The United Nations Environment Programme’s Inquiry into the Design of a Sustainable Financial System will present its interim report in Davos this week. The report has been initiated to advance policy options to improve the financial system’s effectiveness in mobilising capital towards a green and inclusive economy, and the interim report profiles innovations in five areas including institutional investment.
Here it explores policy changes in three broad areas: capital allocation, investor governance and market incentives in order to align the assets of institutional investors with sustainable development.
The report’s authors are positive about progress, saying that 2015 is poised to be the year of sustainable development, with growing focus on innovative policies to mobilise the trillions of dollars needed for long-term inclusive wealth creation.
The report identifies a number of high potential areas which could contribute to this shift including three major asset pools – banking, bond markets and institutional investors – as well as two emerging policy tools – monetary policy and ‘environmental stress tests’.
The UNEP Inquiry into Design Options for a Sustainable Financial System, now entering the second half of its two-year work program, was created to explore emerging changes and reforms to the financial system that would improve its alignment with sustainable development. Its investigations to date have revealed many innovations in financial and monetary policy, regulation and financial market standards.
The Inquiry is now half way through its work program and will complete its research and engagement at the end of 2015.
To access the report, Pathways to Scale, click below