Principles On Financing US Shift To A Low-Carbon Economy

Climate change is one of the greatest global challenges facing our society, and financial firms as global capital providers play a key role in financing the creation and deployment of solutions that mitigate greenhouse gas emissions, promote green energy generation and strengthen community resilience. While individual institutions have a significant role to play in the global effort to address climate change, policy must provide a critical foundation.

On February 17, the US Climate Finance Working Group, which comprises ISDA and 10 other trade associations, published principles for a US transition to a sustainable low-carbon economy. The principles are intended to serve as a useful framework, offering perspectives from the full spectrum of the financial services industry including banks, investment banks, insurers, asset managers, investment funds, pension funds and other financial intermediaries.

https://twitter.com/ISDA/status/1362374140980834304

The principles are:

• Set science-based climate policy goals that align with the Paris Agreement
• Increase and strengthen US international engagement
• Provide clear long-term policy signals that foster innovation in financial services
• Price carbon and leverage the power of markets
• Minimize costs and support jobs in the transition
• Foster international harmonization of taxonomies, data standards and metrics
• Promote more robust climate disclosure and international standards
• Ensure climate-related financial regulation is risk-based
• Build capacity on climate risk modeling and scenario analysis
• Strengthen post-disaster recovery, risk mitigation and adaptation

The full PDF of the principles, Financing a US Transition to a Sustainable Low-carbon Economy, is available here.

Source: ISDA