The Climate Finance Track at the AVPN 2020 Virtual Conference

The SEI-supported sessions highlighted critical areas of sustainable finance, including regulatory and policy landscape to enable environment for climate finance, with focus on accessible language to make blended finance products more appealing.

The discussions underscored the drivers of sustainable finance: (1) Global investor demand for sustainable products across all asset classes has increased; (2) Concern for risks of an ESG nature – Davos’ launch of Global Risk Report suggests many of the top 10 identified risks among respondents are ESG related; (3) Mindset about the return opportunity ESG-integration brings rather than just being about compliance/risk mitigation and (4) Regulatory developments: such as  climate neutrality policies , standardization of taxonomy, financial industry principles and standards for green / sustainability bonds  stewardship codes, rise of ESG / climate related disclosures.

Blended finance was discussed as an alternative investment for early-stage pilot projects on climate action.

“Public resources and dedicated funds need to be used efficiently to attract institutional investors. It’s important we share experiences and ensure that broader stakeholder support is guaranteed in order for these funds to reach those vulnerable communities,” explains Niall O’Connor, Director (Asia), Stockholm Environment Institute.

The sessions also showcased public-private engagements that have led to the acceleration of climate solutions, and how sustainable financing can positively impact a wide range of vulnerable beneficiaries.

Greater accessibility to the marginal and vulnerable communities would require massive understanding of the mainstream finance assistance, supported through research and capacity development, ensuring clarity on financial products developed, translating and simplifying complex processes at the community level.

To uncover the hidden pockets of climate finance, it is crucial to identify projects that already contribute to climate impact within existing portfolios that highlight the importance of providing green finance. It is also important to create structures that make sense to investors, finance institutions and government funds in order to streamline the process of supporting climate impact through green finance.

The event emphasized the need for innovative financial instruments that adhere to environmental and social governance standards to facilitate the transition towards a low-carbon economy and enable effective adaptation.

Harnessing important climate finance flows can not only accelerate the adoption of mitigation and adaptation measures, but can also contribute to sustainable development, poverty reduction and empowering vulnerable groups.