TRADE & FINANCE
BUILDING A
FINANCIAL
SYSTEM THAT
INVESTS IN
SUSTAINABLE
DEVELOPMENT
SCOTT VAUGHAN
President and CEO,
International Institute for
Sustainable Development
Sustainable development is an
investment challenge. A coal fi red
power plant or renewable energy?
Light rail transit or a six-lane highway?
These are investment decisions,
made daily around the world, that
set humanity on a trajectory that
is either sustainable, or not.
The 2030 Agenda for Sustainable
Development sets out to transform
our world. The trillions of dollars spent
daily to power our economies are the
means to move us to a new generation
of clean, low-carbon and innovative
solutions. Today, green fi nancial products
are a small, boutique segment of major
markets. We need to scale up action, so
that high-carbon investments become
the market exception, precisely because
of their poor return on investments.
From Wall Street to Avenida Paulista—
Getting Finance Aligned with the SDGs
The good news is that we now have
a clear, unambiguous and universal
understanding of what needs to be
done to move to a climate smart and
sustainable development world: all
countries adopted the Sustainable
Development Goals and the Paris
climate change agreement in 2015.
16
Among the most exciting source of
innovation comes from the fi nancial
system, clustered under the umbrella of
‘green fi nance’. Certainly public fi nance
has a critical role you play, both in setting
broad objectives and leveraging and
de-risking deals. However, the world
needs the innovation of private markets
and investors to put us on a low-carbon
pathway. One of the breakthrough
signals from both the 2015 Paris climate
change agreement and the Sustainable
Development Goals is the need for
blended fi nance, whereby private and
public fi nance move in tandem towards
scaling up sustainable development.
Progress to bridge fi nancial markets with
the climate and sustainability agendas is
accelerating quickly. The United Nations
Environment Programme (UNEP) has
championed green fi nance for more than