18 April 1997 | Minsk, Belarus
Conference Overview
I. Role of the Private SectorII. Objectives of UNEP’s Financial Services Initiative
III. Strategy
IV. UNEP’s Financial Services Initiative
V. Recent Activities
VI. Planned Activities for 1997
I. Role of the Private Sector
In 1995, ODA amounted to US$ 58.9 billion (OECD), foreign direct investment was estimated at US$ 325 billion (UNCTAD 1996, World Investment Report) as compared to public sector spending (US$ 44 billion). With the growth and increasing globalization of the world economy the share of the contribution of the private sector in total investments is expected to increase further. Increasing private investment means that it is imperative that attention must be paid to the environmental responsibility within the investment and development process, if sustainable development is to achieved. The Financial Service Sector (FSS) is the most important contributor of private sector credit. The signals they send their clients about the relationship between environmentally sound management practices and credit lending rates is an important element in building sustainable development. The private sector harbours skills, technologies, economic resources and generates employment, which can contribute to sustainable development. The capital markets are an excellent media for information sharing and dissemination, and that the sum of decisions shape the world economy & ultimately the achievement of a more sustainable future. The FSS can contribute to the quality of the environment and the optimum use of natural resources through the economic activity it generates through its lending and investment practices. The FSS can be responsible for financing possible environmental disasters (usually referred to as the issue of potential liability). Investment in the provision of environmental goods and services has become big business, because it provides attractive returns, emerging environmental markets offer the highest expected growth rates, and receive support by governments and international organizations.- US$ 300 to 600 billion is expected to be spent globally by the year 2000 on pollution control goods and services.
- US$ 1 trillion will be needed for new power generation capacity in developing countries and countries with economies in transition alone between 1993 and 2000.
- US$ 250 billion is expected to be spent on energy efficiency projects over the next 20 years; and
- The global market for electric vehicles is expected to grow from virtually nothing in 1994 to US$ 2.5 billion by the year 2000.
Conclusion
- There is now a clear realization that sustainable development cannot be achieved by governments acting alone. In this context the role of the private sector is crucial. Not as a matter of corporate philanthropy, but rather because it is in the best self-interests of the private sector to understand and capitalize on the fast growing environmental markets and the opportunities they offer.
- The FSS can provide a valuable contribution in supporting government efforts to achieve sustainable development.
- Governments as well as the private sector have an interest in sustaining the earth’s life support system, without which economic activity would not be possible.
- For the financial services sector, change, anticipation and adaptation to customer needs and market trends is a matter of competitive survival.
II. Objectives of UNEP’s Financial Services Initiative
The main goal of UNEP’s Financial Services Initiative is an increased environmental responsibility in all aspects of business. This can be translated into the following objectives:- Enhanced awareness of the need and benefits of taking environmental considerations into account.
- Increased commitment by the private sector to integrate environmental considerations in their internal and external operations.
- Design approaches and tools to aid in sound investment decisions for sustainable development.
III. Strategy of UNEP’s Financial Services Initiative
- Promote UNEP’s statements of environmental commitment for banks and the insurance industry amongst financial services institutions.
- Facilitate dialogue and the creation of a platform in which views and best practices among commercial banks, national associations, multilateral and regional development banks, government officials and others, can be exchanged.
- Promote the development of innovative financing mechanisms for environmentally responsible investment.
IV. UNEP’s Financial Services Initiative
UNEP’s Statement by Banks on the Environment and Sustainable Development has been launched in 1992 and includes so far 93 signatories from 25 countries. Among the signatories are 13 Polish, 1 Rumanian, 1 Hungarian, 1 Bulgarian, 1 Slovenian Bank and recently the first Russian bank. UNEP’s Statement of Environmental Commitment for the Insurance Industry was launched in 1995 and includes 63 insurance companies from 23 countries including one Russian signatory. By signing the statements signatories:- Acknowledge the various roles of industry and government in promoting sustainable development, and pledge to work together to achieve this goal.
