Germany launches sustainable finance council to leverage climate action
Clean Energy Wire
The new advisory council on sustainable finance established by Germany’s government has held its first meeting to debate how the country’s financial sector can better contribute to climate action and other sustainable development goals. Germany’s environment ministry (BMU) and finance ministry (BMF) jointly appointed the council that consists of representatives from the financial sector, industry, civil society groups and scientists. Jörg Kukies, state secretary in the finance ministry, said a better risk assessment regarding environmental and climate risks when issuing credits or insurances was in the own interest of financial market actors. “This belief is not only held by the finance ministry and regulators, but also by the finance industry itself,” Kukies said.
Christoph Bals, who represents NGO Germanwatch in the council, said a new framework for financial markets was an important supplement to measures like the planned Climate Action Law or a carbon price. “This is the only way financial markets can create positive leverage for climate action and human rights,” Bahls said. Matthias Kopp of environmental NGO WWF said that the government had to come up with a clear strategy for sustainable finance before the end of the year. He argued that Germany must play a much more active role in EU initiatives like the action plan on sustainable finance and had to steer the so-far largely “aimless” domestic debate about green and sustainable finance in the right direction.
The finance sector as a lever for change in climate policy has increasingly come into the focus of policymakers, with Chancellor Angela Merkel and environment minister Svenja Schulze both calling for greater consideration of climate risks in the sector in recent weeks. However, sustainable finance researcher Christian Klein told Clean Energy Wire in an interview that despite all progressive rhetoric, financial markets currently still seem to bet that international climate agreements will not be honoured.