Profiling Financial Innovation for Sustainability in France:

UNEP Inquiry’s Global Report on the Design of a Sustainable Financial System & a Country Report on France

4 November 2015 from 5.30pm Salon Michel Debré
French Ministry for the Economy and Finance
139 rue de Bercy – 75012 Paris

On 4 November, I4CE – Institute for Climate Economics and UNEP Inquiry fostered a discussion on the steps taken – and the challenges and opportunities ahead – to build a sustainable financial system. The event presented the conclusions of the recently published UNEP Inquiry global report “The Financial System We Need” followed by the French context through the presentation of the case study on France written by I4CE.

The global report has charted how the full potential of the financial system needs to be harnessed to deliver the transition to sustainable development. Whilst the effects of the 2008 financial crisis continue to haunt the global economy, an unprecedented recognition has emerged of the need to shape a financial system that is both more stable and more connected to the real economy. Now a new generation of policy innovation is aiming to ensure that the financial system serves the needs of inclusive, environmentally-sustainable, economic development.

The French case study presents lessons drawn from the French ongoing experience in improving the integration of sustainability issues that could be shared with other countries. It focuses on both the climate-related issues that have recently received significant attention (Article 173 of the 2015 Law on Energy Transition for Green Growth) and their place within the development of broader Environmental, Social and Governance (ESG) issues. The regulatory and actor-initiated dynamics that have shaped the last two decades have both led to the emergence of an ‘ecosystem’ of commercial, public and non-profit actors and experts involved in the appropriation and integration of sustainability issues across the sector.

The event concluded with a roundtable discussion between regulators and financial institutions on the challenges ahead and next steps.

About the organizers

The Inquiry into the Design of a Sustainable Financial System has been initiated by the United Nations Environment Programme to advance policy options to deliver a step change in the financial system’s effectiveness in mobilizing capital towards a green and inclusive economy – in other words, sustainable development.

I4CE- Institute for Climate economics is an initiative of Caisse des Dépôts (CDC) and Agence Française de Développement (AFD). This think tank provides independent expertise and analysis when assessing economic issues relating to climate & energy policies in France and throughout the world.

Key quotes

From UNEP Inquiry Global Report

• Financing for sustainable development can be delivered through action within the financial system, as well as the real economy.
• Policy innovations from developing and developed countries demonstrate how the financial system can be better aligned with sustainable development.
• Systematic national action can now be taken to shape a sustainable financial system, complemented by international cooperation.

From the French Case Study

• The French financial system is both deep and diversified, with over € 12 trillion of assets that play an important role in financing the French ‘real’ economy.
• The increasing inclusion of sustainability issues builds on four pillars: government policy, non-profit expertise, commercial expertise and financial operators.
• Capital is mobilized for sustainable finance through a mix of targeted public and private initiatives supporting market structuring, labelling and most recently green bonds.
• Most recently, Article 173 of the 2015 Law on Energy Transition for Green Growth is taking shape to be a supervision-based coherent package aimed at giving individual institutions enough room to implement the regulation in a way that fits their needs and business model.
• Next steps and challenges coming ahead to keep the momentum alive in a post-COP21 context are threefold: i) overcoming technical challenges to adequate application in practice; ii) ensuring the materiality and usefulness of the resulting information for financial actors; and iii) its ability to spark a larger dynamic with expanded impact – both in France and abroad.

More coverage on the UNEP website.