SBN Task Force Report – Necessary Ambition: How Low-Income Countries Are Adopting Sustainable Finance to Address Poverty, Climate Change, and Other Urgent Issues
June 22, 2020 - We are delighted to release the report: Necessary Ambition: How Low-Income Countries Are Adopting Sustainable Finance to Address Poverty, Climate Change, and Other Urgent Challenges, along with its 16 case studies, 8 country reports, and a set of tools to support decisions in developing and implementing sustainable finance roadmaps. This is the first comprehensive review of drivers and innovation behind market-level efforts to promote sustainable finance in low-income countries.
The study finds that sustainable finance has emerged as a pathway for low-income countries to de-risk investments and enable the financial flows needed to support climate action and sustainable development. SBN countries recognize that transitioning to sustainable financial systems is critical to their futures.Read the Executive Summary and Press Release.
The Sustainable Banking Network (SBN) is a unique, voluntary community of financial sector regulatory agencies and banking associations from emerging markets committed to advancing sustainable finance in line with international good practice. The 43-member countries represent US$43 trillion (86 percent) of the total banking assets in emerging markets.
The idea for the SBN arose during the first International Green Credit Forum, hosted by IFC and the China Banking Regulatory Commission, in Beijing in May 2012, where banking regulators and associations from 10 countries requested that IFC facilitate a global knowledge network on sustainable banking. The Network was formally launched in September 2012.
SBN members are committed to moving their financial sectors towards sustainability, with the twin goals of improved ESG risk management (including disclosure of climate risks) and increased capital flows to activities with positive climate impact. It is a platform for knowledge sharing and capacity building that facilitates the mobilization of practical support for members to design and implement national initiatives.
SBN Peer Learning: Indonesia and China Knowledge Exchange on Green Taxonomy Development [ Link]
SBN Peer Learning: Morocco and Ukraine on Promoting Sustainable Finance in the Capital Markets [Link]
The Central Bank of Ecuador joins the SBN [Link]
Indonesia and South Africa Knowledge Exchange on Green Taxonomy Development [Link]
The Maldives Monetary Authority joins the SBN [Link]
SBN Background [PDF]
SBN Membership Map [PDF]
SBN Green Bond Toolkit [PDF]
SBN Measurement Infographic [PDF]
SBN Webinar Series [Link]
Financial Institutions: Resources, Solutions, and Tools (FIRST) [Link]
World Bank Toolkits for Policymakers to Green the Financial System [Link]
NGFS Bridging Data Gaps Report [Link]
CBI published Global State of the Market 2020 Report [Link]
CFMCA published summary for policymakers [Link]
Finance for Biodiversity Pledge Overview on Biodiversity-Related Initiatives for Financial Institutions [Link]
Greening the Banking System: Experiences from the Sustainable Banking Network (SBN) [PDF]
Private Equity and Venture Capital’s Role in Catalyzing Sustainable Investment [PDF]
Greening Banks and Capital Markets for Growth [PDF]
As capital providers, banks are ideally placed to help the private sector adapt to new economic realities linked to environmental and social (E&S) sustainability – such as climate change, changing communities, and increased resource scarcity – and to contribute to national sustainable development agendas. However, for banks to effectively integrate new practices in E&S risk management and green and inclusive lending, they require an enabling regulatory context that ensures a level playing field and provides the right economic incentives.
With this in mind, a growing number of emerging market banking regulators have started to team up with partner agencies to pioneer the development of regulatory guidance that encourages local banks to adopt sustainable banking practices. This includes more effective management of E&S risks in the projects they finance and support for businesses that are greener, climate friendly and socially inclusive.
To date, 25 countries have launched national policies, guidelines, principles, or roadmaps focused on sustainable banking. They include Bangladesh, Brazil, Cambodia, China, Colombia, Ecuador, Georgia, Ghana, Indonesia, Kenya, Mexico, Mongolia, Morocco, Nepal, Nigeria, Pakistan, Panama, Paraguay, Peru, Philippines, South Africa, Sri Lanka, Thailand, Turkey, and Vietnam. The SBN provides the institutions a space to exchange experiences, gain knowledge, and collectively drive the sustainable finance agenda.
SBN Global Meetings are held every two years and are the principal space for dialogue, networking, and knowledge generation. A different member country, in cooperation with IFC, hosts the Global Meeting each time. SBN members also are invited to participate in IFC-hosted dialogue events and expert groups, such as the annual Performance Standards Community of Learning for financial institutions, which adopted the Equator Principles. These events provide members the opportunity to dialogue with leading worldwide commercial banks, and this interaction is strategic for developing regulatory guidance.
SBN has four member-led thematic working groups:
SBN Measurement Working Group, established in 2016, the WG responds to SBN member demand for a systematic approach to assess and benchmark country progress in developing national sustainable finance frameworks. Up to September 2020, the WG has comprised representatives from 12 countries and regions and was chaired by the China Banking and Insurance Regulatory Commission (CBIRC) and the Indonesia Financial Services Authority (OJK).
The WG has developed and refined a Measurement Framework that was approved by all members and continues to evolve to keep pace with country-level and global developments. New Co-Chairs and members of the WG were announced in October 2020 and are guiding the latest update of the SBN Measurement Framework as well as development of SBN’s 3rd Global Progress Report, which will be published in October 2021. Read the MWG Terms of Reference.
In 2019, the Measurement Working group launched the second Global Progress Report and 30 Country Reports: www.ifc.org/sbn2019report.
In 2018, the Measurement Working group launched the first Global Progress Report and 10 Country Reports: www.ifc.org/sbnreport.
Sustainable Finance Instruments Working Group (the former Green Bond Working Group) , established in 2017, this WG responds to members’ interest in the global green bond trend and associated market opportunities. It led to the 2018 report “Creating Green Bond Markets”, which mapped green bond market developments in over 22 emerging markets and included a practical toolkit for SBN members. Going forward, the WG will expand to reflect new developments in social and sustainability bonds and loans and other financial instruments with green, social, and sustainability benefits.
SBN International Development Association (IDA) Task Force, established in 2018, responds to low-income members’ interests in finance for climate change. It aims to deepen the sustainable finance framework development and implementation in IDA member-countries. The task force constitutes 11 countries: three in advanced stages of implementing sustainable finance and eight at the outset of their journeys.
The IDA Task Force aspires to raise environment, social, and governance risk management standards in financial markets, to mobilize financing, particularly from private sector, for climate change mitigation and adaptation in line with the Paris Agreement, and to support capital flows that deliver the Sustainable Development Goals. Private sector finance in emerging markets can make a substantial difference.
Data & Disclosure Working Group: Announced in 2019, this WG responds to the current global need for improved data and disclosure by the financial sector to support national sustainable finance ecosystems and enable regulators and supervisory agencies to better assess environmental, social, and governance (ESG) risks at the market level and incentivize the transition to green economies. Recent trends include the growing need for climate-related data, driven by initiatives such as the Task Force on Climate-related Financial Disclosures (TCFD). The WG will map the latest country-level developments in sustainable finance data and disclosure across the SBN community as well as international initiatives to facilitate the continued development of tools and practical guidance for SBN members.
SBN Contact: SBN Secretariat – SBN_Secretariat@ifc.org
Media Contact: Kathryn Graczyk – KGraczyk@ifc.org
Short URL for this page: www.ifc.org/sbn