RBI has joined the Network for Greening the Financial System (NGFS) recently. The Reserve Bank expects to benefit from the membership of NGFS by learning from and contributing to global efforts on Green Finance which has assumed significance in the context of climate change.
About NGFS
In December 2017, eight central banks and supervisors established the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) at the Paris “One Planet Summit”. The membership of the Network has expanded since then.
NGFS is a group of central banks and supervisors willing to share best practices and contribute to the development of environment and climate risk management in the financial sector, while mobilising mainstream finance to support the transition towards a sustainable economy.
Purpose of NGFS
To help strengthening the global response required to meet the goals of the Paris agreement.
- To enhance the role of the financial system to manage risks - Green Insurance, etc.
- To mobilize capital for green and low-carbon investments in the broader context of environmentally sustainable development-Green Bonds.
To this effect, the Network defines and promotes best practices to be implemented across green initiatives and conducts analytical work on green finance.
About Green Finance
It encompasses all the initiatives taken by private and public agents (governments, NGOs and international organizations, etc.) in developing, promoting, implementing and supporting projects with sustainable impacts through financial instruments.
UN Environment has been working with countries, financial regulators and finance sector to align financial systems to the 2030 sustainable development agenda – to direct financial flows to support the delivery of the Sustainable Development Goals. The main areas for the current work on green financing are:
- Supporting public sector on creating enabling environment
- Promoting public-private partnerships on financing mechanisms such as green bonds
- Capacity building of community enterprises on micro-credit
Green financing could be promoted through changes in countries’ regulatory frameworks, harmonizing public financial incentives, increases in green financing from different sectors, alignment of public sector financing decision-making with the environmental dimension of the Sustainable Development Goals, increases in investment in clean and green technologies, financing for sustainable natural resource-based green economies and climate smart blue economy, increase use of green bonds, and so on.
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