B20 ITALY

Finance & Infrastructure

Policy Paper 2021

TABLE
OF CONTENTS
Foreword by the Task force Chair

5

Task Force Composition

7

Recommendations: Executive Summary

9

Recommendation 1: Sustainable Finance and Financial

2

Inclusion

12

Recommendation 2: Infrastructure Financing

28

Recommendation 3: Growth Engines

39

Recommendation 4: Global Regulatory Environment

60

Annexes61

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Foreword by the Task Force Chair
We are at the beginning of a possible recovery phase and as we share a renewed
sense of safety and trust, the real challenge for all of us is to make this recovery
solid, inclusive and sustainable for at least the next ten years.
All Taskforce members, whom I thank for their focus and dedication, challenged themselves and tried to imagine “How will the world look like in 2031?”.
Glimpsing ahead at future societies, we tried to envision how should policymakers manage to reverse or make significant progress in tackling inequality,
excessive indebtedness by mobilizing savings, and technology reshaping.
Job losses, poverty, growing social inequalities, indebtedness, fragility have hit
hard on vulnerable people, women, young and old people and students. The
pandemic has enhanced the relevance of well-planned ESG transitions and triggered deglobalization trends, thus accelerating the importance of a technology
reshape and of investing in material and immaterial infrastructure.
The pandemic has rapidly elevated some industries – especially in the technology sector - while pushing other ones to revisit their fundamental viability and,overall, it has enhanced the way we take care of the needs of our people, ourterritories and our customers, by increasing our drive to do things better, both
domestically and globally, notably over climate, diversity, equity and inclusion.
Impact investing within a sustainable framework - and one that is ESG compliant - is increasingly becoming the reference point of all involved long-term
stakeholders acting with a purpose, focused as they are in having welfare not
only not declining, but actually growing over time.
In line with these trends, we need to make a decisive shift towards a new modelof capitalism with a greater focus on sustainability, social and territorial cohesion. This is our responsibility towards the future generations.
It is time to make things happen: a further reason to have actionable proposals
for sustainable infrastructure, including healthcare, research, education andpeople care. This is becoming more relevant post pandemic, for everybody.
For this, we need a Recovery Impact Plan to foster inclusiveness and address
the social aspects of growth and their impact on inequality. This is the purposeof the B20 Italy Finance & Infrastructure Taskforce that I’m honoured to guide.
“Quality of life through service Infrastructure” is the very game changer; this is
the real role of sustainable infrastructure investment for the recovery. “Qualityof life through service Infrastructure” means investments in amenities, hospitals, mobility and transport, road maintenance, efficient telecommunication
networks, schools and education to ensure healthy lives and to promote wellbeing for all at all ages.
Urban Regeneration is a key driver for the post-Covid recovery: I think that it has
become urgent to fulfil a vision for sustainable metropolitan areas as places where citizens - an intergenerational mix of families, workers, students, senior people- can live locally, with everything they need just a short walk or a bike ride away.
Proximity - everyday closeness to people - is a value because it enables the possibility of “taking care of others”.
Our Taskforce journey can be summarized in three words: from Purpose to Impact
and Execution. Every day, governments, social communities, workers, corporates,
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entrepreneurs, supply chain and sectors leaders - all together – should be guided by a common purpose of “doing well by doing good”, tackling inequalities by“taking care of others” for a very New Renaissance.
Our B20 Taskforce has structured four pillars as the drivers for the post-Covid
recovery: (i) Sustainable Finance and Financial Inclusion (ii) Infrastructure Financing, (iii) Growth Engines and (iv) Global Regulatory Environment.
Governments and Multilateral Development Banks could consider creating investment-ready pipelines of projects to facilitate the participation of private
institutional investors in urban and suburban regeneration investments, focused in particular on increasing infrastructure resilience and improving access toaffordable healthcare and transport; this would speed up the ability of investors
to make capital allocation choices that support the transition to a sustainableeconomy.
Global financial regulation should take into account the impact of the pandemic crisis on prudential reforms, aiming at increasing regulatory coherence,transparency and accountability and to ensure resiliency from systemic risks.
Adriano Olivetti, an historic Italian entrepreneur, wrote “within me there is only
the future”, and with this spirit, and in line with the overall commitment of theB20, the Finance & Infrastructure Taskforce has aimed at conveying actionable
and impactful recommendations to contribute to shape a brighter future together.
Sincerely,
Carlo Messina

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Task Force Composition
Task Force Leadership

Timothy Adams

Co-ChairPresident & CEO, Instituteof International FinanceSujoy Bose

Co-ChairManaging Director & CEO,National Investment
and Infrastructure Fund

Robert S. Kapito

Co-ChairPresident and Director,
Blackrock

John Denton

Co-ChairSecretary General,
International
Chamber of Commerce

Lubna Olayan

Co-Chair
Chair of the Executive
Committee,
Olayan Financing Company

Xiaolun Zhang

Co-Chair
Chairman, China National
Machinery Industry
Corporation

Why Finance & Infrastructure Matter"The recommendations of our Task
Force support the key priorities of the
Italian G20 Presidency and we hope
they will assist in efforts to build a betterand more sustainable global economy".
“Infrastructuredevelopment
andinnovative financing solutions acrossthe economic value-chain are going tobe crucial elements of policymakers’
playbook as countries plot their recovery
post pandemic.
Recommendations of this Task Forceprovide a set of actionable ideas to fostera sustainable and inclusive growth acrossthe globe”.
“The B20 recommendations represent
important progress on financial
resilience and sustainability, where global
collaboration is vital. We look forward tocontinuing the dialogue”.
“Business, finance and government can- and must - speed the transition to a
low carbon future.
The B20 shows how to get there throughinnovative finance and infrastructure
policies”.
“Our Task Force recommendations havecentered around building a sustainable
and resilient finance and infrastructure
ecosystem.
We bring forward practical steps tohelp foster inclusion, support SMEs andembrace ESG - all whilst driving theCovid-19 recovery. It is what our future
generations need and deserve”.
“B20 focus on offering pragmatic
solutions to improve global financeand infrastructure, which may boost
employment and improve people's life,
is crucial for a more robust economic
recovery after the Covid-19 pandemic”.

