Sliders Preview: Inclusive Green Finance: From Concept to Practice

In harnessing the synergies between green finance and financial inclusion, financial regulators, supervisors and government finance executives can help improve the livelihood of low-income households and MSME, while simultaneously contributing to climate change adaptation and mitigation.

Inclusive green finance plays an important role in supporting vulnerable groups in adapting to global environmental change and strengthening their resilience.

JUST TRANSITION TO A RESILIENT AND ENVIRONMENTALLY SUSTAINABLE ECONOMY

CLIMATE CHANGE AND ENVIRONMENTAL DEGRADATION

VULNERABLE GROUPS

FINANCIAL STABILITY

SOCIAL INEQUITY

ADAPTATION TO ENVIRONMENTAL CHANGE & ENHANCING RESILIENCE MARKET-SHAPING POLICIES

Implement regulatory enablers for mobile money, microinsurance and other resilience-supporting (digital) financial services

Enact Enterprise Security Risk Management (ESRM) guidelines that incorporate environmental and social risks

Awareness-raising and capacity building measures for financial institutions

Green finance taxonomies for MSMEs and smallholder farming

Consumer protection, awareness-raising and capacity-building measures for vulnerable end-users

ADAPTATION TO ENVIRONMENTAL CHANGE & ENHANCING RESILIENCE DIRECT INTERVENTIONS

(Digital) cash transfers to disaster affected

Subsidies or guarantees for credit to invest in adaptation / resilienceenhancing activities

Directed credit / sectoral credit targets

MITIGATION OF ENVIRONMENTAL CHANGE MARKET-SHAPING POLICIES

Regulatory enablers for Pay-as-you-go solar and water.

Prudential rules that incentivize credit to green MSMEs or sustainable agriculture

Enact Enterprise Security Risk Management (ESRM) guidelines that incorporate environmental and social risks

Awareness-raising and capacity-building measures for financial institutions

Guidance and incentives for inclusive green FinTech innovation

MITIGATION OF ENVIRONMENTAL CHANGE DIRECT INTERVENTIONS

Subsidies or guarantees for credit to invest in new resource-efficient / low-carbon practices / technologies

Directed credit / sectoral credit targets

This framework is congruent with the four areas of IGF known as the 4Ps of Inclusive Green Finance, and the Sharm El Sheikh Accord on Financial Inclusion, Climate Change, and Green Finance. This framework also supports Sustainable Development Goals.

AFI’S 4P FRAMEWORK OF INCLUSIVE GREEN FINANCE

Read the full report: INCLUSIVE GREEN FINANCE: FROM CONCEPT TO PRACTICE

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