SIF Ireland partners will take a deep interest in a new report launched by the UNEP hosted Financial Centres for Sustainability (FC4S) network – which amounts to a detailed roadmap for the entire sustainable finance system worldwide.
Called ‘Nudging the Financial System: A network analysis approach’ report, it focuses on sustainable finance efforts currently undertaken by individual countries to achieve, by 2030, all 17 of the UN Sustainable Development Goals.
The report also takes in regional groups, multilateral development banks (MDBs), international organizations (IOs), private sector entities, and non-governmental organizations (NGOs).
Context for this important report was provided by Stephen Nolan, in his role as Managing Director of the FC4S network. The report is the result of a collaboration between UNEP, FC4S and the United Nations Development Programme Finance Sector Hub (UNDP FSH).
The report maps out and analyses the complex array of relationships of sustainable finance partnerships while highlighting how the sustainable finance ecosystem can better work together to achieve the global development goals of the next decade. It does so by identifying exactly how these networks function and the interplay between the different initiatives.
It shows that the current global sustainable finance network is composed of 115 different “partnerships,” 5,181 constituent members and more than 10,000 connections. Based on network analytics, the report shows that 75% of network participants is connected to only one partnership and only 13% of the network participants is connected to three or more other partnerships. This shows that the core of the sustainable finance agenda is mainly driven by a small number of network constituents, including financial institutions, regulators and MDBs.
Commenting, Stephen Nolan said: “To achieve the ambitious 2030 Agenda we will need trillions to finance it first. This report makes the case for sustainable finance to play a major role in fulfilling that agenda, and it does so by mapping and analysing the intricate relationships of sustainable finance partnerships, be they networks, pledges, coalitions, platforms or principles, to determine exactly how these networks function.”
Other key takeaways include:
- This exponential growth in sustainable finance initiatives highlights the mainstreaming of the sustainable finance agenda, but problems still remain. Many financial institutions have expressed confusion about the abundance of partnerships, which in turn could be a barrier to catalyse mass adoption
- The report also highlights that, on average, both banks and asset managers were involved in more than 10 initiatives, making them more central to the network than insurance providers and asset owners
- One of the major conclusions to come out of the report is that given the growth in network partnerships an effort by members of a sustainable finance network to increase and broaden the coordination of their activities can help the network develop, as well as express and sustain a more coherent structure at a higher level. This would allow for increased efficiency in system-wide outcomes and help to green the financial system and mainstream sustainable finance as one of the pillars to achieving the 2030 agenda.
Marcos Mancini, Head of International Partnerships, UNEP Inquiry, added: “Recent events have emphasised the interdependence of our economic and financial systems with nature. They showed that the decade ahead needs to be a decade of acceleration, one that drives transformative action and where the multilateral system converges to present a united front. This is no different for the sustainable finance agenda and the financial regulators and market players driving the agenda in this space.”
One of the major conclusions to come out of the report is that given the growth in network partnerships, an effort by members of a sustainable finance network to increase and broaden the coordination of their activities can help the network develop, as well as express and sustain a more coherent structure at a higher level. This would allow for increased efficiency in system-wide outcomes and help to green the financial system and mainstream sustainable finance as one the pillars to achieving the 2030 agenda.