G20 adopts ‘green finance’ as major policy theme ahead of Leaders Summit in September

The G20 has for the first time included ‘green finance’ as one of its major policy themes ahead of the G20 Leaders Summit on 4-5 September in Hangzhou, China.
Importantly, it has included green finance in the finance ministers ‘track’, meaning that it will be discussed among high-level treasury civil servants, central bankers and government ministers and have a greater chance of leading to subsequent policy in G20 member states. China holds the G20 presidency this year. The G20 Finance Ministers and Central Bank Governors group met in Chengdu, China on July 23-24. In the meeting communiqué, they said: “We recognize that, in order to support environmentally sustainable growth globally, it is necessary to scale-up green financing. We welcome the G20 Green Finance Synthesis Report submitted by the Green Finance Study Group (GFSG), and welcome the voluntary options developed by the GFSG to enhance the ability of the financial system to mobilize private capital for green investment.” The United Nations Environment Programme is acting as the secretariat for the GFSG.
The instruments and methods to achieve sustainable, balanced and inclusive growth are focused on monetary, fiscal and structural policy tools such as growth-friendly tax policy and public expenditure for high-quality investment.To this end, the G20 reaffirmed its commitment to infrastructure, acknowledging the “unique role” multilateral development banks play in this regard. The G20 further said it would launch the Global Infrastructure Connectivity Alliance to enhance synergy and cooperation among exisitng infrastructure connectivity programs.
The G20 said it aims to help bring the Paris Agreement on Climate Change into force as soon as possible, urging the timely implementation of related commitments made by developed countries and international organisations and announcements by other countries on climate finance. Notably, it reaffirmed its commitment to “rationalize and phase out inefficient fossil fuel subsidies that encourage wasteful consumption.”
Commenting on the report, Ma Jun, Chief Economist of the People’s Bank of China, said: “Promoting the consensus of developing green finance internationally is a key objective of the G20 GFSG. The statements in the G20 Finance Ministers and Central Bank Governors Meeting Communiqué demonstrate that major countries’ financial leaders have realized the necessity and feasibility of developing green finance through various financial instruments, policies, and mechanisms.”