A new United Nations Environment Programme (UNEP) report released earlier this month at the International Monetary Fund (IMF)/World Bank Annual Meetings shows how to harness the assets of the world’s financial system for sustainability.
There are three key findings. The first is that a “quiet revolution” is underway as financial policymakers and regulators take steps to integrate sustainable development considerations into financial systems to make them fit for the 21st century.
According to the second finding, momentum is building and is largely driven by developing and emerging nations including Bangladesh, Brazil, China, Kenya and Peru, with developed country champions including France and the UK.
The third finding states that amplifying these experiences through national and international action could channel private capital to finance the transition to an inclusive, green economy and support the realisation of the Sustainable Development Goals.
These core findings of a two-year Inquiry by the UNEP, are summarised in a new report, The Financial System We Need. Achim Steiner, UN under-secretary-general and executive director of UNEP explained that the inquiry has for the first time compiled and analysed inspiring initiatives from across the world that seek to better align the financial system with sustainable development, showing that there is much to be learnt from the developing world.
“We now need to raise the level of ambition and co-operation to ensure that the heartland of the global economy, the financial system, can evolve to serve its core purpose of growing and sustaining the real economy. UNEP’s report opens a new chapter by setting out how such an evolution can be achieved,” he added.
Yi Gang, deputy governor of the People’s Bank of China, said the UNEP Inquiry report “delivers a vision of embedding sustainable development into the core of financial and capital markets. It should be a very useful guide and reference for many governments, financial institutions and international organisations in thinking about how to advance green finance”.
Yi said China had benefited significantly from UNEP’s vision of sustainable finance as well as its analysis on international experience.
Dr Atiur Rahman, governor of the Bangladesh Bank, observed that for the first time, the Inquiry had mapped the many innovations around the world seeking to ensure that the financial systems served its purpose of financing inclusive, green development.
The UNEP Inquiry into the Design of a Sustainable Financial System was established in January 2014 with a mandate to advance policy options that would improve the effectiveness of the financial system in supporting sustainable development.  
The Inquiry’s report presents a Framework for Action that includes a toolbox of nearly 40 different measures, a set of five policy packages across banking, bond and equity markets, institutional investors and insurance, and a prioritised set of 10 next steps to promote international financial co-operation. The report has marked a good beginning, which needs to be followed up diligently.