Introduction

On 3 February, 2023, the Global Green Finance Leadership Program (GFLP) was invited to speak at the side event on capacity building of the G20 Sustainable Finance Working Group (SFWG) first meeting in 2023. Liu Wei, Coordinator of the GFLP has elaborated on the work done so far and provided insights on the demand, provision and gap in capacity building for green and sustainable finance. 

Capacity building is one of the three key agenda priorities under Indian G20 Presidency, alongside mechanisms for mobilization of financial resources for climate finance and enabling finance for the Sustainable Development Goals (SDGs). The main purpose of this side event is to take stock of existing capacity building activities and initiatives in capacity building for green and sustainable finance, identify gaps and challenges, and develop recommendations to enhance the capacity building.

 Experts’ insights

In her presentation, Liu Wei introduced the main topics covered in previous GFLP events, including transition finance. As one of the key priorities of the G20 Sustainable Finance Report 2022, transition finance was believed to be very important to help high-carbon sectors transition to green and low-carbon ones in a fast manner. “However, transition finance is still very new to most stakeholders in both the financial sector and real sectors and should be included in the global efforts for capacity building. We therefore have already included this topic into our trainings and strongly believe that coordinated efforts shall also be made at the G20 level”, said Wei in her speech.

In response to these challenges, the GFLP provided a few recommendations, including asking “The G20 SFWG to facilitate the creation of a network to coordinate various capacity building programs, including via leveraging the resources of MDBs, research bodies and think tanks”. Other recommendations include:

• Capacity building service providers need to better understand local circumstances to ensure effectiveness of their services, and to facilitate the development of localized solutions for EMDEs;

• Governments, IOs, philanthropies should devote more financial resources to support sustainable finance capacity building, especially in EMDEs;

• Governments are recommended to develop special programs for SMEs to enhance their understanding of climate risks and building capacity for green finance.

Looking forward, the GFLP will continue to develop knowledge products, foster green project showcasing, and carry out capacity building activities as encouraged by the G20 Sustainable Finance Roadmap.

At the panel discussion, other speakers also resonated with these challenges and recommendations, including Sherine Hamed El Sharkawy, Deputy Minister of Finance for Economic Affairs at Egyptian Ministry of Finance, introduced the green and sustainable finance framework developed and used in Egypt to support some key national green projects; Jeremy McDaniels, Senior Policy Advisor, Sustainable Finance at IIF; Dr. Paul Ryan, Head of International Finance and Climate Division, Ministry of Finance of Ireland, and Rong Zhang, Global Coordinator of Sustainable Banking and Finance Network (SBFN).

About the GFLP

The GFLP is as a global platform for capacity building, knowledge sharing, inspiring innovations for scaling up green and sustainable finance. It was launched in 2018 and is currently hosted by the Institute of Finance and Sustainability (IFS). Since its creation, the GFLP has carried out 11 conferences, convening more than 4000 participants from 70 jurisdictions, most of which are developing economies.