UNEP calls for “loud revolution” to complete the transition to a world green economy

Addis Ababa, Ethiopia, 13-16 July 2015 - The United Nations Environment Programme (UNEP) has called for a “loud revolution” to mobilise the trillions of dollars needed for the transition to a greener, more sustainable world economy. The call, which came at the Third International Conference on Financing for Development at Addis Ababa, Ethiopia, urged individual countries and the international community to take action to introduce new, and expand upon existing, innovations to finance sustainable development.

The Conference, organised under the auspices of the UN General Assembly, was held to support the implementation of the post-2015 sustainable development agenda. It gathered together over 30 heads of state and government, more than 110 government ministers and over 1000 business and civil society representatives. Key areas under discussion included the sources of development finance and the synergies between financing objectives across the three dimensions of sustainable development – people, profit and the planet.

UNEP’s own efforts to aid the transition to a green economy have been led by the UNEP Finance Initiative (FI) and the UNEP Inquiry into the Design of a Sustainable Financial System. Of the nearly 200 side events at the conference UNEP hosted a side event on sustainable finance on ensuring policy coherence and an enabling environment at all levels for sustainable development.

The Under-Secretary-General of the United Nations and UNEP Executive Director, Mr Achim Steiner presented PAGE at the side-event – Redesigning Finance for Sustainable Development: Aligning Institutions and Incentives for the Real Economy – at which the other speakers were Mr Simon Zadek,  Co-Director, UNEP Inquiry into the Design of a Sustainable Financial System, Ms Isabella Lövin Minister for International Development Cooperation, Sweden, Mr Abdalla Hamdok, Deputy Executive Secretary of the UN Economic Commission for Africa, Ms Abigail Herron, Head of Responsible Investment Engagement, Aviva Investors, and MrMohamed Omran, Chairman of the Egyptian Exchange.

Since the 2008 financial crisis, a ‘quiet revolution’ has been taking place across the financial world but an entire redesign is now needed to fully achieve the world’s sustainable development goals. Risk and performance are already being reframed to include environmental sustainability as key components and drivers of value for financial institutions, and environmental risks now needed to be understood as a systemic risk to financial stability.

Furthermore, a significant portion of innovation and leadership is now coming from the global South, with a growing alignment of institutions, incentives and policy in a range of countries. Private finance is no longer a North-South issue. The principles, tools and data of the financial sector are also maturing, with financial institutions across the world taking collective action to develop global principles, standards and tools on sustainable finance. 

Mr Eric Usher, acting Head, UNEP FI said:  “A differentiated approach is now needed to align public policy and actors and financial markets. Focused attention is required to create the conditions, policies and enablers, and to build the capacity for both public and private finance to work together for sustainable development.  I hope that all stakeholders – policy makers and financial institutions – will soon draw up the necessary roadmap for a catalytic change in the financial system for both public and private finance to work for sustainable development. In short, we need a loud revolution to complete the transition to a green economy.”

 Redesigning Finance for Sustainable Development: Aligning institutions and incentives for investing in the real economy