Scientia Professor Ross Buckley at UNSW Law & Justice has co-authored an international research report launched at the Alliance for Financial Inclusion (AFI) side event at the 2022 United Nations Climate Change Conference (COP27).
The Roadmap to Inclusive Green Finance was written by AFI’s Inclusive Green Finance Working Group (IGFWG) and a team of scholars including Professor Buckley, Professor Dirk Zetzsche at the University of Luxembourg and Professor Douglas Arner at the University of Hong Kong.
Inclusive Green Finance (IGF) policy recognises the role of financial inclusion in building resilience to climate change impact and enables small-scale mitigation among the world’s most vulnerable people. It is a coherent, holistic approach to integrating both financial inclusion and environmental factors in financial regulation.
For the first time at COP, AFI member institutions, central banks and other financial regulators from around 80 developing markets, shared their IGF policy solutions that contribute to solving one of humanity’s main challenges – climate change. Focusing on how to use financial inclusion to enable vulnerable people to adapt and mitigate climate change, a panel explored how central banks and financial regulators are contributing to climate action.
“While mutual learning from other countries remains important, we found that financial inclusion and climate change concerns differ from country to country. No one size fits all. Solutions must be country-specific and tailored to the necessities of each AFI member”, Professor Zetzsche said.
Professor Buckley emphasises the need for constant updates and reassessment.
“If regulators want too much too soon, they will achieve nothing. A clear focus on national priorities is crucial for any successful IGF strategy. Each step will require refinement over time, in proportion to the capacity of regulators and regulated institutions,” he said.
Professor Arner highlights the importance of capacity building.
“Our research has shown that IGF requires active regulators. Regulators will need more of their existing resources and entirely new types of resources in technology, hard science and data generation.”
AFI members, central banks, and other financial regulators, endorsed the Sharm El Sheikh Accord on Inclusive Green Finance five years ago during AFI’s annual flagship Global Policy Forum. Under the IGF remit, financial institutions are providing vital support to those navigating an uncertain environment by promoting green products within savings, credit, insurance, money transfers and new digital delivery channels. IGF plays a key role in enabling the implementation of the UN Sustainable Development Goals (SDGs), particularly SDG 1 (no poverty), SDG 7 (affordable and clean energy) and SDG 13 (climate action).