The Finance Initiatives have their roots in the concept of sustainable development, which reaches as far back as the 1972 Stockholm Conference on the Human environment. The 1992 United Nations Conference on Environment and Development (UNCED) clearly underlined the importance of integrating environmental, social and economic considerations as environmental concepts were being developed in isolation from mainstream economic policy. Founded in 1992, the UNEP Financial Institutions Initiative on the Environment (formerly Banking Initiative) is designed to engage a broad range of financial institutions including commercial banks, investment banks, venture capitalists, asset managers, multi-lateral development banks, and agencies in a constructive dialogue exploring the nexus between economic development, environmental protection, and sustainable development.
Goals and Objectives:
· promote the integration of environmental and sustainability considerations into the business choices of the financial services sector;
· foster private sector investment in environmentally sound technologies;
· raise awareness of policy and decision makers within governments and financial institutions about the relationship between trade, finance, environment and development;
· encourage public and private partnerships for sustainable development;
· deepen the level of the commitment by signatories, translating it into a voluntary code of conduct with verification and sanction mechanisms in place;
· aid national governments and financial institutions to further develop programme activities, helping to guide the flow of private capital into sustainable development, particularly in developing countries and countries with economies in transition, and aligning them with UNEP priority areas (Energy, Water, Land, Natural Resources and Climate Change);
· develop and assist enterprises and institutions in the use and application of assessment and incentive tools, including impact assessment, valuation, natural resource accounting and economic instruments, including the application of life cycle assessments of products and services, as well as the “polluter-pays principle”;
· further the understanding of these tools, particularly risk assessment of business activities by governmental and intergovernmental entities;
· enhance the capacities of the sector to understand the economic implications of environmental standards, Multilateral Environmental Agreements (MEAs), and the potential business opportunities involved;
· foster endorsement of the UNEP Statements by the finance sector and increase the number of signatories to each Initiative so that by 2003 at least 1% of the sector globally, by market capitalization, have endorsed the principles; and
· enhance the sector’s contribution in a way that the Initiatives become self-sustaining.
It is imperative that governments and the financial services sector work closely to enhance their understanding of the environmental and ecological risks associated with public and private investment, and develop policies and incentives which promote the implementation of sustainable public and private investments. With this objective in
mind, the UNEP Finance Initiatives (UNEP FI) work programme is based on three key pillars: generation of a series of practical management tools to encourage environmental and sustainability best practice within the financial sector, including export credit agencies; the creation of synergies with UNEP’s trade and economics
work, notably to strengthen the financial communities’ contribution to the trade and environment debate; and ensuring that the financial sector makes a significant contribution to the Rio+10 Summit.