Economist invited to speak at G20 Sustainable Finance Working Group
Professor Ulrich Volz, the Director of the SOAS Centre for Sustainable Finance, was invited to speak at the Second G20 Sustainable Finance Working Group (SFWG) meeting under India’s G20 Presidency. The meeting took place in Udaipur, Rajasthan from 21-23 March 2023.
The G20 Sustainable Finance Working Group is tasked to identify institutional and market barriers to sustainable finance and to develop options to overcome such barriers, and contribute to a better alignment of the international financial system to the objectives of the 2030 Agenda and the Paris Agreement.
Professor Volz was invited to present to G20 policymakers on the tools that central banks and supervisors can use to help align financial flows with sustainability goals and scale up sustainable finance. In his talk, he highlighted that central banks (and supervisors) have many instruments at their disposal that can be calibrated in ways that account for climate- and nature-related financial risks or impacts and that would help align financial flows with sustainability goals.
This includes monetary policy instruments such as climate-aligned collateral frameworks or reserve requirements and targeted refinancing operations, as well as different micro- and macroprudential instruments. They can also have market-shaping impact by managing their own non-monetary policy portfolios responsibly and by supporting the development of sustainable finance standards and taxonomies. A growing number of central banks has started to implement such approaches to mitigate risks and support the scaling up of sustainable finance and investment.
Professor Volz’s intervention was based on more than a decade of research and policy advice on the role of central banks in enhancing sustainable finance. The SOAS Centre for Sustainable Finance has been advising many central banks around the world on addressing climate and nature risks and has been conducting numerous capacity building programmes in this area for central banks and financial supervisors. For instance, the SOAS Centre for Sustainable Finance has recently delivered a large-scale capacity building programmes for the ten central banks of the Association of Southeast Asian Nations which will now go into its second year. The Centre has also worked recently with the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, in developing its Sustainable Central Banking Strategy.