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Task Force Coordination Group
Knowledge Partner

Scientific Partners

Raffaello Ruggieri

Deputy ChairGroup Chief Lending Officer,
Intesa Sanpaolo

Network Partners

Francesca Brunori

Task Force Manager
Financial Affairs Director,
Confindustria

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Recommendations: Executive Summary
Recommendation 1: Sustainable Finance and Financial Inclusion - Promote
efforts to scale up sustainable finance and financial inclusion by supporting
the development of ESG and impact investing, accelerating the adoption of
global sustainability reporting and measurement standards and by fostering
access by individuals and micro businesses to affordable financial products
and services.
Policy Action 1.1: Policymakers should work towards the harmonization ofregulations, metrics and reporting standards of dedicated impact investments, including the development of impact measurement methodologies,
to ensure market integrity and enhance transparency. These efforts should
be aimed at capturing external impacts of investments with a clearly articulated impact objective in a manner than can contribute to improving investor
decision-making, with the aim of scaling up flows of capital towards impact
investment opportunities that can address pressing social and environmental challenges. MDBs and governments could provide incentives and otherfinancial mechanisms to encourage private sector investments, launch specialized impact funds to mobilize private savings toward impact investments
and support Public and Private frameworks for the adoption of results-based financing solutions.
Policy Action 1.2: The G20 should give a clear mandate to international institutions to work towards the definition of common sustainable finance andcircular economy taxonomies and the alignment of ESG disclosure frameworks, ensuring consistent implementation. The G20 should support current initiatives to rationalize the global system for reporting sustainability-related
information and it should ask authorities involved in these efforts to develop
a harmonized global framework. In parallel, the G20 should encourage national governments to design mechanisms to support the transition of key
economic sectors toward sustainable models as well as a proportional implementation of ESG requirements by SMEs and unlisted firms.
Policy Action 1.3: The G20 should help to create the conditions to improvefinancial education and access to financial services, including insurance, tocurrently “unbanked” and “uninsured” individuals and facilitate the financingof micro businesses by supporting the introduction of new technologies, digital innovations and an enhanced use of data in the financial sector, thus
promoting financial inclusion.
Recommendation 2: Infrastructure Financing – Enhance infrastructure financing by incentivizing investments in sustainable infrastructure projects, implementing infrastructure as an asset class, supporting cross-border planning& investing, and by fostering projects of urban and suburban regeneration.
Policy Action 2.1: The G20 should help create ad-hoc and market-ready financial instruments to facilitate Public Private Partnerships (PPPs) for co-investments by institutional investors in sustainable infrastructure, while governments should promote “Smart Infrastructures” brought by technology
to improve environmental and economic sustainability and enable new services such as remote healthcare and smart mobility.
Policy Action 2.2: The G20 should help implement sustainable infrastructure
as an asset class and standardize its taxonomy, while regulators and policymakers should review the regulatory treatment of infrastructure finance toincentivize sustainable infrastructure investing and its long-term financing.

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Policy Action 2.3: The G20 should ask for the establishment of frameworks and platforms to facilitate international planning and joint cost-benefit
analysis to foster cross-border investments in large-scale infrastructure, while governments could facilitate the rollout of recovery measures to support
and accelerate infrastructure projects, which are crucial for a more robust
economic recovery after the Covid-19 pandemic.
Policy Action 2.4: Governments and MDBs should create investment-readyprojects to facilitate participation of private institutional investors in urban
and suburban regeneration investments, focused in particular on increasing
infrastructure resilience and improving access to affordable healthcare andtransport, while policymakers could improve regulations and request impact
reporting related to investments in these projects to accelerate the achievement of environmental and social priorities.
Recommendation 3: Growth Engines – Support sustainable economic
growth by fostering SMEs access to capital, promoting open innovation
ecosystems with customer data subject to common protections across sectors, accelerating digitalization and innovation processes in the financial sector, and by increasing the efficiency of Global Value Chains (GVCs) and, on amore regional level, of Integrated Value Chains.
Policy Action 3.1: The G20 should promote the development of frameworks
and policies to facilitate access by SMEs to debt and equity markets in orderto decrease their leverage and re-balance their funding sources, and the creation of specific growth funds to sustain SMEs that may have exhausted theirdebt capacity during the pandemic crisis, while policymakers could implement programs aimed at mobilizing private savings, also through institutional investors, to support the real economy.
Policy Action 3.2: Governments should promote Open Innovation and thecreation of ad-hoc ecosystems with customer data subject to common protections across sectors, also leveraging the role of early stage investors (e.g. Angel Investors, Venture Capital, etc.) to foster the creation of start-ups and tosupport their growth, while enhancing efficient innovation inside companies.
Policy Action 3.3: Policymakers should address barriers to the accelerationof the role played by technology and artificial intelligence in the financial sector in order to sustain its development, ensure that data are accessible to all
involved players and foster a level playing field across actors with due regard
to data protection standards, while governments should promote partnerships between financial institutions and tech companies to ensure the creation of innovative solutions especially in the cross-border payment sector.
Policy Action 3.4: The G20 should work on the development of comprehensive frameworks to strengthen Integrated and Global Value Chains, taking
into account “deglobalization” trends due to the Covid-19 pandemic, to improve their resilience, flexibility and sustainability, while governments could
support the digitalization and the use of data in supply chains to increase
efficiency and reduce bureaucracy.
Recommendation 4: Global Regulatory Environment – Review the financial sector regulatory framework to ensure that it can support economic resilience during, and recovery after, the Covid-19 crisis by addressing climate-change, systemic and pandemic risks, improving prudential measures and
NPL regulations, and by constructively reviewing non-bank financial sector’sregulation.

