Clément Bultheel

Green Finance Officer. Commissariat General for Sustainable Development, French Ministry for Ecological and Solidary Transition

Chrysa Alexandraki

Justine Claude

PhD Researcher in Public International Law
Master in Management candidate at Bocconi University

Charlotte Gardes

Liudmilia Strakodonskaya

Policy Expert, Sustainable Finance & International Financial Regulatory Policy, PhD candidate in Law & Economics
SRI Analyst, Doctoral student in Economics, Socially & Sustainable Responsible Investment - ‎EthiFinance

Aurore Vernhes

Doctoral student in international environmental law - Université Paris Ouest Nanterre

Climate Finance Essentials:

Understanding the role of finance in the transition to a low-carbon climate-resilient economy

This project aims to help future economic and political stakeholders understand some of the key issues regarding climate finance. It will focus on climate change’s financial impact, carbon risks, international financial institutions, capital markets’ climate-related investments, international financial governance institutions, fiscal and monetary climate policies, or monitoring systems for assessing climate-compatible investments

  Why this project?

 

  Sufficient and sustainable flows of climate finance are crucial for enhancing climate action. By developing, implementing and maintaining strategic mitigation and adaptation activities, climate-friendly investments can keep us on a trajectory compatible with the objective of limiting global warming well below 2°C above pre-industrials levels. These flows of finance yield important co-benefits for the environment and human well-being.

  Within the UNFCCC, Parties have committed so far to provide USD 100 billion per year by 2020 to help developing countries implement adaptation and mitigation practices, and more widely implement low-carbon climate-resilient (LCCR) development strategies. However, besides these international political signals, the main part of the transition will come from domestic financial flows: the so-called shift “from billions to trillions”; a transition in which all financial actors, from public to private, from local authorities to businesses and private sector have to take part.

  With the long-term signals for a low-carbon world that have been sent by the international community with the Paris Agreement, more and more financial stakeholders are now ready to take the path of the transition to a low-carbon climate-resilient economy. However, the urgency of addressing these issues shows us the need to strengthen our understanding of tools, concepts and actors serving the climate cause through finance.

 

  The project’s goal

 

  Mainstreaming climate finance is now one of the core aspects to further enhance climate action towards a LCCR economy. This project aims to produce 2 pages thematic briefing sheets on climate finance related issues to help future economic and political stakeholders understanding some of the key concepts/issues. It will particularly target students (especially in business, economics and finance, as well as CliMates’ student network), policy-makers and economic stakeholders, as well as medias.

 

  The project will cover issues such as climate change financial impacts, carbon risks, international financial institutions, capital markets climate-related investments, international financial governance institutions, fiscal and monetary climate policies, carbon pricing policies, or monitoring systems for assessing climate-compatible investments.

  Targeted audience:

  • International students (especially in economics, finance and business)

  • Policy-makers and economic stakeholders

Contact: finance@climates.fr

  Topics

  Introduction publication:

  • The needs for a LCCR transition, policies alignment, and climate finance

1/ Climate change and the financial ecosystem: why the shift is necessary

  • Climate change physical impacts: threats to the global financial stability

  • Carbon risks: how the legal and stranded assets risks of climate change can play on the LCCR transition

2/ Climate finance state & trends: strengthening the international financial architecture to mainstream climate finance

1.A glimpse on the international climate governance

  • Definition and rationale of climate finance under principle of differentiation of the UNFCCC

  • The current international climate finance architecture

  • Adapting investment practice to finance the Sustainable Development Agenda: from ESG practices to impact investing

2. Focus on key financial actors/sectors that can help financing the LCCR transition

  • The role of public financial institutions (PFI) in the LCCR transition

  • The role of capital markets in the LCCR transition

  • The role of international financial governance and regulation institutions (i.e. monetary authorities, financial regulators, and other international organizations) in the LCCR transition

3/ Mainstreaming climate change into international financial governance: economic & policy instruments

1.Carbon pricing policies

  • Financing the transition through carbon border adjustments

2. Climate-friendly monetary policies

  • Smart Unconventional Monetary Policies addressing the climate challenge

3. Climate-friendly financial regulatory policies

  • Macro-prudential policies and weighting rules to foster long-term investments

4. Climate-related financial standards

  • Financial standards supporting adaptation to climate change

5. Integration of climate-related risk(s) & Assessment of climate-compatible investment portfolios

  • Improving climate-related financial disclosure

  • Incorporating climate-related risk(s) into investment strategies

  • Monitoring systems to assess & align climate-compatible investment portfolios

Contact: finance@climates.fr

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