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Inclusive Green Finance report launched by Uni.lu ADA Chair at COP27

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Published on Wednesday, 16 November 2022

Inclusive Green Finance (IGF) policies recognise the role of financial inclusion in building resilience to climate change impact and enable small-scale mitigation among the world’s most vulnerable people. This is the key message from the Alliance for Financial Inclusion (AFI) side event at the 2022 United Nations Climate Change Conference (COP27). 

The event saw the launch of the milestone research report “The Roadmap to Inclusive Green Finance”, by AFI’s Inclusive Green Finance Working Group (IGFWG) and an academic team of authors coordinated by the University of Luxembourg’s ADA Chair in Financial Law (Inclusive Finance)Prof. Dirk Zetzsche. IGF policy is a coherent, holistic approach to integrating both financial inclusion and environmental factors in financial regulation, explained Prof. Dirk Zetzsche, who co-authored the IGF Roadmap with Professor Buckley (UNSW Sydney), Professor Arner (Hong Kong University), the AFI members and the AFI IGF team.

“While mutual learning from other countries remains important, we found that financial inclusion and climate change concerns differ from country to country. No one size fits all. Solutions must be country-specific and tailored to the necessities of each AFI member”, Professor Zetzsche said. 

Professor Buckley, connecting virtually to the panel discussion, emphasised the need for constant updates and reassessment: “If regulators want too much too soon, they will achieve nothing. A clear focus on national priorities is crucial for any successful IGF strategy. Each step will require refinement over time, in proportion to the capacity of regulators and regulated institutions.”

Highlighting the importance of capacity building, Professor Arner explained to the audience via an internet link: “Our research has shown that IGF requires active regulators. Regulators will need more of their existing resources and entirely new types of resources in technology, hard science and data generation.”

The ADA Chair in Financial Law (inclusive finance), hosted within the Faculty of Law, Economics and Finance at the University of Luxembourg benefits from research support provided by ADA (Appui au développement autonome), a Luxembourgish non-governmental organisation focused on increasing the autonomy of vulnerable people in Africa, Latin America and Asia with inclusive finance since 1994, as well as the Ministry of Foreign and European Affairs of the Grand-Duchy of Luxembourg. The ADA Chair is the sole academic Chair devoted to law and regulation of inclusive finance worldwide.

For the first time at COP, AFI member institutions, central banks and other financial regulators from around 80 developing markets, are sharing their Inclusive Green Finance policy solutions that contribute to solving one of humanity’s main challenges, climate change. Focusing on how to use financial inclusion to enable vulnerable people to adapt and mitigate to climate change, the panelists explored how central banks and financial regulators are contributing to climate action. 

AFI members, central banks, and other financial regulators, endorsed the Sharm El Sheikh Accord on Inclusive Green Finance five years ago during AFI’s annual flagship Global Policy Forum. Under the IGF remit, financial institutions are providing vital support to those navigating an uncertain environment by promoting green products within savings, credit, insurance, money transfers and new digital delivery channels. IGF plays a key role in enabling the implementation of the UN Sustainable Development Goals (SDGs), particularly SDG 1 (no poverty), SDG 7 (affordable and clean energy) and SDG 13 (climate action). 

This special report was a joint initiative between AFI, with support from the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection of Germany (BMUV) and a team of authors coordinated by the ADA Chair in Financial Law (Inclusive Finance) at the University of Luxembourg with support by ADA and the Ministry of Foreign and European Affairs of the Grand-Duchy of Luxembourg. The event was hosted at the BeNeLux-EIB Pavilion in Sharm El Sheikh, Egypt. 

Read “The Roadmap to Inclusive Green Finance” full report.

A full version of the press release can be found on the AFI website