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Policy Action 4.1: The G20 should promote an appropriate policy environment to foster innovative solutions, also promoting the cooperation between Public and Private sectors in order to support the parties affected bycatastrophic events and reduce the economic burden of responses to catastrophes on public budgets.
Policy Action 4.2: Policymakers should continue a review of the existing prudential regulatory framework in the context of the experience through theCovid-19 pandemic, to assess to what extent it may affect the ability of financial services, including insurance, to support economic recovery and to
reduce the risk of procyclical effects, while the FSB should continue working
to reduce the fragmentation of financial regulations to support financial stability and economic growth and allow a consistent level of flexibility acrossfinancial markets.
Policy Action 4.3: The G20 should encourage banking regulatory authorities to review, in light of the Covid-19 crisis, the effectiveness of existing NPL
regulations to reduce the risk of forced classification as NPLs of loans to
viable businesses, temporarily under stress due to the pandemic. The G20
could also call for a higher standardization of these rules and for improved
framework / processes to manage unlikely-to-pay credits to maximize thechances of recovery / return to a Performing status.
Policy Action 4.4: The G20 should encourage policymakers to consider policy measures to continue enhancing the resilience of the NBFI sector, buildingon the work of the Financial Stability Board (FSB). This should be done undera holistic approach that identifies and addresses potential risks using an activities-based approach, while preserving and stimulating the contribution of
all market participants to recovery, transition and innovation.

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Recommendation 1: Sustainable Finance andFinancial Inclusion
Promote efforts to scale up sustainable finance and financial inclusion by
supporting the development of ESG and impact investing, accelerating the
adoption of global sustainability reporting and measurement standards andby fostering access by individuals and micro businesses to affordable financial products and services.
Policy Actions
1.1

Policymakers should work towards the harmonization of regulations,
metrics and reporting standards of dedicated impact investments, including the development of impact measurement methodologies, toensure market integrity and enhance transparency. These efforts should
be aimed at capturing external impacts of investments with a clearly articulated impact objective in a manner than can contribute to improving investor decision-making, with the aim of scaling up flows of capital
towards impact investment opportunities that can address pressing social and environmental challenges. MDBs and governments could provide incentives and other financial mechanisms to encourage private
sector investments, launch specialized impact funds to mobilize private
savings toward impact investments and support Public and Private frameworks for the adoption of results-based financing solutions.
ting public funds, undertaking public spending and accounting for funds
and audit results.

1.2 The G20 should give a clear mandate to international institutions towork towards the definition of common sustainable finance and circular
economy taxonomies and the alignment of ESG disclosure frameworks, ensuring consistent implementation. The G20 should support current initiatives to rationalize the global system for reporting sustainability-related information and it should ask authorities involved in these
efforts to develop a harmonized global framework. In parallel, the G20
should encourage national governments to design mechanisms to support the transition of key economic sectors toward sustainable models
as well as a proportional implementation of ESG requirements by SMEs
and unlisted firms.
1.3 The G20 should help to create the conditions to improve financial education and access to financial services, including insurance, to currently“unbanked” and “uninsured” individuals and facilitate the financing of
micro businesses by supporting the introduction of new technologies,
digital innovations and an enhanced use of data in the financial sector,
thus promoting financial inclusion.

SDG impacted
Recommendation embraces all 17 SDGs

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Context
Sustainable finance is generally referred to as the process of considering environmental, social and governance (ESG) factors when making lending / investment decisions, leading to increased longer-term capital allocations tosustainable economic activities and projects1. More specifically:• Environmental considerations may refer to climate change mitigation
and adaptation, as well as the environment more broadly, such as the preservation of biodiversity, pollution prevention and circular economy• Social considerations may refer to issues of equality, inclusiveness, labor
relations, investment in human capital and communities, as well as humanrights issues• Governance considerations may include management structures, employee relations and executive remuneration, as such issues play a fundamental role in ensuring the inclusion of social and environmental considerations in the decision-making process.
The financial services industry has an integral role in achieving broad sustainable development goals, among which for example carbon neutrality, as trillions of dollars will need to be intermediated through banks, capital markets,
insurance companies, private equity and other capital providers to financethis historic transition. Over the recent years, considerable attention has
been given to ESG criteria and investing, due in part to at least three factors:• Industry and academic studies suggest that ESG investing can, undercertain conditions, help improve risk management and potentially lead toattractive risk-adjusted returns; going forward, this could be supported by
the strong growth in investors’ interest for ESG-attentive companies but it
will require, as a key enabling factor, the availability to investors of reliable,comparable and consistent ESG information• A growing environmental, social and governance focus suggests that social values will increasingly influence investor and consumer choices• There is growing momentum for corporations and financial institutions
to move away from short-term perspectives of risk and return to betterreflect longer-term sustainability in investment performance (Exhibit 1).

1

OECD (2020): ESG Investing: Practices, Progress and Challenges

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Exhibit 1
Volumes in sustainable banking
and investing have been
growing double digit
over a number of years

Note: Value-based banks based on membership of Global Alliance for banking on values
Source: Global Alliance for banking on values membership. (http://www.gabv.org/the-community/members);
IMF Global Financial Stability Report, October 2019 - Sustainable FinanceHowever, it is important to note that sustainable investing exists within a broader spectrum of capital deployment based on financial and non-financial
returns. On one side of the spectrum, there is philanthropy, where donors
seek only social returns. On the other side of the spectrum, pure financial
investment is pursued to maximize value through financial returns based on
absolute or risk-adjusted measures of financial value. In between these two
extremes of the spectrum, lies Sustainable Investing which includes both ESG
inclusion / exclusion strategies and impact investments. ESG inclusion / exclusion strategies seek to reduce risk and avoid harm by including, as a metric in
the investment process, companies' impact on environmental, social and governance factors. This may result, for example, in divesting from businesses
and activities that are most harmful to the planet or society. Whilst "impact",
as a metric, is valuable for ESG investing, what we call "impact investment"
differs from ESG by i) proactively seeking opportunities that create positive
impact on people and the planet (a "do good" approach rather than a "dono harm" one), and by ii) rigorously measuring and managing that impact, asa way to maximize positive social and environmental outcomes. In line with
this, the Global Impact Investing Network (GIIN) defines impact investment
as "investments made with the intention to generate positive, measurablesocial and environmental impact alongside a financial return"2.
Impact investments are characterized by the presence of the impact variablein addition to the dimensions of risk and return. Therefore, this type of investment, although still representing a limited set of the total investments
market, is introducing a new paradigm based on a three-dimensional assessment (risk, return and impact) and the expectation is that, in the future, anassessment of the impact will be present for all types of investments.
Indeed, this growing importance of the impact considerations is also represented by the important growth in Assets under Management (AuM) related
to impact investments: GIIN estimates that over 1,720 organizations manage
USD 715 billion in impact investing AuM as of the end of 20193 versus USD
502 billion at April 2019. This 42% increase reflects both asset growth andan increase in the number of organizations that GIIN includes in its annual
estimate.

