELSData and models are at the heart of the IGF mission but are lacking in terms of their size and scale.MODEL DEVELOPMENTIn particular,models linking sustainability data to financial data are in their infancy.So far,most models used in practice rely on

308、exclusionary lists of more or less sophistication.Advanced models relying on proven causal links or at least correlations between allocating finance and achieving sustainable outcomes are in high demand.51 This state may improve,over time,as more structured data is available and put to econometric t

309、esting.Yet,it is crucial that regulators further data generation within their jurisdiction to create models reflecting local circumstances to provide for locally optimal outcomes of any IGF framework.Models can hardly be put to good use in the absence of expansive testing in theoretical model portfo

310、lios,and then smaller experimental portfolios before they are set to practice within larger financial institutions to steer lending and investments.MEASURING IGFRegulators may further model development by policy approaches that:produce quantitative structured data and estimations identify innovative

311、 measurement techniques on social and sustainability factors require granular reporting to the market at large(as this ensures access to the public and academia),with reported data reflecting national priorities facilitate granular data collectionFurther,analogous to the Hackathon in the FinTech dom

312、ain,IGF-oriented“model contests”and other innovative methods that incentivize the search for algorithm-based IGF operations and risk steering by financial institutions could inspire the development of new measuring techniques.The role of regulators and central banks could range from that of a modera

313、tor over a reviewer,a developer of innovative measurement techniques to that of a data host for official sustainability data,depending on resources and expertise.LEVERAGING DIGITAL FINANCIAL SERVICES TO ADVANCE IGF POLICIESLeverage Digital Financial Services to Advance IGF Policies View hereA joint

314、initiative between the AFIs IGFWG and the Digital Financial Services Working Group(DFSWG)recently launched the“Leverage Digital Financial Services to Advance IGF Policies”special report.This report shows how digital payment platforms,digital financial products,and enabling policies can make a differ

315、ence in helping the most vulnerable populations adapt to and mitigate climate risk and environmental degradation:for low-income,rural households payment services function as an informal,yet essential risk management device against climate-related economic shocks;government to person(G2P)payments may

316、 be channeled to those in need in times of crisis and disasters;DFS facilitates savings and loans with a green tone,and niche services,such as pay-as-you-go solar as a green digital asset,enhanced digitalization in the field of index agro-insurance providers as well as digital agro-market places.Six

317、 main recommendations can be formulated on DFS-based IGF initiatives:1.Allow non-banks to establish digital retail payment platforms.2.Consider policy sequencing.3.Lower barriers to entry by adopting a risk-based approach.4.Remove obstacles to private-sector investments in digital financial inclusio

318、n for green purposes.5.Focus on supervisory engagement and outreach.6.Address gaps in access by encouraging uptake among targeted customer groups.Source:IGFWG.2022.“Leveraging Digital Financial Services to advance Inclusive Green Finance Policies.”51 See Dirk A.Zetzsche and Linn Anker-Srensen.2020.“

319、Regulating Sustainable Finance in the Dark.”23 EBOR 47,72.31ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATIONMEASURING IGFThe lack of data is one of the main obstacles in defining and monitoring IGF policies.Challenges in collecting IGF data include data availability,level of disaggregation,data re

320、liability,methodological challenges,comparability of data and open issues on compatible green finance definitions,and green taxonomies.Several initiatives are seeking to improve the identification and measurement of progress regarding financial inclusion and financing climate change mitigation and a

321、daptation as separate issues.There is,however,no unified approach to address these issues.A joint initiative between the IGFWG and the Financial Inclusion Data Working Group(FIDWG)addressed these issues in two innovative publications.The first is a guideline note on collecting IGF-related data from

322、the demand-side,specifically,from demand-side surveys(DSS).The Reserve Bank of Fiji has incorporated a section into its 2020 Financial Services DSS that will provide a deeper understanding of coping strategies by different segments of the society and in particular,womens resilience to climate change

323、.1Their recent publication identifies the priorities of AFI members concerning inclusive green finance regulatory reporting that may be relevant to other policymakers and financial regulatory authorities that oversee financial inclusion and climate change development agendas.The report is built up o

324、n three themes that were found to be recurring priorities for AFI members.2The report highlights some AFI member examples,such as Bangladesh Bank which has made a steady effort to collect and share data on green finance,beginning in 2013 with the publication of the Sustainable Finance Departments“Qu

325、arterly Report on Green Banking Activities of Banks&Financial Institutions and Green Refinance Activities”.The report was introduced for its green banking activities but now also covers components of sustainable finance defined in their Sustainable Finance Taxonomy.The Bangko Sentral ng Pilipinas(BS

326、P)has also been collecting and analyzing environmental and banking financial data monitoring the effects of extreme weather on the stability of the financial system,while the Reserve Bank of Fiji included climate-related questions into its Financial Inclusion Demand Side Survey.Sources:1.Alliance fo

327、r Financial Inclusion.2021.“Demand-Side Approach to Inclusive Green Finance Data Collection.”2.Alliance for Financial Inclusion.TBP.“Measuring IGF.”I.ASSESSING THE INTEGRATION OF CLIMATE RISK MANAGEMENT IN MSME SEGMENTSII.MEASURING FUNDING FOR IGF III.MEASURING THE PROVISION OF INCLUSIVE GREEN FINAN

328、CIAL PRODUCTS DATA THEMESFinancial regulators and policymakers need to ensure that financial institutions are adequately managing the climate risks of their portfolio of customers.Financial regulators and policymakers need to monitor the availability of capital for funding inclusive and green segmen

329、ts.Financial regulators and policymakers need to track the provision and delivery of inclusive green financial products(supply side).TYPES OF DATASupervisors,financial institutions,third party data providers,survey data,environmental data,stress test results.Funding allocations,disbursements/utiliza

330、tions,fund performance indicators.Supply-side financial and transactional data such as volumes and number of financial instruments deployed.DATA SOURCESSupervisors,Financial Institutions,Third-party Data providers(credit Bureaus,environmental ministries,rating agencies,ESG data firms,etc.).DFIs,IGOs

331、,climate and sustainable finance/investment commissions,finance ministries,investment funds.Financial institutions,payment processors,insurance providers,credit guarantee providers.32ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATION GREEN FINTECHCombining the ecosystem with infrastructure and data

332、dimension results in a powerful wide-ranging grouping of quality services for an IGF-oriented financial sector that may address some of the pain points of any sustainability and IGF-approach in particular.For instance,Blockchain and distributed ledger technology(DLT)may be used to render sustainabil

333、ity information traceable and less easy to manipulate.52 A few examples can highlight the scope of these Green Fintech business models.GREEN FINTECHTred,a UK fintech,launched the countrys first green debit card which helps people spend more sustainably.The Tred card tracks a users carbon footprint,helps reduce their impact,and works to offset emissions as it funds reforestation projects with card