According to data from the Organization for Economic Co-operation and Development (OECD) published in late July, climate finance reached $ 83.3 billion in 2020, below the northern countries’ promise to mobilize 100 billion. dollars a year, starting in 2020, for those in the south.
As COP27 approaches, organized this year on the African continent in Sharm El Sheikh, climate negotiations will focus on the issue of funding and commitments, which are the engines of climate action.. Faced with the need for coherence in the action of finance in the area of climate and environment, the Global Climate Funding Assessment 2022 offers a global panorama as well as an essential analysis of all financial flows allowing the implementation of actions with a positive impact in terms of mitigation (reduction of GHG emissions) or adaptation to climate change. Produced in collaboration with Finance for tomorrowParis branch EUROPLACE, like its three previous editions, draws up this new Report detailed inventory and monitoring of climate action by banks, insurers and investors. It also presents market dynamics with the evolution and offer of green financial products..
Climatic possibility publishes this 4th edition of the World Report on Climate Finance on 25 October, on the occasion of the Paris for tomorrow week organized by Finance for Tomorrow around the Climate Finance Day, from 24 to 28 October. An international event that brings together the financial community, local and public authorities and civil society to highlight the problems and solutions related to financing and achieving the climate goals and Sustainable Development Goals (SDGs).
THE 6 MAIN LESSONS DESCRIBED IN THE GLOBAL FINANCE REPORT FOR CLIMATE 2022:
- Despite a wave of support for the carbon neutrality goal, banks, insurers, managers and asset owners are still struggling to make concrete commitments on phasing out fossil fuels. However, fossil funding declined for the second consecutive year (Financial report on fossil fuels2022).
- $ 632 billion in climate finance flows were mobilized in 2019-20, 10% more than in the previous two years. Despite a 53% increase compared to 2017-2018, the financial flows for the adjustment measured in 2019-2020 remain far from the parity foreseen by the Paris agreement. Mitigation therefore still represents 90% of this funding (Climate policy initiative2021).
- From the green bond market (522.7 billion dollars, + 75% in one year, Climate Links Initiative2022) to voluntary carbon credit markets ($ 2 billion, x4 in a year, Ecosystems market2022), financial instruments serving the transition are expanding rapidly.
- With the adoption of the European SDFR regulation focusing on the impact of financial products on the environment and green taxonomy, Europe is a world leader in terms of transparency on climate finance. The multiplication of taxonomies, recent (ASEAN) or previous (China), and the regulations on climate transparency of financial actors (United States), strengthen the regulation of green investments, but also require harmonization between actors.
- In France, the Netherlands, the United Kingdom and at the European Central Bank level, the first climate stress tests carried out by the supervisory authorities reveal the particular exposure of European financial actors to transition risks. However, due to their experimental nature, none of these early stress tests should lead to climate-related capital requirements.
- Booming, the ESG market is looking for the standardization of transparency standards. In 2021, a record was invested in specialized ESG funds: but the market remains characterized by weaknesses in the transparency of ESG data in terms of transparency, reliability and standardization.
The Global Report on Climate Finance is available, in French and English, on the website www.climate-chance.org ICI
The Global Report on Climate Finance is part of a series of publications fromNon-State Observatory on Climate Action created in 2018 and to date by bringing together 4 annual Global Reports: finance, sector, territories, adaptation as well as numerous case studies. Climate Chance thus continues its mission to show the evolution of mobilizations, to give credibility to the strategies of the actors in relation to international climate objectives, and therefore to observe the reality of the actions announced.