142

More information available here: https://thegiin.org/impact-investing/need-to-know/

3

GIIN (2020): Annual Impact Investor survey

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With reference to the broader universe of sustainable financing activities,
despite the recent positive momentum, investors still face significant hurdles.
In particular, the lack of standardized metrics and reporting frameworks forcompanies (i.e. issuers of securities) is an aspect that needs to be addressed.
Indeed, the IFRS Foundation has taken actions toward globally recognizedsustainability reporting standards to explain enterprise value creation; at thesame time there is still no unique globally recognized reporting framework
relating to companies’ sustainability disclosures; the lack of common standards clearly limits investors’ ability to draw comparisons across companies.
Many companies voluntarily disclose ESG information, such as climate-related risks and opportunities according to the TCFD framework. However,there are currently challenges in terms of comparability and consistency of
the information that is disclosed and challenges in choosing / reporting on
certain metrics. Indeed, the absence of clear and standardized disclosure
frameworks makes the ESG objectives of companies not always easy to understand and it has the risk of giving rise to examples of greenwashing. This
is why the G20 should support the initiatives to rationalize the global system
for reporting sustainability-related information and work towards a harmonized global framework.

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Policy action 1.1: Policymakers should work towards the harmonizationof regulations, metrics and reporting standards of dedicated impact investments, including the development of impact measurement methodologies, to ensure market integrity and enhance transparency. These
efforts should be aimed at capturing external impacts of investmentswith a clearly articulated impact objective in a manner than can contribute to improving investor decision-making, with the aim of scaling
up flows of capital towards impact investment opportunities that canaddress pressing social and environmental challenges. MDBs and governments could provide incentives and other financial mechanisms toencourage private sector investments, launch specialized impact funds
to mobilize private savings toward impact investments and support
Public and Private frameworks for the adoption of results-based financing solutions•

Mainstreaming Impact Investing

Impact investments are those made with an intention to generate positive,
measurable social and environmental impact alongside financial returns.
Therefore, impact investments can be seen as a further evolution comparedto the broader spectrum of Sustainable Investments. Far from being a nichewithin the wider investment industry, “impact” is increasingly becoming acentral part of mainstream finance as additional major investors (from private equity and Venture Capital to pension funds) are optimizing for the three
dimensions of risk, return and impact in all their capital allocation decisions(Exhibit 2). This evolution from the traditional two-dimensional approach istransforming the very nature of capitalism. Impact investing is also a powerful tool to raise awareness and address diversity, gender and inclusion issues,enhancing social inclusion. The B20 Special Initiative on Women’s Empowerment is addressing issues of gender equity and women’s empowerment at a
general level, applicable across much of the B20 workstreams.
Exhibit 1
Volumes in sustainable banking
and investing have been
growing double digit
over a number of years

Source: Bain & Company

In the understanding that they alone cannot cope with the growing social andenvironmental challenges facing our societies worldwide, governments havea crucial role to play in creating an adequate policy and regulatory environment to help increase the flows of private impact capital to businesses andprojects that aim to generate positive, measurable outcomes - thus acknowledging the key role of business and investment to build more inclusive andsustainable economies.
•

Transparency and Integrity

To ensure the integrity and transparency of impact investing (or conversely,
to avoid “impact-washing”) it is paramount that such investments have con16

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sistent and comparable reporting frameworks, that enable the disclosure ofdata explaining the business’ impact on the people and the planet.
To enable and to mainstream impact measurement and management, companies and investors need coherent guidelines on how to measure, report,
compare and improve impact. Providing the system with a harmonized andsimplified approach to standards, reporting requirements and transparency
would facilitate businesses to attract the flows of private capital to help tackle some of the most pressing challenges facing our societies.
Currently, impact reporting by companies is often missing or not comparable
across different companies, resulting in confusion, uncertainty and it is notachieving the key objective of reporting which is to overcome informational
asymmetries in the market.
Globally there are initiatives underway to support consensus-building among
the existing impact reporting organizations. For example, through the workof the Impact Management Project⁴, five global organizations whose work
guides the majority of sustainability and integrated reporting, announced ashared vision⁵ of what is needed for progress towards comprehensive corporate reporting and the intent to work together to achieve it.
Harmonized reporting, including SDG impact standards under development
by UNDP⁶, would provide the transparency needed for investors and would
result in impact being measured and represented alongside financial reporting. For this reason, the G20 should define a roadmap for the developmentof a standard reporting framework and related metrics, to be adopted at
global level, specific for impact investing activities (which represents a different requirement versus the one put forward in Policy Action 1.2 with respect
to ESG reporting standards for companies) in order to support investors’
engagement which could, in turn, accelerate the achievement of United Nations Sustainable Development Goals.
Amongst other relevant efforts to foster greater impact transparency, theImpact-Weighted Accounts Initiative (IWAI)⁷, led by the Harvard Business
School, is working to drive the creation of financial accounts that reflect acompany’s financial, social, and environmental performance - with the ambition of creating “accounting statements that transparently capture external impacts in a way that drives investor and managerial decision making”.
Governments can support such initiatives, signaling the need for harmonizedreporting in order to facilitate the disclosure from companies on what is material to both the enterprise and the society and to maintain the fundamental integrity and transparency of impact investments⁸.
•

Use of Public FinancePublic institutions – including central banks, governments and MDBs – canalso play a “catalytic” role in leveraging private capital, by supporting the launch of dedicated impact funds and other financial vehicles aimed at scaling
private capital for public good9.
4More information available here: https://impactmanagementproject.com/

CDP, CDSB, GRI, IIRC and SASB (2021): Reporting on enterprise value Illustrated with a prototype
climate-related financial disclosure standard
5

6

https://sdgimpact.undp.org/practice-standards.html

7More information available here: https://www.hbs.edu/impact-weghted-accounts/Pages/default.aspx

8Some jurisdictions are proposing mandated reporting - e.g. United Kingdom mandated TCFD reporting.

