The International Monetary Fund has disclosed that investment funds can drive the transitioning of economies into net-zero greenhouse gas emissions.
The transition to a no-greenhouse gas emissions world requires unprecedented change by companies and governments and the additional investment of as much as $20 trillion over the next two decades.
According to IMF, a solid fiscal policy complemented by a broad range of regulatory and financial policies will be necessary to facilitate the green transition.
“The world’s $50 trillion investment fund industry, especially funds with a sustainability focus, can play an essential role in financing the transition to a greener economy and helping to avoid some of the most perilous effects of climate change, according to our recent analysis as part of the IMF’s Global Financial Stability Report.
“Sustainable funds differ from conventional funds because they have a sustainability objective while also seeking financial returns.” Some funds are more narrowly focused on the environment within this broad class of funds, and a further subcategory is explicitly concerned with climate change mitigation.”
IMF report
Boosting sustainable climate funds
Various banks are executing good borrowing terms to urge clients and customers to embrace socially and earth-centered items. Other new credits are intended to energize the acquisition of electric or crossbreed vehicles and sunlight-powered chargers. The shift to sustainable and greener plans of action accompanies a price.
According to the report, boosting sustainable climate funds will require a lot of factors, including gathering data on the impacts of greenhouse gas on the climate, among others.
“We need to strengthen the global climate information architecture, which includes data, disclosures, and sustainable finance classifications, both for firms and investment funds. For example, better classification systems for funds, where fund labels and taxonomies are uniformly used and understood, help to summarize a fund’s investment strategy and its overall approach to engagement and stewardship. Our analysis shows that labels have become an increasingly important driver of fund flows, especially in the retail segment of the market. Most companies are willing to invest in organizations with a strong policy to protect the climate.”
IMF report
Sustainable finance plays a significant part in empowering progress to be net-zero, and it’s incredible to see European organizations driving their worldwide companions and effectively accepting these imaginative financing instruments as they tap into global capital business sectors.
To this end, the IMF, together with the World Bank and the OECD, have pledged to develop principles to harmonize existing approaches and support the development of sustainable financial markets.
EU’s call for proposal to accelerate the ‘green transition’ in Africa
The African continent has an enormous renewable energy potential that remains to be fully unleashed. The adoption of innovative, affordable, and efficient renewable energy solutions will support Africa in achieving sustainable development growth and economic transformation.
To this effect, the European Commission published a call for research project proposals “Accelerating the green transition and energy access Partnership with Africa”. This call has been launched within the framework of the European Green Deal’s ambitions to support research and innovation in light of building a low carbon and climate resilient future.
In particular, the call wishes to support innovation in order to enable African countries to pursue sustainable pathways to development through a low-carbon, climate-resilient, and green growth trajectory and leapfrogging fossil fuel technologies.
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