Mobilizing the world’s capital is essential for the transition to a sustainable, low-carbon economy. Today, however, too little capital is supporting the transition, and too much continues to be invested in a high-carbon and resource-intensive, polluting economy.
Market participants and others recognize that prevailing rules and incentives governing financial markets can disadvantage long-term, sustainable behavior. Long-term environmental risks are not being effectively counted and green opportunities are inadequately valued. Such distortions can lead to a misallocation of capital and a danger of systemic risks to the economy and the natural environment.
There is an urgent need to accelerate the transition to a green economy by better aligning the financial system to the resilience and the long-term success of the real economy. The UNEP Inquiry is intended to support such actions by identifying best practice, and exploring financial market policy and regulatory innovations that would support the development of a green financial system.
The Inquiry will produce a final options report as well as technical papers throughout its 18-24 month life from January 2014. It will map current best practice, draw together principles and frameworks, catalyze new thinking, and ultimately lay out a series of options for advancing a green financial system. Engagement will take place with a wide range of policy institutions, initiatives focused on green finance and financial market reform, and practitioners across the financial sector and the wider business community, as well as civil society and other actors concerned with the green economy and financial markets.
The Inquiry's current set up phase will ensure it is designed with guidance from practitioners and experts, and establish a network of world-class advisors and researchers. Engaging with existing initiatives will ensure that it can effectively convene and catalyze broad debate that supports the crystallization of options for advancing a more systematic approach to developing a green financial system.
Download summary on the Inquiry