Ban Ki-moon Urged to Champion Public Funds for Climate Finance

Ahead of next week’s U.N. General Assembly and Climate Summit, 118 groups from 37 countries urged U.N. Secretary-General Ban Ki-moon to ensure that private finance is not counted as international climate finance, as well as ensure that the green bond market is truly green. The Secretary General, this week, named green bonds as one of a handful of areas in which the summit is expected to deliver major outcomes.

“Secretary-General Ban Ki-moon’s emphasis on private finance at his Climate Summit is in danger of allowing rich countries to shirk their moral and legal responsibilities to provide public climate finance," said Karen Orenstein of Friends of the Earth U.S. “Many climate priorities of developing countries are not suitable for private investment. Public funds -- on a very large scale -- are essential if we are to avoid climate catastrophe for the world’s poor.” 

International climate finance is the provision of funds by developed countries to help developing nations adapt to the unavoidable impacts of climate change, reduce greenhouse gas emissions and embark on environmentally-sound development pathways. The groups also warned against the risk of greenwashing with private investment, particularly in the green bond market, which has grown exponentially.

“Green bonds can be key to shifting investment dollars away from climate pollution and toward environmentally sound initiatives, but we must make sure they do not fund dirty, destructive projects,” said Zachary Hurwitz of International Rivers. “This means that green bonds must stay well clear of fossil fuels, nuclear power, destructive dams, waste incineration projects and harmful biomass or forestry deals.”

“The market for green bonds is still in its infancy, yet we are already seeing green-labelled bonds linked to destructive dams. Even the coal industry is asking at its next Coaltrans World Coal Conference whether green bonds can be a ‘new frontier for the industry,’” said Ryan Brightwell of BankTrack. “Clearly the answer is no; we have to shut down coal, not extend its life.”

“For this market to have credibility as a means of tackling climate change, issuers need to adhere to clear and science-based criteria on what can be considered ‘green’ - with full consideration of the environmental and social impacts of what’s being financed and transparent, public reporting throughout the lifetime of the bond,” continued Brightwell.

Sean Kidney, CEO of the Climate Bonds Initiative, said, “The very real threat of catastrophic climate change is the most serious environmental challenge the world faces. We need a climate science-grounded approach to what can and should be included in the green bonds market. With a clear and easy to use framework, the green bonds market could make a huge contribution to financing our rapid transition to a low-carbon and climate resilient future.”

Friends of the Earth U.S., International Rivers and BankTrack also released a briefing on green bonds.

A copy of the civil society letter to UN Secretary-General Ban Ki-moon can be found here.