101 Sustainable Finance Policies for 1.5°C

What is the easiest way for regulators to support climate investment?

The Climate Bonds Initiative published its 101 Sustainable Finance Policies for 1.5°C report to demonstrate how countries can save trillions of dollars by financing climate action as soon as possible.

Policymakers have a crucial responsibility in providing a level playing field to drive investment towards sustainable projects. A few key policies that can be carried out by all countries include:

• Policy 1: set up national and sectoral carbon budgets incorporated in development plans to ensure upcoming policies are ambitious enough.
• Policies 10 to 13: derisk climate investments using financial incentives, tax credits and subsidies.
• Policy 19: direct capital from institutional investors towards innovative and higher-risk markets by ramping up blended finance initiatives.
• Policies 49 and 97: enable capital to move a scale by providing clear standards and taxonomies to financial actors regarding the definition of sustainable, green and resilient investments.
• Policies 81 and 88: have central banks recognise climate risks as financial risks and incorporate them in asset purchase and reserve requirements.

The IPCC recently stressed we have a « closing window of opportunity » to address climate issues and stay in line with a 1.5°C warming scenario.

A quick transition to a less carbon-intensive economy will not only lead to substantial saving, but also reduced climate change, job creation and avoided stranded assets, which should be key priorities for governments, regulators and central banks.