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GSG – UNESCAP (2020):Towards an Enabling Policy Environment for Impact Investment in Asia and the Pacific17

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This can be achieved by investing directly in impact capital vehicles or by providing first loss guarantees on impact loans and investments underwritten byfinancial intermediaries.
There are various mechanisms that governments are using to provide muchneeded capital to “impact enterprises”, including wholesaler impact funds.
Impact capital wholesalers invest in funds and other intermediaries that support impact enterprises as well as in the enterprises themselves. The wholesaler also seeks to catalyze investments from elsewhere such as foundations,private investors and other institutional investors. To this end, wholesalers
provide catalytic capital, defined as debt, equity, guarantees and other investments that accept unknown, mispriced, disproportionate risk and/or
catalytic or concessionary returns relative to a conventional investment, inorder to generate positive impact and enable third-party investment that
otherwise would not be possible.
For example, India designed a program that provides Viability Gap Funding(VGF) support to private investors for impact investments through PPPs.
VGF is a one-time financial support that private investors are eligible to get
to partially finance capex for creating impact infrastructure. VGF is a grant(as opposed to a loan or an equity contribution) given with an objective to
make the impact intervention financially viable and is normally financed by
the Government’s budgetary resources. The G20 could consider the possibility of exploring VGF as a model to implement those impact PPPs where
project feasibility is a challenge for private players.
The UK government created legislation permitting dormant bank accounts tobe transferred to social benefit uses, with a reclaim fund to respond to any customers reconnected to their funds. The uses included the first wholesale impact investment fund, Big Society Capital¹⁰, which has used £425m of dormant
accounts raising £200m from banks and bringing in £1400m from co-investors into multiple social benefit areas. This model has been repeated in Japan, Korea and Portugal, also through funds allotted by the European Investment Fund¹¹, with Canada and Australia expected to follow, and several othercountries in the pipeline. Providing a wholesale impact fund creates confidence in the market and in intermediary investors, and brings in additional private
funds, and it generates market information and product development.
Having a wholesale impact fund also provides capacity in crises, such as theone triggered by Covid-19. Several countries have placed funds to provide
liquidity in the Covid-19 crisis to avoid insolvencies. In the UK, government
funds were combined with Big Society Capital funds to provide liquidity tosocial enterprises and non-profit activities. Having a relevant and agile wholesaler allowed for a rapid and effective response.
Additionally, as major commissioners of goods and services, governments
could increasingly adopt results-based financing (RBF)¹² solutions in a coreevolutionary step to foster impact-driven economies.¹³ RBF programs are an
evolution from traditional government programs and interventions focusing
on the achievement of measurable outcomes (such as job placements, retention, and increased wages/income).
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More information available here: https://bigsocietycapital.com/

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EIF: Social Impact Accelerator

12

GSG (2021): Tying Funding to Results: A Primer in Results-Based Financing

RBF solutions include Performance-Based Contracts (PBC), Outcomes Funds, Social and Development Impact
Bonds (SIBs and DIBs), Pay by Results schemes
13

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Under these mechanisms, the principal establishes financial or other incentives for an agent to deliver predefined outcomes, and then rewards the achievement of these results upon verification.
This type of approach seeks to help governments improve the effectivenessof delivery systems and specific interventions. In some cases, RBF schemes
can generate cost-savings for governments by ensuring that funds are spent
only if the results are achieved. They can also help attract private capital tofund social and environmental outcomes, promoting virtuous partnerships
between the public sector and other stakeholders. Amongst other benefits, such vehicles can help promote stronger performance management,
enabling constant improvement of programs.
Moreover, financial intermediaries have a role to play, also by offering a wide
spectrum of impact bankable products and helping increase the flows of private impact capital to businesses and projects that aim to generate positive,
measurable outcomes.
Furthermore, in order to facilitate the role of the financial sector in the development of impact financing, regulators could create adequate policies
and a regulatory environment to allow financial institutions to provide longterm/patient capital, yielding low rates, for purpose-driven enterprises andprojects aimed at achieving valuable social returns. More specifically, global standard setting bodies for financial institutions could evaluate, basedon evidenced risk grounds, the introduction of impact investing supporting
factors, which are measures to allow long-term impact investments with reduced balance sheet exposure and capital absorption. For example, it shouldbe evaluated whether impact bank loans for micro enterprises and unbanked
counterparties as well as financing of impact investment in fields such as health, education, research could be excluded from the IFRS9 application.
In Europe this type of approach was first proposed in 2017 within the review of the Capital Requirements Regulation, which was modified assigninga mandate to the European Banking Authority¹⁴ to assess, by June 2025,
whether a dedicated prudential treatment of exposures related to assets oractivities with environmental and/or social objectives would be justified (as acomponent of Pillar 1 capital requirements).
Successful examples of the role of governments and MDBs in promoting impact investing can be found in East Africa and South Asia, in countries suchas Kenya, India and Bangladesh. Although the majority of impact capital inthese countries is financed by development banks, these countries have also
adapted their ecosystems to attract other impact investors and to encourage the use of innovative investing vehicles such as quasi-equity structures.
Taking the example of Kenya, the creation of a supportive ecosystem wasmade possible thanks to a welcoming regulatory climate for foreign impact
investors, the local presence of these investors across the country and numerous organizations to support impact investments (e.g. Incubators, Consultants etc.)¹⁵. Therefore, we recommend that governments focus on thesebest-in-class ecosystems, by scaling and replicating them, when attempting
to promote impact investing in their country.

