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2016 was the Year of Green Finance - What Next?

2016 is on course to be not just the hottest on record, but also probably the dirtiest and most hazardous too. “The climate has broken records in 2016“ says World Meteorological Organization chief Petteri Taalas. Smog once again returned to haunt many of the world’s cities notably in China, Europe and India - with the primary cause the same as climate change: the burning of fossil fuels. Worldwide, around 18,000 people now die every day as a result of air pollution. Some 26 million people are also forced into poverty each year by the impact of natural disasters, with climate shocks reversing hard-won development gains.

Yet before you get too downhearted, we need to celebrate the fact that 2016 was also the best year ever for green finance. Simply put, green finance covers the financing of investments that generate environmental benefits as part of the broader strategy to achieve inclusive, resilient and sustainable development. In 2016, G20 heads of state for the first time recognized the need to ‘scale up green finance’ setting out a series of steps to make this happen.

Key countries issued strategies for greening their financial systems, with China in the vanguard launching a 35-point programme. Leading insurance regulators also decided to work together on how to respond to sustainability challenges, such as climate change. In all, UN Environment estimates that the number of policy measures to green the financial system has more than doubled to over 200 measures across 60 countries.

Paul Saad

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