Free Inclusive and Sustainable Finance Research Conference

The annual Inclusive and Sustainable Finance Research Conference is a free academic conference which is organised by the University of Luxembourg, AFI and the ADA University Chair in Financial Law (Inclusive Finance). The conference showcases sustainable and inclusive finance projects as well as research results.
 
This year, the focus will be on green fintech and inclusive green finance. The event will be held on 22 November at 09:30 CET, both in person at the University of Luxembourg as well as online.  

Taking stock of inclusive green finance policies in Asia

Inclusive Green Finance (IGF) is an emerging policy priority for central banks and financial regulators in the AFI network as it helps build climate resilience of vulnerable people by promoting climate mitigation and adaptation projects. However, clear policy and regulatory definitions, concrete objectives and incentives are needed in policy and regulation to foster the development of inclusive green finance and to prevent greenwashing. 

ADA’s Head of Knowledge Management, Mathilde Bauwin, will contribute to the debate by presenting a comparative study of inclusive green finance regulations and policies in five Asian countries in an effort to distil common denominators. This study was carried out in preparation of an upcoming 5-year programme and identifies the main regulatory gaps and barriers. The study particularly highlights that financial inclusion policies are not linked to the impact of climate change.

Furthermore, a lack of green taxonomies or insufficient participation and representation in policy design are among the main gaps pertaining to policy formulation, while a lack of skills and capacities within financial institutions leads to poor policy implementation. The authors also make recommendations on how to render the policy and regulatory framework more conducive to the development of inclusive green finance.

Other ADA projects aim to develop green loans for vulnerable populations to facilitate their access to basic services such as water, energy or housing. In addition, ADA is taking a more holistic approach under its current strategic plan and will strive to develop climate-smart, inclusive financial solutions instead of focusing exclusively on green microcredit.

Roadmap for inclusive green finance implementation

Dirk Zetzsche, the current holder of the ADA University Chair, will present a roadmap for inclusive green finance implementation, which was first showcased at a COP27 side event on 16 November. 

A team of authors coordinated by the ADA Chair in Financial Law (Inclusive Finance) at the University of Luxembourg drafted this roadmap based on six building blocks.

Each country has specific climate-related challenges and financial objectives. Policies must therefore take into account the country’s context, priorities, banking sector size, availability and readiness of credit financing schemes, significance of local capital markets, level of development of digital retail payment systems and the size of the market for digital financial services (DFS).

To succeed, regulators will need to commit a significant amount of existing and new types of resources in terms of technology, hard science and data generation and all efforts need to harmonize with other national and international frameworks. 

The report was supported by ADA and the Directorate for Development Cooperation and Humanitarian Affairs of the Ministry of Foreign and European Affairs of the Grand-Duchy of Luxembourg, and the Alliance for Financial Inclusion (AFI) Inclusive Green Finance Working Group (IGFWG), supported by the German Federal Ministry for Economic Affairs and Climate Action (BMWK).