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Statement by the GIP Steering Committee in Support of the COP26

Statement by the GIP Steering Committee in Support of the COP26

November 2021

 

Scientists are observing changes in the Earth’s climate in every region and across the whole climate system, according to the IPCC’s Sixth Assessment Report (AR6), which finds that unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions, limiting warming to close to 1.5°C or even 2°C will be beyond reach. Aligning financial flows to low-carbon and climate-resilient assets and investments is an integral part of the global efforts to support the goals of the Paris Agreement and the SDGs. Developing economies are facing imminent challenges, including those along the Belt and Road, where climate risks are beginning to manifest and exacerbate and the needs for economic and social development are still pressing. There is a strong need for sustainable growth that supports economic and social development without bringing significant harm to climate and the environment. A recent report by Carbon Tracker pointed out that 88% of the growth in electricity demand between 2019 and 2040 expected to come from emerging market countries[1]. If they do not leapfrog to renewables, there will be no global energy transition.

Green finance has become mainstreamed in recent years, as a market-based solution to environmental challenges, particularly climate change. Governments have come together for collaboration on the development of green finance, on international platforms such as the G20 Sustainable Finance Working Group (SFWG), the Network for Greening the Finance System (NGFS) and the International Platform on Sustainable Finance (IPSF). The financial sector is also responding actively, with a rapid growth in the issuance of green bonds and the volume of green loans, and the burgeoning of sector-focused initiatives in banking, insurance, asset management, etc. 

The Green Investment Principles (GIP) for the Belt and Road was launched in 2018 as a set of principles to accelerate green investments along the Belt and Road by the Green Finance Committee of China Society for Finance and Banking and the City of London’s Green Finance Initiative (now UK-China Green Finance Centre). Its membership has expanded rapidly to cover 40 major financial institutions across Asia, Europe, Middle East and Africa, with their global asset volume totaling 49 trillion USD. The GIP and its members are committed to making more green and sustainable investments along the Belt and Road to support their climate ambition.

Since 2019, the GIP community has made steady progress in terms of green financing and in-house capacity. Their scale of green loans and bonds keeps on expanding at a yearly pace of 20-30%, while 14 members have been recognized for their excellence in the field and received more than 30 awards from renowned entities (Euromoney and Climate Bonds Initiative) or government authorities. The past three years have also seen solid improvements in the climate governance, risk management, and disclosure of GIP members. It has grown into a community of knowledging sharing and peer learning, with the successful hosting of over 10 capacity building events.

Despite the adverse impact of the COVID-19 pandemic, some Belt and Road countries and regions are stepping up in terms of climate ambitions, with a growing number of carbon neutrality pledges on the national and organizational levels. COP26 has set out four goals to achieve, which include securing global net-zero by mid-century and keep 1.5 degrees within reach, adapt to protect communities and natural habitats, mobilise finance and work together to deliver. The GIP community welcomes these goals, in particular on mobilise finance, an area that is closely related to the work of the GIP.

Recognizing the need for more ambitious actions to realize the carbon neutrality pledges and the essential role of the financial sector in this process, we, as members of the GIP Steering Committee, will endeavor to:

We also encourage our member institutions, including signatory and supporting institutions to join us and support the COP26 by issuing separate statements.


Contact:

CHEN Yunhan, GIP Secretariat Beijing Office: sec_gip@gipbr.net 


List of the GIP Steering Committee Members (in alphabetical order):

l  Belt and Road Bankers’ Roundtable

l  International Financial Corporation

l  Paulson Institute

l  People’s Bank of China

l  Principles for Responsible Investment

l  UK Treasury

l  World Economic Forum

 



[1] Reach for the Sun: The emerging market electricity leapfrog, Carbon Tracker, 14 July 2021


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