Green Finance Regional Network

GFEC has established a regional network of green finance to support linkages with governments, financial institutions and the general public around the world. We support countries and regions in developing economic policies and practices around green finance to boost economic growth, generate income and jobs, reduce poverty and inequality, and strengthen the ecological foundation of their economies.

Africa and Middle East Asia-Pacific Europe Latin America and the Caribbean North America

As the global economy is shifting from a traditional growth model to a green and sustainable development model, Africa, the poorest continent in the world, is not far behind. Many governments have consciously integrated green elements into economic development, and some companies have also begun to actively promote green environmental protection.

Focusing on the development of clean energy is an important manifestation of African countries’ efforts to develop a green economy. Renewable energy such as bioenergy, wind energy, solar energy and geothermal energy is gradually gaining favor. Africa’s economic leader, South Africa, has been a pioneer in this regard.

As early as 2006, the Ministry of Mining and Energy Affairs of South Africa launched the Clean Development Mechanism to encourage residents to use solar energy, encourage enterprises to develop biodiesel, and actively cooperate with foreign countries in waste-to-energy generation, turning waste into treasure and reducing the impact of industrial development on the natural environment. The South African government announced the development of biofuels as the main direction of developing renewable energy, and actively built bioethanol plants.

In recent years, Asian countries have faced a series of social problems such as climate change, resource shortages, and environmental pollution. The development of green finance has become an inevitable choice for Asian countries’ economic transformation and upgrading. Green finance is an innovative financial system that supports the construction of ecological civilization.

In recent years, some Asian countries or regions have established or launched green finance frameworks and formed a green finance policy system. The number of participants in the sustainable investment market has grown rapidly, and green financial products such as green bonds and green funds have also achieved impressive results.

According to a report released by the Climate Bonds Initiative (CBI), the issuance of green bonds in the Asia-Pacific region reached US$62.5 billion in 2019, a year-on-year increase of 29%, making it the second largest issuing region after Europe.

A green transition is required in virtually all sectors of the economy, including but not limited to energy production and consumption, transportation, manufacturing and agriculture. The European Green Deal stipulates that the EU will be climate neutral by 2050. The expected transformation of the EU will require huge investments from the public and private sectors. The EU estimates that the energy system alone will require around 350 billion euros of additional investment per year by 2030 to achieve the 55% reduction target.

The European Green Deal outlines the overall framework of a European green development strategy and proposes an initial roadmap for key policies and measures to implement the agreement. Generally speaking, it mainly includes three major areas: one is to promote the transition of the EU economy to sustainable development; second, the EU’s role as a global leader in promoting global green development, and third, the introduction of a European Climate Pact to promote public participation and commitment to green transition development. Among them, the first part is the core content of this agreement, covering the promotion of EU climate goals, the transformation and development of energy, industry, construction, transportation, agriculture and other fields, the protection of the ecological environment and biodiversity, and the integration of sustainability into investment EU policies on financing, national budgets, research and innovation, and how to ensure a fair and just transition.

For many years, the oil and gas industry has been the mainstay of Colombia’s economy. According to the statistics of the International Energy Agency (IEA), 40% of Colombia’s primary energy consumption is oil, followed by natural gas, coal and other fossil energy. At the same time, only about 1% of Colombia’s electricity supply currently comes from renewable energy generation. In recent years, the production of fossil energy such as oil and coal in Colombia has been declining, which makes the country have to consider green transformation to solve the problem of insufficient energy supply.

On September 29, 2021, Colombia issued its first green sovereign bond in local currency, with a total amount of 750 billion Mexican pesos (approximately $200 million). With green bonds, the Latin American country hopes to raise about 2 billion Colombian pesos to finance environmental investment projects. Proceeds from this offering, designed to promote compliance with environmental goals and international commitments set by national governments, fund projects in the following areas: 40% related to water management; 27% of transportation systems are moving towards cleaner, more sustainable systems transition; 16% for biodiversity conservation; and 14% for unconventional renewable energy migrating to national territory.

Since the 21st century, global green finance has entered a systematic and institutionalized development track. Financial institutions have continuously strengthened their awareness of environmental risks, implemented international rules for green finance, and gradually improved green financial systems in various countries. Green credit, green bonds, Green financial innovation products such as green insurance, green funds, green index products, and green asset-backed securities have developed rapidly, and the greening of the financial system has become a global trend.

As a developed economy, the United States started early in the field of green finance. The United States has written green environmental protection responsibilities into relevant environmental laws and formulated corresponding green finance regulations to ensure that green finance has laws to abide by, and use the coercive force of the legal system to promote the development of green finance.

Since the 1970s, the U.S. Congress has passed more than 20 laws related to environmental protection, including water environment, air pollution, waste management, and contaminated site cleanup, each of which sets strict requirements for measures to be taken by polluters or public agencies.