Emerging economies and developing countries need “more private financing” for climate action. The International Monetary Fund warns of this in an important report that will be published next week. The IMF also calls on banks and insurance companies to better formulate sustainability policies.
The International Energy Agency had previously estimated that emerging economies would need nearly $2,000 billion (1,900 billion euros) annually by 2030 to become climate neutral by 2050. The IMF asserts that “this is a five-fold increase compared to climate investments.” The current $400 billion (€380 billion) planned over the next seven years.”
According to forecasts, the growth of green public investments in the countries concerned will be limited. This means that private investors will have to make a significant contribution. The International Monetary Fund estimates that about 80% of investments must be paid by parties other than governments.
The latter is easier said than done because conditions are often not in line with the requirements set by large private investors. Therefore, investments there are more risky. The International Monetary Fund has noted that there are more and more investors who want to invest sustainably. But the focus is often on the right sustainability outcomes, rather than on the true impact of investments.
The latter is something that needs improvement. “Policy must refocus on climate impact and no longer support activities that are already ‘green’. The specific needs of emerging markets must also be taken into account.”
The IMF also looked at the world’s 39 largest banks and insurance companies. The report notes that they have not yet properly aligned their sustainability policy with climate goals. In most cases, policies in this area are poorly formulated or are not yet in line with the goal of becoming climate neutral. A lot of money still goes to fossil companies.
Free unlimited access to Showbytes? Which can!
Log in or create an account and never miss a thing from the stars.
“Total coffee specialist. Hardcore reader. Incurable music scholar. Web guru. Freelance troublemaker. Problem solver. Travel trailblazer.”