A group of nations responsible for nearly half of all global warming pollutants said on Monday it has launched a new finance initiative to oversee massive investment in climate technologies that can help fulfill the 2015 Paris Agreement.
The European Union and seven nations from four continents — Argentina, Canada, Chile, China, India, Kenya and Morocco — set up the International Platform on Sustainable Finance, or IPSF. Together they account for 44 percent of global carbon dioxide emissions and an equal share of the world’s GDP.
IPSF will likely be run by a steering committee, working groups and secretariat and will not impose binding legal obligations on any member, the E.U. and member nations said in a joint statement.
Rather than raise money, the finance platform will set global standards and rules for gathering trillions of dollars in private and public “green” investment to slow the climate crisis. The aim is to make the system easier for private investors to help the world fulfill the Paris climate treaty through drastic reductions in emissions of carbon dioxide and other heat-trapping greenhouse gases.
“While public funding will be vital for the transition, it cannot pay the massive bill alone. We also have to tap into private capital to shift the trillions needed,” Valdis Dombrovskis, vice president of the European Commission, said about the need for a new platform in a speech at Washington last week.
Dombrovskis said everyone will benefit if nations link their sustainable financing requirements to global financial markets so they can scale up green investment at a level the world needs.
“The platform is open for any like-minded country to join: I call on countries across the world to join us and help make a difference on the ground,” he said. “It will help private investors to identify and make the most of environmentally sustainable investments.”
👋 Say hello to the new International Platform on #SustainableFinance💚!
together representing almost half of global CO2 emissions.https://t.co/NTAwVEarwx #investgreen #SustainableFinanceEU #ActNow pic.twitter.com/WSwTW6uVJE
— EU Finance 🇪🇺 (@EU_Finance) October 21, 2019
A commission-led effort
The European Commission published new guidelines in June for corporate climate-related information reporting. The new guidelines were meant to help companies report what they are doing to fight climate change, and how the rise of global average temperatures has affected them.
Other nations such as China have different systems for reporting such information, so the new platform would create standards and rules among them. Since massive investments will be needed to transit to a low carbon economy, the commission said public funding will not be enough.
“Greater international cooperation is also needed to scale up environmentally sustainable finance globally and promote the integration of markets for green financial products at international scale,” the commission said in a statement.
The new platform is part of the commission’s efforts to support a global transition to a low-carbon, more resource-efficient and sustainable economy.
“To this end, the IPSF will act as a forum for facilitating exchanges,” it said, “and, where relevant, coordinating efforts on initiatives and approaches to environmentally sustainable finance, while respecting national and regional contexts.”