Scale up climate finance through the financial sector – “30 by 30 Zero”
Start & End Date: 2020-2027
Country/Countries: Egypt, Mexico, Philippines, South Africa
Multilateral Institution(s) Involved: World Bank, International Finance Corporation
The implementation of NDCs in emerging markets requires vast funding amounts, for which the financial sector plays a critical role. However, numerous aspects, such as limited under-standing of climate financing opportunities and a lack of consistent policies, have so far prevented sufficient mobilisation of funds.
To increase climate lending, the project supports the creation of domestic markets for climate financing in the partner countries. It follows a holistic approach, working at the political, market and financial institutions levels. This includes the alignment of financial sector strategies to support NDC implementation. In addition, by 2030, the share of climate lending in the participating banks' total credit portfolio shall be increased to 30 %, while climate and carbon-related risks are reduced. Finally, the project fosters climate investments through the development of domestic green bond markets. In Egypt, the country-specific activities include to i) support the Central Bank of Egypt (CBE) on the Sustainable Finance Principles, ii) align the construction materials sector with NDC target implementation, iii) capacity building on environmental and social risk management in financial institutions. In Mexico, the country-specific activities include to i) develop a sustainable taxonomy for the financial sector and to ii) support the climate thematic bond development. 30by30 zero Philippines will be supporting one of the largest commercial banks in the Philippines in the development of its Environmental and Social Management System (ESMS) policy. In South Africa, the activities include i) technical inputs to the Prudential Communication on Climate Risks, which set expectations for Banking and Insurance sectors of South Africa to monitor and manage climate risks, ii) capacity building in the South African Reserve Bank (SARB), iii) technical and financial support to the JSE, the country’s securities exchange, to develop sustainability and climate disclosure guidance for listed entities, iii) research to assess the climate risk exposure of its banks' portfolios and iv) inputs on just transition.
Many activities have been implemented so far including a Green, Social, and Sustainability (GSS) training in June 2022 to the Central Bank of Egypt with 23 participants of which 16 were women, a "Coordination Workshop with Multilaterals and International Cooperation Agencies" in Mexico City by IFC FIG LAC Mexico with the objective of mapping projects and initiatives related to climate finance and related issues and strengthen professional ties between the representatives of the various participating organizations. An awareness training was conducted in the Philippines on Green & Resilient Philippine Property Sector” on June 2022 to unpacks the important role of FIs and the tools they use to support the transformation toward a green, resilient, and inclusive development for the property sector. In South Africa, the program concluded a cooperation agreement in June 2022 with FirstRand, one of the country’s six systemically important financial institutions, to conduct research to assess the climate risk exposure of its agricultural portfolio, with a view to developing financial products that support climate risk mitigation and promote climate smart agricultural practices. Given the importance of financing a just transition to a low carbon, resilient economy, the program co-hosted a just transition finance event with the JSE in October 2021 and co-sponsored the Presidential Climate Commission’s multi-stakeholder conference on the country’s Just Transition Framework in May 2022.