Ladies and gentlemen, 2015 was a profoundly important year, where the international community agreed universally applicable sustainable development goals and a climate deal, both of which will have far-reaching implications.
Finance was recognized as a keystone in implementing these agreements, as well as in the financing for development package agreed earlier in Addis Ababa in July. What is also clear is that a new model of green and sustainable finance is emerging ? a networked solution that involves long-term policy signals, market innovation along with public finance and regulatory engagement.
At the same time, 2016 is proving to be economically challenging, with signs of fragility, and policy debate focusing on whether the world is entering a prolonged period of slower growth. The challenge and the opportunity is to recognize the connection between these two apparently separated worlds.
While estimates vary, we face the need to invest around US$ 90 trillion in sustainable infrastructure assets over the next 15 years, most of which will come from private sources. On top of this is the need to deliver access to finance across the world as well as higher risk funding of breakthrough technologies.
These investments will finance everything from energy transition to a climate resilient basis for agricultural production, and will crucially provide a direct boost to the economy as well as enhanced productivity for longer term, inclusive and sustainable development.
Private capital is needed at scale to finance these investment needs. The global financial system is estimated at about US$ 300 trillion ? including US$100 trillion held by institutional investors searching for investment opportunities to deliver the financial returns needed to provide adequate pensions, insurance cover and reliable savings. The challenge is to see green finance as a way of deploying these pools of capital in ways that drive productivity growth and thereby generate the wealth to meet the needs of a growing and ageing world population.
Productivity- and wealth-enhancing green finance directed at sustainable patterns of production and greening our economic infrastructure offers a pathway for underpinning this critical aspect of our financial escalator, by transforming savings into investments that deliver long- term returns.
It is this nexus between sustainable development, near-term growth and productivity enhancing green investments, on the one hand, and securing future pensions and returns from other long-term savings, on the other, that makes the topic of green finance so important.
I would like to congratulate the Governments of China and the United Kingdom, and the G20 as a whole, for the foresight in advancing the topic of green finance at this historical moment.
UNEP has two decades of experience in promoting green and sustainable finance, through its Finance Initiative involving a membership of over 200 financial institutions, and through its promotion of many international initiatives such as the Sustainable Stock Exchange Initiative and the Principles for Responsible Investment.
Most recently, UNEP has engaged in a two-year, path-breaking Inquiry into the practice and prospects of aligning the financial system with sustainable development outcomes ? broadly the topic of the G20 Green Finance Study Group and a reason why UNEP was invited to provide the Secretariat and the third pillar of this hugely significant development.
UNEP's Inquiry revealed a rapidly developing pattern of financial market developments that are consistent with the environmental and social aspects of sustainable development. Increasingly, this pattern has involved action by central banks and financial regulators, as well as standards and accounting bodies, stock exchanges and rating agencies, working in close collaboration with financial institutions.
Crucially, these interventions were all seeking to reassert the role of finance in serving the long-term needs of an innovative, dynamic, prosperous and, yes, an inclusive, green economy. From enhanced listing requirements in South Africa to green bond principles in China, and from climate stress testing in France to tax credits in the USA, all these practices are about reconnecting the financial and the real economies in ways that will ultimately support both citizens and investors.
Over the last decade we have launched the process of recasting almost every economic sector in the light of sustainable development imperatives, particularly environmental limits and now, centrally, also climate change. Finance is perhaps the next frontier in this urgent redesign process. For good reason, the UNEP Inquiry's global report, released at the last IMF Annual Meetings in Lima was entitled "The Financial System We Need". Today, ladies and gentleman, is another moment in advancing such a redesign.
