G20 encourages development of framework for financial transition

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Jakarta The second Sustainable Finance Working Group (SFWG) meeting under the G20 Indonesia Presidency encouraged the development of a framework for financial transition and to increase the credibility of financial institution commitments.

“This includes transitional frameworks, case studies, and commitments of financial institutions, which focus on market practices,” Dian Lestari, Head of the Center for Climate Change Financing and Multilateral Policy at the Ministry of Finance’s Fiscal Policy Agency, stated here on Saturday.

Moreover, the SFWG also encourages the improvement of sustainable financial instruments to strengthen accessibility and affordability, including on access to sustainable financial markets globally.

The discussion on sustainable financial instruments also includes risk reduction mechanisms as well as efforts to address knowledge gaps, especially for relevant stakeholders in developing countries and in the Small and Medium Enterprises (SMEs) community.

“The SFWG also discussed the progress pertaining to the G20 Sustainable Finance Roadmap,” Lestari noted.

Lestari remarked that the various discussions were a continuation of the first SFWG meeting held in January and the First Meeting of the Ministers of Finance and Central Bank Governors in February 2022.

Lestari explained that development of the transitional financial framework was aimed at assisting the potential of financial markets in supporting a sustainable transition.

Meanwhile, increasing the credibility of the commitments of financial institutions is carried out by establishing best practices for net-zero implementation and related commitments.

Lestari stated that the SFWG priority agenda has two workstream focuses comprising Workstream 1 on deepening of key elements to develop voluntary principles.

Workstream 2 aims at improving sustainable financial instruments, with a focus on increasing accessibility and affordability.

Lestari stated that the Workstream 1 and 2 align with the goal of preparing voluntary recommendations and options on the efforts of companies across jurisdictions, especially in developing countries, while SMEs can access affordable green and sustainable financial markets.

Lestari noted that the SFWG, under the G20 forum, played an important role in promoting and advancing the G20 framework and roadmap for innovative and sustainable finance.

Source: Antara News