The new Global Green Finance Index (GGFI) was launched by Finance Watch and Z/Yen at an event in Brussels. The GGFI ranks the world’s financial centres according to perceptions of the quality and depth of their green finance offerings.
In this inaugural edition, financial centres in Western Europe outperformed those in other regions. The full report can be downloaded here.
The report’s findings include:
• The leading green financial centres in each region are London, San Francisco, Shanghai and Shenzhen, Johannesburg and Cape Town, Mexico City, and Moscow.
• Paris, Frankfurt and New York lead the centres most cited as likely to become more significant over the next two to three years.
• Financial centres that have shown leadership in green finance policy are expected to gain in significance, with Paris at the top of this list.
• In some countries, smaller centres with a strong green focus such as San Francisco and Hamburg outperformed larger centres such as New York and Frankfurt.
• The rankings are liable to change in future editions, as they are based on tightly clustered scores in the range of 322-437 points out of 1,000.
• The level of scores suggests that green finance can grow substantially in size and quality.
• Supportive policy measures and investor demand are seen as the main drivers of green finance.
• Renewable energy investment, green bonds and sustainable infrastructure finance were rated as areas of high impact on sustainability and of high interest to respondents.
• Disinvestment from fossil fuels was rated as high impact on sustainability but low interest to respondents, suggesting room for policy change.
Top five centres for green finance - penetration
Top five centres for green finance - quality
Dr. Simon Zadek, co-director, UN Environment Inquiry into the Design of a Sustainable Financial System; visiting professor and DSM senior fellow for partnerships and sustainability, Singapore Management University, said:
“Ratings and indexes are important instruments to enable effective communication of relative and absolute progress, as well as encouraging a race to the top, and a healthy debate of what constitutes success and how it can best be measured. In this spirit, Finance Watch and Z/Yen have taken us all to the next level in providing us with the first globally applicable index of developments in greening the world's financial centres.”
Michael Mainelli, executive chairman of Z/Yen, said:
“The core of the GGFI is a perception survey which observes and promotes change where it matters most – in people’s minds. The more we can get people talking about a sustainable transition, the quicker it will happen. The high level of interest in GGFI 1 is a step in that direction.”
“The GGFI aims to contribute to the definition of green finance and identify best practices and areas for improvement. We hope it will promote bold policy initiatives and high-quality financing that can cut through greenwash. It is urgent that sustainable finance becomes mainstream in all financial centres.”
André Hoffman, president of MAVA Fondation pour la Nature, said:
“We are pleased to be supporting the GGFI as part of our programme to contribute to the creation of a more sustainable global economic system. We are particularly excited that smaller and more specialised centres, such as Hamburg and San Francisco, and financial centres with strong policy frameworks around green finance, such as Paris, Luxembourg and the Chinese centres, have performed well in this first index. We hope more centres will follow where they are leading.”