In March 2018, the European Union committed to lead the way in reforming the financial system to support the transition towards a sustainable economy, with the adoption of the first ever Action Plan on Financing Sustainable Growth and the successful first edition of the High-Level Conference on sustainable finance. One year on, today's conference provides the opportunity to foster international cooperation, explore synergies, and demonstrate strong commitment towards a coherent international financial system that supports channelling private capital towards sustainable projects. This is also part of the Capital Markets Union's (CMU) efforts to connect finance with the specific needs of the European economy, thereby contributing to the EU's carbon-neutral agenda.
President Jean-Claude Juncker said: “This conference sends a strong signal about the need to scale up sustainable finance globally. It shows the determination of the EU and its partners to enable the transition to a climate-neutral and circular economy, supported by private capital. The establishment of an international network on sustainable finance would support this goal beyond the EU. Given the urgency and importance of this project, I hope this momentum continues well into the next years.”
Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union said: “The European Union will stand by its commitments made under the Paris Climate Agreement. As part of this agenda, the EU was an early mover on sustainable finance by recognising that boosting private capital is essential for supporting the transition towards a climate-neutral and sustainable economy. By now, other countries have made substantial progress in this area. It is time for us to join forces and make sustainable finance go global.”
In its recently adopted Reflection Paper Towards a Sustainable Europe by 2030, the Commission considered that it would be opportune to establish an international network of jurisdictions from emerging markets, developed and developing countries that are committed to advancing sustainable finance.
Already yesterday, Vice-President Dombrovskis held informal discussions with high-level representatives from leading non-EU jurisdictions, notably Argentina, Canada, China, India, Japan, and Morocco to explore the way forward for establishing such a Network. These discussions were also attended by representatives from international organisations and initiatives. A follow-up meeting at a working-level will be organised shortly.
In this vein, the Commission also welcomes and supports the initiative for a Coalition of Finance Ministers for Climate Action, co-led by Finland and Chile, and supported by the World Bank. The Coalition's work on accelerating the transition to a climate-neutral economy through fiscal and economic policies is much needed and matches with the Commission's ambition to achieve transition to a climate-neutral economy by 2050. It would complement the Network on sustainable finance, which would focus on coordinating on national and regional financial services policy initiatives that embed sustainability in the financial sector.
Given that about €6.2 trillion of annual investment in low-carbon infrastructure, such as energy, transport, buildings and water is needed globally until 2030 to limit global warming to 2 degrees Celsius, the objective of scaling up of sustainable finance is of particular importance. In the European Union alone, the achievement of the Paris-aligned energy and climate policy targets will require an additional annual investment of €180 billion between 2021-2030 compared to business as usual. Increasingly stretched public funds will not meet those investment needs alone. The Commission will continue its efforts to maintain strong international cooperation on sustainable finance by working very closely with all relevant international partners, with the aim to achieve greater alignment of the various financial services policy frameworks and tools that embed sustainability in the financial sector.
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