- As appropriate to their specific business, signatories pledge to increase environmental responsibility in their internal operations, risk assessment and management, and asset management.
- Commit themselves to promoting these objectives to the broader community.
V. Recent Activities
Meetings and Outreach
- A Round Table workshop on “Banking and Environment” was held in London, November 1995. This meeting was attended by more than 150 participants from private and public sector financial services institutions and government officials (Report available).
- A Briefing Session for the Permanent Missions in Geneva on UNEP’s activities with the Financial Services Sector was convened in March 1996. The meeting was attended by more than 35 representatives from local missions in Geneva and a number of NGOs.
- A Round Table Workshop on “Implementing Environmental Commitment in the Insurance Industry” was held in London on 20-21 May 1996. The workshop was attended by more than 130 government officials and representatives from the insurance industry ( Report available).
- A workshop on “Financial Services and the Environment” was held in Moscow, in November 1996 in response to an expressed interest from some Countries in Transition. The aim of this workshop was to brief banks and insurance companies in Eastern Europe on UNEP’s activities with the financial services sector and to promote the UNEP Statements in this region. More than 70 participants from this region attended this workshop (Report available).
- Regular meetings and telephone conferences of the UNEP Bank Advisory Group and the UNEP Insurance Steering Group were held throughout the year in order to prepare for conferences and strategize activities in the area of banking/insurance and the environment.
Research and Other Activities
The UNEP Insurance Steering Committee on behalf of the signatories to the UNEP Insurance Statement has launched a position paper on insurance and Climate Change which has been presented to the delegates of the COP2 of the United Nations Framework Convention on Climate Change (UNFCCC). In this position paper the insurance industry had called for an early and substantive reduction of greenhouse gas emissions. In 1995 UNEP in close collaboration with Green Alliance, an independent environmental organization working in the UK, carried out a survey to establish and assess the implementation of environmental commitments by banks that signed the Statement by Banks on Environment and Sustainable Development. (A copy of the report is available). A newsletter to facilitate information exchange on environmental matters within the financial services sector has been developed and has been launched in January 1997. ^ topVI. Planned Activities for 1997
Meetings and Outreach
- The next Banking Round Table meeting on “The Environment and Financial Performance” will take place in New York, 22-23 May 1997. It is expected that more than 300 representatives from financial services institutions will gather at this meeting to discuss issues related to banking and environment.
- The second Insurance Round Table Meeting will take place in Tokyo on 4 December 1997 and will be hosted by Sumitomo Marine and Fire which is a member of the UNEP Insurance Steering Committee.
- Outreach workshops to promote the UNEP Statements in different regions are planned for this year in the following regions: South Africa, East Asia, Central and Eastern Europe, and North America (subject to the availability of funds).
Research and Other Activities
A project on surveying current practices for incorporating environmental information in the activities of rating analysts is under discussion and intended for implementation later this year if funds become available. The signatories of the UNEP Insurance Statement will form an association in order to have a much stronger voice to promote environmental issues in the intergovernmental arena and to raise money for activities in the area of insurance/investment and the environment. The first annual meeting of the association will take place in Zurich in July 1997. The proposed Insurance Industry Initiative for the Environment Association is planning to launch, at the COP 3 Meeting of the UNFCCC in Kyoto, another position paper on climate change related issues. The paper will focus on “Investment and Climate Change” and it will be presented to the delegates of the COP 3 meeting at a special event during the meeting. UNEP is in the process of facilitating the formation of working groups on topics which are of high interest for this sector, such as investment and environment, environmental liability insurance and climate change issues. The North America Financial Services Advisory Group will be launched at the upcoming Bank and Environment meeting in New York. It is planned to form other regional FSS Advisory Groups in Asia and Eastern Europe. The aim of such regional groups is to promote the UNEP Statements in the regions and to plan and carry out regional activities. ^ top,malcolm test,test, I. Role of the Private Sector
II. Objectives of UNEP’s Financial Services Initiative
III. Strategy
IV. UNEP’s Financial Services Initiative
V. Recent Activities
VI. Planned Activities for 1997