Chinese and Foreign NGOs Promote Sustainable Finance and Investment at G20

HANGZHOU (August 15, 2016) – Chinese and International Civil Society Organizations rallied around “Sustainable Finance and Investment,” a topic which has particular significance in China’s growth strategy, in anticipation of the 2016 G20 Summit (September 4-5, 2016 in Hangzhou, China).

A total of 10 NGOs, including the Global Environmental Institute, the International Institute for Sustainable Development, the Greenovation research Center, International Rivers, Institute of Public and Environmental Affairs and others, jointly drafted “Recommendations for G20 to Promote Sustainable Finance and Investment.”

The Recommendations were successfully submitted to the Civil 20 (C20) organizers and were incorporated in part into Article 20, C20 Communique. The full Recommendations and related Communique excerpt can be found below. The Recommendations called on G20 member countries on several points, namely, to strengthen the prevention and control on the environmental and social impact of financial and investment activities.

Along these lines, the Recommendations advise enhancing policies on transparency and information disclosure for financial and investment activities and also guiding public funds and social capital to participate in environmental and climate-friendly projects.

History of G20 and C20:

The G20 meeting was initiated by the governors of the Central Bank and finance ministers of Member States in 1998 to serve as a mechanism to promote cooperation and consultation on issues of international finance governance. Then, in 2008, as a response to the international financial crisis, G20 gradually expanded to incorporate issues of development, trade, investment, energy and climate change. As a regional dialogue mechanism of global governance, G20 plays an important role in promoting the reform of the international financial system and the stability and growth of the world economy.

The theme of the 2016 Hangzhou Summit is ‘toward an innovative, invigorated, interconnected and inclusive world economy.’

The C20 meeting was launched in 2013 during the Russian G20, which had been organized annually by the countries’ civil institutions. The C20 is a platform for global non-government organizations to discuss issues surrounding the G20 meeting and gives the civil society an opportunity to exchange relevant comments and recommendations for G20.

The 2016 C20 meeting was held in Qing Dao, China on July 5-6, with the theme of ‘poverty eradication, green development and innovation: role of civil Society.’

The 2016 C20 Communique was passed during the meeting and given to Mr. Xiaolong Wang, the Special Envoy of G20 at the closing ceremony.

Article 20, 2016 C20 Communique (to read the full version of the Communique, please click here) 

We support the G20 in its actions and initiatives for green finance and call for the upgrading of G20 Green Finance Study Group into a Working Group. Green finance shall be integrated into national development strategies. Active efforts shall be made to deliver green financial products and services, channel public fund and social capital into green projects, promote green PPP projects and increase investment in nature. Green taxation shall be taken into consideration and “green” bonds issued. We support development of third-party verification and international standards for issuing green bonds, building up the carbon market and enhancing international cooperation in this regard. In carrying out domestic and international economic projects, impacts on the environmental and social dimensions shall be taken into account and be assessed. Laws and regulations shall be formulated to enforce financial institutions and enterprises to disclose information on environmental and social impacts and protect the public’s rights to know and supervise.

Civil Organizations’ Suggestions on G20 Promoting Sustainable Finance and Investment

Global Environmental Institute, International Institute of Sustainable Development, Greenovation Research Center, International Rivers, Institute of Public and Environmental Affairs, Social Resource Institute, World Wide Fund for Nature (WWF), Oxfam, World Resources Institute (WRI) and China Association for NGO Cooperation

With our commitment to work with the public and private sector to promote sustainable growth, we, a group of civil society organizations, recognize that: Finance and investment connect the regional and the world markets, and are engines for economic growth and social development. While most finance and investment activities focus on economic gains, they also face fluctuations and crises, and place a great deal of pressure on nature resources and the environment. In countries where environmental governance is weak and public welfare is inadequate, finance and investment activities with environmental and social impacts are likely to cause resource depletion, ecosystem destruction, social conflict, which in turn bring economic failures.

G20 has played an important role in promoting a stable and robust world economy. In Antalya in 2015, G20 leaders continued their commitment to boost investment, support sustainability and pursue inclusive growth. In 2016, G20 established the Green Finance Study Group, which aims to identify institutional and market obstacles to the development of green finance, and to find the ways of mobilizing private capital for green investment. This July, the Trade Ministers Meeting passed the G20 Guiding Principles for Global Investment Policymaking, which emphasized that investment policy should follow the objective of sustainable development, and to promote and facilitate investors to follow international best practices of responsible business conduct and corporate governance.

We support G20’s initiatives on sustainable finance and investment, and suggest that the G20 and its member states consider the following measures:  

1. To incorporate green finance and responsible investment into national growth strategies; to actively manage negative social and environment impacts from financial and investment activities; and to strengthen the development and implementation of related policies;
2. To recognize that environmental and social risk (ESR) impact economic and financial stability and work towards common mechanisms within G20 countries and institutions to address ESR for economic and financial stability;
3. To set legal requirements for information disclosure, including requiring financial institutes and enterprises to improve information disclosure and transparency of their environmental, social and climate impacts, and to ensure stakeholders, including communities and civil society organizations, are properly consulted and guaranteed their rights for monitoring;
4. To strengthen multilateral financial institutions’ implementation of environment and social safeguard policies, and establish robust accountability and grievance mechanism;
5. To actively develop green finance products and services, and channel public fund and social capital to green projects;
6. Finally, that governments, financial institutions, enterprises and civil society should strengthen communication and cooperation on above measures, work together to promote finance and investment patterns with minimum biological footprints, and to expedite the process to achieve the Sustainable Development Goals, with the G20 playing its part.