In the EU's policy context green finance is understood as finance to support economic development while reducing pressures on climate and the environment and taking into account social and governance aspects. These actions range from renewable energy, circular economy, eco-tourism, water and sanitation, zero-emission transport, sustainable forestry management or the protection of biodiversity.
To reach the objectives of the Agenda 2030 and the Paris Agreement the transformation of the financial sector is key (e.g. EU taxonomy and standards). Whilst developed countries have committed to mobilizing jointly USD100 billion/year from different sources by 2025 under the Paris Agreement available financing is not going to the Nationally Determined Contributions (NDCs) and the SDGs. The scale of the challenge is beyond the capacity of the public sector alone. We need now to think of what can be done at all different levels to effectively mobilize these resources. The EU adds value by mobilizing significant additional funds to fill this investment gap for accelerating the transition towards inclusive, low-carbon and more resource-efficient market economies.
How can tax policies, public procurement, spending rules and financial regulations support green finance? What needs to change for capital flows to shift towards green economic activities all along the value chains? What could be the role of public funding? How can civil society and national oversight bodies call both public and private sectors to account on their claims for green or ethical financing?