Finance for a Green Economy

This policy brief by the Green Economy Coalition argues that the transition to a green economy requires not only new funding but a fundamental reform of the global and local financial architecture. It emphasizes the need to move away from short-termism and 'brown' investments toward a system that serves long-term societal and environmental needs, specifically highlighting the importance of directing funds to the global south and local actors.

• The transition to a green economy requires a fundamental reform of financial systems and incentives to move beyond short-term profit motives, which currently favor fossil fuel majors until they become 'stranded assets'. A new architecture is needed to translate environmental systemic risk into actionable intelligence for investors to stop investing in 'brown' assets and start investing in 'green' ones.
• There is a significant funding gap for the Sustainable Development Goals (SDGs), estimated at $2.5 trillion per year. To address this and deliver the Paris Agreement, the document suggests using decentralized financing to put money directly into the hands of NGOs, community organizations, micro-enterprises, and local governments to bypass barriers faced by larger funds.
• The brief proposes several specific financial mechanisms to drive the transition: implementing 'environmental and ethical stress testing' for bank balance sheets, increasing investment transparency so individuals can divest from 'brown' investments, and adopting a 'brown penalising factor' to make it more difficult for banks to hold and leverage loans for environmentally destructive projects.
• Current efforts to manage the finance transition include the UNEP Finance Inquiry (UNEP FI), which defines the new financial system's shape, and Finance Watch, which frames the reform agenda. While private finance is increasing through instruments like green bonds, the document notes that multilateral funds like the Green Climate Fund have struggled to secure additional funds and agree on projects.

APA

Green Economy Coalition (n.d.). Finance for a Green Economy. https://www.greeneconomycoalition.org/assets/reports/Cape-Town-Global-Meet-2019/PAGE-GEC-finance-policy-briefing_final.pdf

Chicago

Green Economy Coalition. Finance for a Green Economy. n.d. https://www.greeneconomycoalition.org/assets/reports/Cape-Town-Global-Meet-2019/PAGE-GEC-finance-policy-briefing_final.pdf.

Wikipedia

{{cite report |author=Green Economy Coalition |title=Finance for a Green Economy |url=https://www.greeneconomycoalition.org/assets/reports/Cape-Town-Global-Meet-2019/PAGE-GEC-finance-policy-briefing_final.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{greeneconomycoalitionndfinance, author = {{Green Economy Coalition}}, title = {{Finance for a Green Economy}}, institution = {Green Economy Coalition}, url = {https://www.greeneconomycoalition.org/assets/reports/Cape-Town-Global-Meet-2019/PAGE-GEC-finance-policy-briefing_final.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }