What is Green Finance? Simply put, green finance or sustainable finance, is financial investments flowing into sustainable development projects and environmental initiatives. After some 30 years of working on this issue, sustainable finance takes into account environmental, social and governance (ESG) considerations and includes a strong risk component. For a long time, sustainable finance and its products were a niche market.
Today, sustainable finance is central to the future of the global economy and it’s a vital tool to deliver the Paris Agreement and the Sustainable Development Goals. It’s changing how financiers think about risk management, traditional investment portfolios, banking, credit etc.
Is Green Finance the same as Climate Finance? One aspect of green or sustainable finance is climate finance. The Intergovernmental Panel on Climate Change (IPCC) SR15 report, made it clear that “rapid, far-reaching and unprecedented changes in all aspects of society, but bring clear benefits to people, ecosystems and the economy.” The report calculates that a 1.5C warming trajectory would require the global economy to cut greenhouse gas emissions by around 45 per cent between 2010 and 2030 and be at net zero emissions by 2050.
The world needs to a build net zero global economy by 2050. Every bit of extra warming matters.
The financial sector has a critical role to play in redirecting large amounts of capital away from high carbon assets into low carbon and climate-resilient infrastructure.
The IPCC estimates that around USD 2.4 trillion or roughly 2.5% of global GDP annually needs to be invested in the energy system between 2016 and 2035. There is also a target figure in the Paris Agreement of mobilsing US$100 billion a year by 2020 by developed countries for developing countries. The International Energy Agency (IEA) estimates that we need to spend US$359 trillion by 2050 to avoid catastrophic climate change.
Public finance will not be able to deliver this enormous need for zero carbon funding and private sector investments are vital (approx 80% of climate financing will need to come from the private sector).
Will you be fundraising from individuals, foundations and corporations? Yes. In our first phase of fundraising (Phase 1) we received monies from individuals and some small grants from foundations and companies. In our second phase of fundraising, we are seeking larger corporate and philanthropic support and if needed, we will do some crowdfunding.
What do you mean by a phased, pledged fundraising approach? To ensure the success of this project, we are phasing our project costs based on our fundraising activities and pledges received.
Phase 1 – our initial fundraising activity began by getting pledges from individuals which then turned into donations. These have paid for costs to get the project going and will take us up to commissioning the artist.
Phase 2 – will begin once we have received corporate and foundation pledges that will cover the artist fees, and associated costs such as installation, insurance, planning applications, project management, fundraising and launch activities.
Will I get a refund if for some reason the project does not go ahead? No. It is not possible to issue refunds for this project. If for any reason the project doesn’t reach completion or surplus funds are collected, any remaining funds will be donated to a charity or charities chosen by the sculpture committee.