COP 21 Climate Action only 1 point of emphasis for Responsible Finance
The Paris talks leading to the COP 21 agreements have been hailed as a transformational moment in collective action of developed and developing countries towards lowering the raise in global average temperatures to no more than 2⁰ C (with intent to see a lower 1.5⁰ C rise). Finance will be a key factor in determining the success not only of limiting emissions but also to support mitigation and adaptation from the effects of climate change and governmental level efforts are not enough on their own.
In 2009 at COP 15 in Copenhagen, developed countries and multilateral development banks, committed to $100 billion in financing per year to help developing countries’ efforts through 2020 and have agreed to continue this level through 2025. An estimate from the World Resources Institute on how to reach the $100 billion per year level by 2020 estimated that support from developed countries and MDBs would account for about half this amount with the remaining 40-50% coming from private sources.<!--[if !supportFootnotes]-->[1]
Yet, this remains significantly below estimates of what would be needed for climate change action alone. An estimated incremental $177 billion per year in investment in emerging markets through 2030 just for climate action according to the United Nations Framework Conventional on Climate Change (UNFCCC). This is on the low end of the range of estimates compiled by the UN Task Team on Sustainable Development Financing, which includes estimates from the International Energy Agency ($377 billion per year) and McKinsey ($695 billion per year).<!--[if !supportFootnotes]-->[2]
These are important areas for financial institutions to be involved with but are not the only area that responsible finance should focus on. In addition to climate change related activities, huge investment opportunities remain across the spectrum in order to support a a more equitable, inclusive and sustainable economic environment.
This broader focus, across many areas including health, infrastructure, agricultural development, access to energy and can support action on climate change, is complementary to and supportive of the COP 21 goals. All of these areas will be in focus as senior representatives of responsible finance—both traditional sectors and Islamic finance—come together at the Responsible Finance Summit in Kuala Lumpur, Malaysia from 30-31 March 2016, hosted by Bank Negara Malaysia and organized by the RFI Foundation.
The Responsible Finance Summit will build around a theme of “Unlocking Finance, Expanding Impact” to look at:
Incorporating Islamic finance to reflect its key presence within many emerging markets;
Leverage integrated reporting and Islamic finance to attract new, long-term foreign capital;
Support rising middle class incomes and falling poverty levels;
Measurement of impacts to meet the values of both investors and other stakeholders; and,
Broadening financial inclusion efforts for its own sake and to support a growing consumer base.
Innovating with new investment solutions that deliver social impact as well as financial returns
For more information about partnership opportunities or to register your interest to attend the Responsible Finance Summit, please visit the event website, www.rf-summit.com or our website, www.rfi-foundation.org.
