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PROMOTING INCLUSIVE GREEN FINANCE INITIATIVES AND POLICIES
SECTION 2: PROMOTING COORDINATION Once the catalyst for climate change action is triggered, the initial response from government is often ad hoc, politically motivated and/or disjointed. Financial sector regulators will also be bound by their mandates, which will be perceived as limited in scope. For example, measuring climate risk at the outset will be nearly impossible since those data points will not likely exist. However, waiting on the sidelines for other government agencies to act could expose financial regulators to the risk of not delivering their mandates.9 ALIGNMENT WITH THE NATIONAL VISION Getting strategic alignment right at the national level was often quoted by AFI members as the first and most important step in the smooth implementation of IGF initiatives. For example, national development plans will often target agrarian reform, SME development, and technology innovation, all of which can be linked to financial inclusion and environmental sustainability. However, without the correct alignment of public sector actors and links to other national initiatives, the
implementation of IGF initiatives may suffer from a lack of resources, competing agendas and public criticism. For countries that have adopted the UN Sustainable Development Goals (SDGs), there is an opportunity to link IGF to poverty alleviation (SDG 1), gender equality (SDG 5), clean tech (SDG 7) and climate action (SDG 13).
Jurisdictions that have committed to nationally determined contributions (NDCs) to reduce carbon dioxide emissions under the Paris Agreement, and/or have national biodiversity strategies and action plans under the international Convention on Biological Diversity (CBD), should carefully consider how these declarations can be integrated or aligned with sustainable finance initiatives. The difficulty of achieving alignment should not be underestimated. AFI members indicated that this phase requires intensive coordination and leadership by agencies to identify appropriate actions to respond to national objectives. Being proactive in this phase is critical as government will require financial regulators to lead in their area of expertise — financial services — but also to “think outside the box” in addressing untraditional risks and challenges posed by climate change.
9 (Bolton, et al., 2020)
Fisherman life and activities on boat in the morning at Bangpra reservoir, Chonburi, Thailand. (Photo by Jamikorn Sooktaramorn/Shutterstock)