¹⁴ CRR Article 501c
¹⁵ Global Impact Investing Network (2015): The landscape for impact investing in East Africa

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Finally, because of the economic crisis generated by the COVID 19 pandemic
special focus should be given to SMEs that are at risk of becoming overindebted. In the current regulatory environment, they risk being excluded fromthe financial system, losing their real estate assets because of their inability
to pay their mortgages, thus leaving them trapped in a spiral of poverty.
The introduction of new or revisited financial instruments, such as social
securitizations in Italy, could represent a convenient solution. In practice, avehicle company buys the credits and the real estate property from the banks
that have financed SMEs and households through mortgages; to finance theacquisition the company issues bonds with a social purpose to the market;
households and SMEs can retain the right to occupy and use the real estate
asset by paying the company, owner of the asset, a rent and eventually havethe right to buy back the asset.

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B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Policy Action 1.2: The G20 should give a clear mandate to international
institutions to work towards the definition of common sustainable finance and circular economy taxonomies and the alignment of ESG disclosure frameworks, ensuring consistent implementation. The G20
should support current initiatives to rationalize the global system forreporting sustainability-related information and it should ask authorities involved in these efforts to develop a harmonized global framework. In parallel, the G20 should encourage national governments
to design mechanisms to support the transition of key economic sectors toward sustainable models as well as a proportional implementation of ESG requirements by SMEs and unlisted firms•

Definition of ESG taxonomies and alignment of disclosure frameworks

ESG risks pose significant challenges for the global economy as well as thefinancial services industry and may in turn affect financial stability. The financial services industry plays a critical role in helping to mitigate potential
ESG-related risks, through capital allocation, corporate engagement, financial intermediation, risk transfer and insurance, in order to help transformrisks (and responses to them) into opportunities.
Sustainability is increasingly becoming a crucial consideration when investing.
This includes the degree of sustainability of an investment through the assessment of its ESG risks. In particular, ESG risks can affect the financial value ofthe investment itself or can materialize externally as a result of the investment.
Taxonomies and reporting standards can help to both assess the sustainability of an investment and increase transparency of both sustainability factors and ESG risks. Within this context, while the proliferation of multiple
voluntary disclosure and reporting frameworks has stimulated innovation, it
has also resulted in a diverse array of standards, frameworks and indicators.
Therefore, it is time to establish a global baseline on common terms, metrics and reporting frameworks in order to guarantee a holistic and consistent
approach on all ESG components (and not only on environmental aspects).
In this respect, the B20 welcomes the agreement reached by the G7, also acknowledged by IOSCO, on the need for a baseline global reporting standard
for sustainability, which jurisdictions can further supplement, that answers
investors needs for high quality, comparable and reliable information on climate risks, and that addresses the growing demand for more information on
the impact that firms have on the climate and the environment¹⁶.
To accelerate progresses and facilitate sustainable finance, it is essential toseek international alignment in sustainable finance taxonomies, policy andreporting standards¹⁷. Indeed, ensuring harmonization of ESG standards andtaxonomies (including those referred to circular economy), as well as theavailability of reliable ESG data and metrics, can foster sustainable financegiven the reliance by financial institutions on corporate disclosures in order
to assess ESG risks and opportunities.
In order to successfully transition from the current multiple frameworks towards a globally harmonized ESG disclosure framework, which in time
would be consistently implemented, three key principles have to be met. First,
the standard setter should be empowered on both financial and non-financial
corporations. Second, the standard setter should have a sound and balanced
governance across jurisdictions, including developed and emerging economies. Third, there should be a clear commitment by all jurisdictions to abide by the future global standards as a baseline, with the potential to require
additional disclosure as necessary to meet their own public policy objectives.

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For these reasons, the G20 should ask international institutions to work
towards the definition of common sustainable finance / circular economy
taxonomies, the alignment of ESG disclosure frameworks, supported by aglobal set of sustainability reporting standards, and their consistent implementation across jurisdictions. In this context, the B20 welcomes the G20’s
request, included in its April 7th 2021 Communiqué¹⁸, for the FSB to work on
evaluating the availability of data and data gaps on climate-related financial stability risks and on ways to improve climate-related financial disclosures. The B20 notes the upcoming initiative by the IFRS Foundation, also
acknowledged by the G7, to rationalize and ensure convergence across jurisdictions creating a dedicated International Sustainability Standards Board(ISSB) to develop a baseline set of reporting standards under robust governance and public oversight, built from the TCFD framework and the workof sustainability standard-setters, involving them and a wider range of stakeholders closely to foster global best practice and accelerate convergence. It also recommends establishing an appropriate mechanism which would
help governments to ensure consistent cross-border implementation of those standards. The B20 fully agrees with the G20 on the importance of promoting globally consistent, comparable high-quality standards of disclosure
for sustainability reporting, building on the recommendations of the FSB’s
Task Force on Climate-related Financial Disclosures (TCFD). The B20 welcomes the re-establishment of the G20 Sustainable Finance Working Group(SFWG), and its mandate to develop, in 2021, a roadmap aimed at improving
sustainability reporting, identifying sustainable investments, and aligning the
public and private financial system efforts with the Paris Agreement. In orderto accelerate progress and given the momentum created by the upcoming
COP26, these efforts should leverage the current most advanced initiatives
such as the work of the International Platform on Sustainable Finance (IPSF)
and the OECD, with a view to tightening the necessary definitions in orderto ensure global comparability. With specific reference to carbon neutrality,
multiple global initiatives have already been launched: for example the Glasgow Financial Alliance for Net Zero (over 160 firms responsible for assets inexcess of USD 70 trillion) which brings together the Net Zero Asset Managers
Initiative (87 members with USD 37 trillion AuM), the Net-Zero Asset Owner
Alliance (58 asset owners with USD 7.4 trillion in assets), and the Net Zero
Banking Alliance (43 banks with USD 28.5 trillion in assets). Clear and consistent definitions are required to support transparency, comparability andmonitoring of such major global initiatives.
The European Commission is making substantial progresses toward a broadand comprehensive Environmental taxonomy and it is currently working on
the development of a Social taxonomy, since, just as for the “green” transition, a lack of definitions and of a standardized classification system would
represent an obstacle to steering capital towards socially sustainable activities. At a global level, the International Platform on Sustainable Finance(IPSF) is currently developing a ‘Common Ground Taxonomy Report’ by October 2021 to enhance transparency about what is commonly green in IPSF
member countries. This analysis could serve as the basis for discussion within
the re-established G20 Sustainable Finance Study Group, as a steppingstone
towards further development at the global level by global standard setting
bodies.

