Business solutions for climate: Green finance

Worldwide, the share of green finance is on the rise with global green bond issuance being set to grow by 60% to USD 250 billion in 2018, according to the UNFCCC. At their level, companies are starting to develop tools to boost investments for climate adaptation and mitigation. But the transition remains slow compared to the urgent need to act at a global scale against climate change. Discover three projects that support green finance on #Ideas4Climate.

During COP24, 20 leading business newspapers feature innovative solutions to switch to a low-carbon economy. The international collaborative journalism operation Solutions and Co involves 20 international newspapers including The Financial Times, Les Echos, Kommersant, Hindu Business Line, Yicai Global, and El Economista. SolutionsAndCo is coordinated by Sparknews with the support of the Solar Impulse Foundation, the Climate Groupe, and UN Global Compact France.

In Brazil, businesses contribute to reforestation in order to restore 12 million hectares of trees by 2030

Brazil committed to reducing greenhouse gas emissions by 37% below 2005 levels by 2025 and to restoring 12 million hectares of forests. Over the past 40 years, about 20% of the Amazon has been cut down or destroyed, and scientists worry that another 20% of the rainforest will be lost in the next couple of decades. Private enterprises, NGOs and even foreign governments are funding or leading reforestation projects. The NGO Conservation International leads since last year the largest tropical reforestation project in History: 73 million trees sprout up across what’s known as the “arc of deforestation”. Some entities have opted to prevent deforestation altogether instead of replanting trees. Read more on The Hindu Business Line, Valor Econômico (in Portuguese), Les Echos and L’Economiste du Maroc (in French).

Amata uses satellite imagery to identify and select which trees can be cut down with the smallest possible impact, and informs buyers about the wood’s precise initial location. ©Photo courtesy of Amata

Europe inaugurates the Luxembourg Green Exchange, the first financial platform exclusively dedicated to green bonds

The COP 21 Paris Agreement was premised on the need to mobilize $100 billion annually between now and 2020 and a total $1 trillion by 2030 in order to keep global warming under 2°C. However, last year, the financing of extreme fossil fuels increased by 11% worldwide. In 2016, the Luxembourg Stock Exchange launched the Luxembourg Green Exchange (LGX). The LGX today also features a dedicated social and sustainable bond window. Alongside this initiative, there is a growing number of private companies and funds working to increase the Green finances impact on the race against global warming in the country. Read more on The Hindu Business Line, Il Sole(in Italian), El Economista (in Spanish), Les Echos and L’Economiste du Maroc (in French).

The Luxembourg Stock Exchange has the “Luxembourg Green Exchange”, where half of the green bonds of the planet are listed © Edit Press

An increasing number of companies are implementing an internal price on carbon to reduce their carbon footprint

In France, the internal price of carbon is becoming an essential tool for companies in the fight against climate change. This tool allows companies to better target actions to implement in order to accelerate their energy transition and aim for carbon neutrality. It also enables them to have a better risk management in the face of ever-changing regulations. However, as this is a voluntary action, prices are often considered too low to have a real impact. Thus, 75% of emissions are covered by prices not exceeding $ 10 per tonne of CO2, while the High-Level Commission on Carbon Prices, chaired by economists Stern and Stiglitz, recommended prices ranging from $ 40 to $ 80 per tonne by 2020 and from $ 50 to $ 100 by 2050. Read more on Yicai GlobalThe Hindu Business LineValor Econômico (in Portuguese) and Il Sole(in Italian).

Internal prices can vary drastically from one dollar to 800 dollars per tonne of CO2 according to CDP.

Op-ed by John Tidmarsh, Chief Investment Officer of Regions 20:Is blended finance the answer to scale-up green infrastructure?

In his op-ed, John Tidmarsh provides an insightful analysis aimed at understanding why so few green projects are being implemented despite the growing availability of clean technologies and the increasing political interest in this matter. Read more on Solutions&Co.

Op-ed by Antoine Sire, Director of Corporate Engagement of BNP Paribas : From neutral finance to positive impact finance

Antoine Sire, Director of Corporate Engagement of BNP Paribas, highlights the fundamental role private funds (development and private banks, pension funds, investors etc.) have to play in the achievement of an ecological transition in solidarity for all. Read more on Solutions&Co.

You — readers, citizens, leaders, investors, consumers — can help to spread and magnify the effects of these solutions, so that tomorrow’s economy becomes a truly sustainable one.


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