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Hugh Wheelan: The politics is still like treacle, but the regulatory and economic blender of green finance is whirring

Hugh Wheelan: The politics is still like treacle, but the regulatory and economic blender of green finance is whirring

Report from the 6th OECD Forum on Green Finance & Investment.

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I was the Master of Ceremonies for the 6th OECD Forum on Green Finance & Investment last week in Paris. It’s a good event that attracts policy makers, national and multilateral development banks and investors. The conference was opened by vigorous keynote calls to action by Ángel Gurría, OECD Secretary General and Brune Poirson, France’s Secretary of State to the Minister for the Ecological and Inclusive Transition. Poirson said the Paris Agreement must be made “irreversible” and warned against ‘collapsologues’ vaunting inaction and lack of hope towards environmental breakdown “as if this was an option”. She said that we need to change the transition dialogue to an “advantage and growth story”.
But after years of hearing similar analysis of the problem, and the ‘billions to trillions’ wishlist…..how?
Well, surprising as it may seem for one of the world’s unsexiest words, the EU’s green ‘taxonomy’ (one of the key pillars of the EU’s Action Plan on Sustainable Finance) is starting to focus minds and put a much-needed policy floor under the necessary regulatory alignment and information requirements that could hasten the economic change needed. During the conference, the OECD was hosting a so-called Sherpa meeting on how to progress the International Platform on Sustainable Finance (IPSF), the EU’s attempt to export the green taxonomy to other regions and harmonize rules on what is sustainable, or “green” investment; although we are seeing resistance – more of which later.
Poirson said France – a leader in ESG and climate reporting under its comply-or-explain Article 173 regulation – would adopt a taxonomy based on the EU’s

work by the year end in a bid for policy coherence across ministries. And finance ministers are stepping up. Leena Mörttinen, Director General (Financial Markets Department) at the Finnish Ministry of Finance noted that the Coalition of Finance Ministers for Climate Change was gaining momentum and could have a key role in pushing the private sector. It kicked off officially in April with 40 signatories, but already has 50+ members and aims to respond to climate change with concrete actions in tax and fiscal green budgetary planning. On the green ‘taxonomy’, Mario Nava, Director, Horizontal Policies at DG FISMA (the EU Directorate for Financial Stability, Financial Services and Capital Markets), said the EU’s Action Plan on Sustainable Finance is in the final stage of political negotiations – the ‘trilogues’ between the European Commission, Parliament and the European Council (Member States) – where key wrangling points include whether nuclear power should be included, and if it should come into force next year – as originally proposed by the European Commission – or in 2022 as some EU Member States are now trying to push it back to. The Technical Expert Group (TEG) that has evolved the Action Plan is now wading through some 800 responses to the final consultation, according to Nathan Fabian, TEG member and Director at the Principles for Responsible Investment. Fabian said 25 asset owners were already trialling use of the taxonomy. Nava said the volition in the EU for the Action Plan was down to popular and political support backed up by the EU Green New Deal of new EC President, Ursula von der Leyen, which is expected to include a number of pillars, including sustainable finance. But, Nava noted that Europe was only 8.98% of world CO2 emissions, and even with the 28 EU countries, plus 7 other large, supporting nations it only reached 44%.
As RI wrote recently, and looked at through a series

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