In harnessing the synergies between green finance and financial inclusion, financial regulators, supervisors and government finance executives can help improve the livelihood of low-income households and MSME, while simultaneously contributing to climate change adaptation and mitigation.
Inclusive green finance plays an important role in supporting vulnerable groups in adapting to global environmental change and strengthening their resilience.
JUST TRANSITION TO A RESILIENT AND ENVIRONMENTALLY SUSTAINABLE ECONOMY
CLIMATE CHANGE AND ENVIRONMENTAL DEGRADATION
VULNERABLE GROUPS
FINANCIAL STABILITY
SOCIAL INEQUITY
ADAPTATION TO ENVIRONMENTAL CHANGE & ENHANCING RESILIENCE MARKET-SHAPING POLICIES
Implement regulatory enablers for mobile money, microinsurance and other resilience-supporting (digital) financial services
Enact Enterprise Security Risk Management (ESRM) guidelines that incorporate environmental and social risks
Awareness-raising and capacity building measures for financial institutions
Green finance taxonomies for MSMEs and smallholder farming
Consumer protection, awareness-raising and capacity-building measures for vulnerable end-users
ADAPTATION TO ENVIRONMENTAL CHANGE & ENHANCING RESILIENCE DIRECT INTERVENTIONS
(Digital) cash transfers to disaster affected
Subsidies or guarantees for credit to invest in adaptation / resilienceenhancing activities
Directed credit / sectoral credit targets
MITIGATION OF ENVIRONMENTAL CHANGE MARKET-SHAPING POLICIES
Regulatory enablers for Pay-as-you-go solar and water.
Prudential rules that incentivize credit to green MSMEs or sustainable agriculture
Enact Enterprise Security Risk Management (ESRM) guidelines that incorporate environmental and social risks
Awareness-raising and capacity-building measures for financial institutions
Guidance and incentives for inclusive green FinTech innovation
MITIGATION OF ENVIRONMENTAL CHANGE DIRECT INTERVENTIONS
Subsidies or guarantees for credit to invest in new resource-efficient / low-carbon practices / technologies
Directed credit / sectoral credit targets
This framework is congruent with the four areas of IGF known as the 4Ps of Inclusive Green Finance, and the Sharm El Sheikh Accord on Financial Inclusion, Climate Change, and Green Finance. This framework also supports Sustainable Development Goals.
AFI’S 4P FRAMEWORK OF INCLUSIVE GREEN FINANCE
Read the full report: INCLUSIVE GREEN FINANCE: FROM CONCEPT TO PRACTICE
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