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ROADMAP FOR INCLUSIVE GREEN FINANCE IMPLEMENTATION
The six Building Blocks of a successful IGF Framework identified in this report include: > The adoption of an IGF strategy at the highest level of financial regulation and central banking aligned with NDCs as well as national climate and environmental policies. A solid strategy rests on a governance structure and coordinating entity in charge of implementing and ensuring the success of the IGF strategy, which involves embedding IGF values in every area of public and private institutions (governance, operations, products, financial and risk management, recruitment, training and development). > Classification of IGF compliant conduct, products, and services, either by way of a catalogue or a taxonomy, to delineate wanted from unwanted economic behavior. > Establishing IGF as a priority within financial institutions and regulators, for instance, through Sustainable Banking Principles and ESG-related Sustainable Frameworks. > Data and models are at the heart of the IGF mission, but are lacking in scale. The identification of measurement techniques, combining financial and sustainability data in models with reporting and disclosure to regulators, and the market at large, may facilitate data collection and analysis, and the development of data-driven models for lending and investment as well as algorithms for IGF-related operations. > Establishing, or enhancing, the IGF ecosystem capable of delivering the elements of a marketdriven successful sustainable finance approach, including specialized data intermediaries, technology providers, professionals in the financial sector, and educational resources. > Building financial infrastructure and resources, including technical systems through which monetary transactions are made and financial services can be provided.
STRATEGY Each country has its own unique financial, environmental, and climate challenges. However, having a clear and focused strategy is critically relevant to success in the implementation of IGF policies and initiatives. An effective strategy is the best tool to align priorities and serve as an actionable plan to reach national goals. NATIONAL COORDINATION The first and foremost step of implementation is an IGF strategy at the highest levels involved in financial regulation including central banks or financial regulation bodies; this requires a governance structure and coordinating entity in charge of implementing and ensuring the strategy’s success,39 which can be a standalone or sub-strategy of a comprehensive financial sector or a financial inclusion strategy. An IGF strategy should be built on broad stakeholder consensus. How this consensus is achieved may vary from country to country. While countries responding to immediate crises often have strong ministerial or regulatory mandates resulting in top-down approaches (e.g. Thailand, the Philippines, Bangladesh, Fiji), in other countries, an IGF strategy is the result of bottom-up initiatives with private financial institutions assuming the role of a driving force to which regulators respond, e.g. Ghana, Paraguay, Honduras, Cambodia). These bottom-up approaches are often driven by funding conditions of international organizations and multilateral development banks, such as the IFC, the EIB and the Green Climate Fund. Equally important is that an IGF strategy be aligned with the financial sector’s contributions to the government’s priorities on SDGs and environmental commitments in line with the UN Framework Convention on Climate Change (UNFCCC), the Paris Agreement and NDCs, UN Convention on Biological Diversity, and the UN Convention to Combat Desertification.
39 Please refer to: https://www.afi-dataportal.org/user/login