G7 Finance Ministers and Central Bank Governors’ Communiqué, 5 June 2021; IOSCO, Report on Sustainability-related Issuer Disclosures (June 2021)
16

This is also recommended by the B20 Action Council on Sustainability & Global Emergencies and by the B20
Task Forces Energy & Resources Efficiency and Integrity & Compliance (2021).
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Italian G20 Presidency, Second G20 Finance Ministers and Central Bank Governors meeting Communiqué 7
April 2021
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Future globally harmonized ESG disclosure standards should take into account the characteristics of companies as well as take into consideration thespecificities of developing countries. For example, with reference to companies the disclosure standards should consider the following:• Listed and unlisted companies of sizeable dimensions (e.g. in terms of revenues or assets): they could envisage the adoption of the TCFD framework(Task Force on Climate-related Financial Disclosures) in order to encouragecompanies to increase their focus on climate-related risk and opportunities• Other unlisted companies: they could envisage the adoption of virtuous
ESG behaviors such as the adoption of voluntary “ESG-adherence reporting
standards”, while avoiding potential “disclosure arbitrages"• Small and medium-sized enterprises: they could take into account thegreater complexity of implementing ESG behaviors deriving from a smallerscale and the need to maintain the costs of reporting affordable, therefore,
they must introduce clear principles of proportionality and progressivity.
In addition, further measures could be considered that would increase theavailability of relevant ESG data for companies of different sizes, such as datapooling or the development of centralized databases with the most relevant,core ESG metrics. This would provide investors with appropriate information
within the decision making process allowing them to comply with sustainability related legislation and could reduce operational and reporting costs
for companies, in particular for SMEs, and promote further comparability
among companies.
•

Mechanisms to support ESG transition

Prudential authorities and supervisors of both banks and insurance companies should support the transition to a more sustainable economy by focusing
on safety and soundness of financial institutions (microprudential lens) andfinancial stability (macroprudential lens) in light of ESG risks. Supervisory engagement, risk management frameworks, disclosure standards, and supervisory scenario analysis exercises could become valuable tools for supervisors to address ESG risks. Ideally, the prudential response would catalyze andenable enhanced financial industry responses to ESG risks and opportunities.
Moreover, in order to encourage the adoption of ESG principles, governments should:• Support business during ESG transition by reducing the costs of aligning
their business and operating models to these principles, for example designing incentives to support the sustainability transformation of SMEs
• Promote ESG reporting to the companies at the head of value chains, asthese have a crucial role in influencing the other businesses that alignment to
ESG standards and subsequent reporting are possible•

Provide practical examples on how to complete this ESG transition• Simplify regulations as much as possible and ensure that new regulations
become fully enforceable only when the economic environment allows it• Facilitate the role of the financial sector as an enabler of the sustainability transition of companies, e.g. possibly fostering long-term financing ofsustainable projects by revising the application of IFRS 9 accounting rules (asproposed in the Policy Action 1.1)
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B20 POLICY PAPER FINANCE & INFRASTRUCTURE• Issue green sovereign bonds and take into consideration their social
co-benefits to finance a sustainable post Covid-19 crisis recovery. For example, the Green+ Gilt, which is being proposed in UK, provides that proceedsof such sovereign issuance could be directed towards green projects, with
the novel feature that financed projects would consciously deliver social
co-benefits, to be measured with well-defined social metrics.

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Policy Action 1.3: The G20 should help to create the conditions to improve financial education and access to financial services, including
insurance, to currently “unbanked” and “uninsured” individuals andfacilitate the financing of micro businesses by supporting the introduction of new technologies, digital innovations and an enhanced useof data in the financial sector, thus promoting financial inclusion
Accelerating financial inclusion is a key enabler for reducing poverty, boosting prosperity and reaching the SDGs. However, in order to promote accessfor individuals and micro-enterprises to affordable financial products andservices, it is necessary to act on two different aspects:•

develop financial education•

facilitate access to affordable financial products and services.

Starting from the first point, without a human capital / workforce that isfinancially literate in the matters of personal finances and money management, financial inclusion can only be partially achieved. Empirically founded
research studies have endorsed financial literacy education programs as away for migrating out of poverty, however for the financially vulnerable andlow-income families these programs are mostly unsuccessful and unsuitable¹⁹. It is of utmost importance that financial literacy education intentionally targets environments of low education and income²⁰ since these havebeen associated with inadequate financial knowledge and unsound financial
decisions²¹. In fact, financial education, on one hand, allows people to understand their financial needs and the relative degree of risk, preventing dangerous behavior (e.g. excessive indebtedness); on the other, financial education
gives people the necessary skills to recognize the benefits of financial services(e.g. savings products, insurance coverage, etc.) as well as to gain awarenessof the warning signs of possible financial frauds. Therefore, fostering the financial literacy of individuals on a global scale, with particular focus on boosting women’s financial literacy and confidence²², can be considered as thefirst step to achieve financial inclusion.
Examples of programs aimed at increasing financial literacy and access toinsurance protection are: in Mexico, the “Proyecto Minerva”²³, which is a financial education project with a gender perspective jointly developed by
the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF) and the private insurance sector; in Bolivia, the“Proyecto Seguros Inclusivos“ launched by the Bolivian association of insurers
and the PROFIN Foundation to promote financial education in insurance, development of inclusive insurance, and commercialization of microinsurance
especially for women entrepreneurs²⁴. In developing financial education programs, it is necessary to consider the different levels or phases to educating
financial literacy. It is thus imperative that the developed curriculum is tailor-made for the target audience.

