More Greenbacks from Green Banks: Preparing for the Rio+20 Summit at the First Global Sustainable Finance Conference

"The challenges that we face are interrelated, so, if we are smart about it, if we spot and utilize the inter-connections among these problems, solutions to each problem can be solutions to all." -- UN Secretary-General Ban Ki-moon

The sustainable finance sector continues to surge on an international level, thanks in part to the first Global Sustainable Finance Conference, held earlier this month in Karlsruhe, Germany. Jointly organized by the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) and the E-Tech Center for Applied Environmental Technologies Germany under the auspices of the Philippines-based World Federation of Development Financing Institutions (WFDFI) and endorsed by the United Nations Environment Programme Finance Initiative (UNEP FI), the conference carried the theme "Greening Financial Institutions" and attracted 58 delegates from 25 countries across 5 continents, representing national financial institutions, NGO development agencies and multilateral development banks and organizations such as UNEP, the World Bank and the Asian Development Bank.

THE GLOBAL GREEN NEW DEAL

Focusing on the tenets put forth by UNEP’s 2009 "Global Green New Deal,” the conference featured some 20 presentations covering case studies, best practices and technical implementations that made the case for a post-recession economy organized around long-term sustainability that could also stimulate job growth, end poverty and support the triple bottom line of people, planet and profit. According to E-Tech Germany, the conference addressed "some of the most debated issues today -- environmental challenges, transforming economies, and particularly the decisive role of financial industry in these changing times where...social, economic and environmental sustainability is becoming imperative."

The delegates looked to innovative problem-solving, recognizing that "yesterday’s knowledge, expertise, experience and information are not sufficient to meet the challenges of today and tomorrow." In regard to the greening of financial institutions, the conference cast a wide net to include commericial banks, development financial institutions, SME banks, MFIs, leasing companies, equity firms, venture capital firms, asset managers and insurers.

GLOBAL SUSTAINABLE FINANCE NETWORK (GSFN) LAUNCHES

A conference highlight was the launching of the Global Sustainable Finance Network (GSFN), an international membership organization dedicated to the promotion of sustainable development through socially responsible finance. Another highlight was the creation of the Karlsruhe Declaration, a joint statement that, according to ADFIAP, not only "sets out the aspirations and contribution of the finance community to advance sustainable development," but also sends "a message to the Rio+20," the United Nations Conference on Sustainable Development, which will be held in Rio de Janeiro in June 2012.

Some of the green projects that the conference looked at included renewable energy projects, energy conservation, seawater desalination, water recycling, solid waste management, eco-transportation, low-emission cooling and heating systems, carbon capture and storage systems, photovoltaic panels, wind turbines, fuel cells, biogas plants, organic architecture, biotechnology and green IT. The increased interest in developing and investing in these wide-ranging technologies demonstrate that opportunity abounds in the move to low-carbon economies (LCEs).

In the United States, for example, professionally managed SRI (socially responsible investment) assets totaled USD 639 billion in 1995 and grew to USD 3.07 trillion in 2010 -- a rise of more than 380 percent, according to US SIF Forum for Sustainable and Responsible Investment. Worldwide, the trends are similar. Global investments in renewable energy in 2010 hit a record high of USD 211 billion -- about a third more than the USD 160 billion total investment of 2009 and a rise of 540 percent since 2004, according to the UNEP report "Global Trends in Renewable Energy Investment 2011," which was released in July.

MORE BANG FOR OUR BUCK NEEDED IN THE NEW AGE OF AUSTERITY

But though green investment has risen sharply, UN Secretary-General Ban Ki-Moon noted in a 2009 op-ed piece that overall, "we are entering a new age of austerity." He wrote, "We are facing more problems with fewer resources. National budgets have shrunk. Aid programs are being squeezed. Voluntary contributions are drying up." But he also sounded a note of optimism, saying that "the challenges that we face are interrelated, so, if we are smart about it, if we spot and utilize the inter-connections among these problems, solutions to each problem can be solutions to all. We can get more bang for our collective buck, peso and real, and find effective, efficient, enduring paths to a more sustainable, inclusive, and prosperous future."

While in Karlsruhe, Cora Conde of ADFIAP and Heidi Brueck of E-Tech Germany signed a memorandum of cooperation to advance sustainable finance, which ADFIAP defines as finance that "considers funding projects and enterprises that are socially beneficial, environmentally responsible and economically viable," and to also implement "programs and initiatives that contribute in the smooth functioning of the Global Sustainable Finance Network.". Indeed, at the Rio+20, the smooth functioning of global sustainable finance must be a central topic if we want to get more bang for that collective buck.

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NOTES

http://www.project-syndicate.org/commentary/kimoon7/English
http://www.etechgermany.com/GreeningFinancialInstitutions.pdf
http://www.adfiap.org/news/1st-global-sustainable-finance-conference-successful/
http://ussif.org/resources/pubs/trends/
http://www.unep.org/Renewable_Energy_Investment/documents/pdf/press_release_SEFI_v4_June_30_2011.pdf
Ibid., 1.
http://www.adfiap.org/news/adfiap-e-tech-germany-intensify-cooperation/

image: Solucar PS10 solar plant, located near Seville, Spain, utilizing a first-of-its-kind Solar Central Receiver System (CRS) producing electricity in grid-connected mode. (credit: afloresm, Wikimedia Commons)