Abstract
This chapter offers an overview of the main discussions provided in the book and states some concluding remarks. The main drivers of the development of green finance to date are first recalled, in particular as concerns the engagement of international financial organisations and the emergence of concrete market incentives for investors to issue or to buy green securities. Then, the importance of the realisation of some key conditions necessary for mainstreaming green finance is further discussed, including the proper inclusion of environmental risks in the investors’ decision-making process, the effective channelling of the demand, the creation of specific green financial products and facilities and, last but not the least, the political commitment of the international community toward the environment goals.
The contents included in this chapter do not necessarily reflect the official opinion of the European Commission. Responsibility for the information and views expressed lies entirely with the authors.
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Notes
- 1.
The 17 Sustainable Development Goals were adopted by world leaders in September 2015 at an historic UN Summit in New York and officially entered into force on 1 January 2016. They are the key part of the 2030 Agenda for Sustainable Development and they universally apply to all countries, hence being a mobilising effort to end all forms of poverty, fight inequalities and tackle climate change.
- 2.
The Paris Agreement’s central aim is to strengthen the global response to the threat of climate change by keeping the global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. Additionally, the agreement aims to strengthen the ability of countries to deal with the impacts of climate change. The Paris Agreement requires all Parties to put forward their best efforts through nationally determined contributions (NDCs). This includes requirements that all Parties report regularly on their emissions and on their implementation efforts. The Paris Agreement entered into force on 4 November 2016, 30 days after the date on which at least 55 Parties to the UNFCCC accounting in total for at least an estimated 55% of the total global greenhouse gas emissions have deposited their instruments of ratification, acceptance, approval or accession.
- 3.
The Convention that brought the Paris Agreement is also called COP21, as indicating the 21st Convention of the Parties.
- 4.
In June 2017, US President Donald Trump announced his intention to withdraw his country from the Paris Agreement. Under the agreement itself, the earliest effective date of withdrawal for the United States is November 2020.
- 5.
Source: Climate Bond Initiative (2018).
- 6.
As an example, investments of around EUR 520–575 billion annually have been estimated to be necessary in the EU only in order to achieve a net-zero greenhouse gas economy in the 2050 horizon. Source: EC (2018a).
- 7.
In the financial market, the recognition as engaged in sustainable activities is particularly important for dual bottom-line institutions, such as cooperative or saving banks (see also Migliorelli 2018).
- 8.
An example is the European Union (EU) emissions trading system (ETS). Launched in 2005, the ETS is a tool that would support the effort to cut greenhouse gas (GHG) emissions by at least 40% by 2030 compared to 1990 levels. It obliges more than 11,000 power plants and factories to hold (and pay) a permit for each tonne of CO2 they emit in order to provide a financial incentive to pollute less. Companies have to buy them through auctions and the price is affected by demand and supply (even though some of the permits are allocated for free, particularly in sectors at risk of having companies to move production to other parts of the world with laxer emission constraints). One of the main weaknesses of such a system in fighting climate changes lies in the global dimension of the problem. As a matter of fact, global warming can be hardly managed without a global commitment. For such a reason, it could be argued that climate change will keep impacting also the virtuous countries if a global solution is not reached.
- 9.
For a more detailed analysis, see Chap. 6.
- 10.
By the term additionality it is here intended a policy-triggered additional amount of financial resources.
- 11.
In Europe, the total assets of the banking sector peaks up to 350% of the aggregate GDP. Source: EBF (2012).
- 12.
- 13.
Following the Action Plan for a greener and cleaner economy, in May 2018 the European Commission adopted a package of implementing measures including: a proposal for a regulation on the establishment of a framework to facilitate sustainable investment (this regulation establishes the conditions and the framework to gradually create a unified classification system—or taxonomy—on what can be considered an environmentally sustainable economic activity); a proposal for a regulation on disclosures relating to sustainable investments and sustainability risks and amending Directive (EU)2016/2341 (this regulation aims at introducing disclosure obligations on how institutional investors and asset managers integrate environmental, social and governance factors in their risk processes); a proposal for a regulation amending the benchmark regulation (to create a new category of benchmarks comprising low-carbon and positive carbon impact benchmarks, which should provide investors with better information on the carbon footprint of their investments). See also Chap. 6.
- 14.
EC (2018a).
- 15.
Source: World Research Institute. Data referred to 2014. As concerns the other most polluting countries, China counts for about 26% of the GHG emissions, the U.S. for 15%, India for 6%, Russia for 5%, Japan for 3%, Brazil for 2%.
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Migliorelli, M., Dessertine, P. (2019). Green Finance Today: Summary and Concluding Remarks. In: Migliorelli, M., Dessertine, P. (eds) The Rise of Green Finance in Europe. Palgrave Studies in Impact Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-22510-0_11
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