According to Engelbrecht, (2008), this may be a result of insufficient access to information or inferior standardsof formal education.
19

Most financial education programs that are financial product-oriented tend to target credit facilities available
to the financially viable segments of society.
20

21

Studies by Clancy, Grinstein-Weiss & Schreiner (2001); Finmark Trust (2004); Lusardi & Mitchell (2006)

According to The Fearless Woman: Financial literacy and stock market participation paper (2021), a lack of a confidence scares some women away from the stock market, hampering their ability to build wealth. These findings mean
that, to improve women’s financial well-being, it is important to boost both financial literacy and confidence. On
women’s literacy and skills, see also the Policy Paper of the B20 Special Initiative on Women Empowerment (2021).
22

23

https://minervaeducacionfinanciera.mx/

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https://fundacion-profin.org/nuestros-proyectos/proyecto-seguros-inclusivos/

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With respect to the second point on access to financial products and services, in recent years technological development and innovative technologies
have allowed financial institutions to spot untapped opportunities while facilitating access to financial products and services, also for unserved or underserved populations.
Indeed, the use of digital innovation can accelerate individual financial inclusion and foster micro businesses access to capital. For example, the use ofFintech and alternative data to provide credit and insurance products andservices to micro businesses and to underserved individuals represents oneof the multiple benefits of digital innovation to facilitate financial inclusion.
Blue Marble Microinsurance²⁵ represents a concrete example of how the insurance sector is using technology to reach uninsured populations. Blue Marble Microinsurance, a consortium of eight insurance companies, operates asocial enterprise with the purpose of extending insurance protection to theemerging middle class. Blue Marble incubates and implements microinsurance ventures - for example data hubs or mobile technology - that can beextended around the world, making it financially viable to reach consumers
in smaller or less-developed markets.
Fintech solutions can also significantly help women, which are particularly disadvantaged in the access to financial services, with more than 1 billion women still not using or not having access to the financial system²⁶, further undermining women’s professional opportunities and financial self-sufficiency²⁷.
At the same time, artificial intelligence algorithms could provide an opportunity to develop innovative (i.e. also based on “non-traditional” data) credit
scoring models for microbusinesses, the output of which could represent a
standardized credit score used across banks. The developments in these credit scoring models can help close the $5.2 trillion finance gap for Micro, Smalland Medium Enterprises (MSMEs) in developing countries, and particularly support female-owned businesses, that despite their lower number andsmaller average size represent 32% of this financing gap²⁸.
Besides, artificial intelligence algorithms could provide opportunities to develop innovative insurance products and services that address the needs of
MSMEs in an accessible and affordable manner. Parametric products thatprovide for rapid payout upon a predefined triggering event that is based ona measurable index (e.g. seismic index) are examples of innovative insurance
products that have addressed the needs of previously unserved or underserved MSMEs in an accessible and affordable manner.
Some countries, like India and Kenya, had impressive results in terms of financial inclusion from strategies focused on the digitalization of financial
services. In particular, India has implemented the world’s largest financial inclusion program using India Stack. India Stack is a set of digital applications
that provides a digital infrastructure to implement presence-less, paper-less,cash-less and digitally verifiable architecture for financial transactions. The
creation of India Stack has triggered technology driven innovations in India’s
fintech industry.
24

https://fundacion-profin.org/nuestros-proyectos/proyecto-seguros-inclusivos/

25

https://bluemarblemicro.com/

26

World Bank (2017): The Global Findex

According to the International Finance Corporation report “Mainstreaming Gender and Targeting Women in
Inclusive Insurance: Perspectives and Emerging Lessons“ (2017), greater inclusion of women in the economy could
increase GDP by between 2% and 3.5%.
27

28

26

International Finance Corporation (2017): MSME finance Gap

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

As a result, currently more than 80% of adults in both India and Kenya possessa bank account²⁹. Therefore, we recommend that MDBs and Governments
focus on these best-in-class strategies, by scaling and replicating them, whenattempting to foster financial inclusion in other developing countries.
Important innovations also occurred in the insurance sector. The so-called
Insurtech has allowed access to insurance and self-funded retirement products for longevity and morbidity that were unimaginable just years ago. Inclusive insurance and risk financing in different ways not only protect lives,
livelihoods and homes from the impact of disasters, but they foster financial
inclusion also through a variety of coverages, such as health insurance and insurance against the loss of employment / income, that are both fundamental
to enable upward social mobility for disadvantaged individuals.
In the insurance sector, the Access to Insurance Initiative (A2ii), the implementation arm of the International Association for Insurance Supervisors (IAIS) on
inclusive insurance, is leading the way in raising awareness and establishing thebaseline of gender inequity in insurance and building capacity within authorities to address the protection gap and create an enabling policy and regulatory environment to support more inclusive and sustainable economies. It istherefore key for policymakers to ensure insurance companies are able to offer long-term, collective pension products. These products can help citizens,
including those (mainly women) who spend long periods of their working life
in unremunerated work, to build a satisfactory level of retirement income. At
the same time, addressing the gender pension gap will require policymakers
to ensure that women are in a position to combine their professional and personal lives, for example by ensuring the availability of childcare services andthe introduction of flexible working conditions³⁰.
Finally, although Covid-19 has helped in the digitalization process, it is also
important to note that it has made SMEs more vulnerable and over-indebted. Therefore, with a view to fostering financial inclusion, financial andfiscal regulation should help introduce financial instruments in order to support these businesses, as described in the Policy Action 3.1.
The B20 welcomes the support expressed by the G20³¹ to the Global Partnership for Financial Inclusion’s (GPFI) efforts to identify and address the gaps
in financial inclusion that may have widened during the Covid-19 crisis, especially for the most vulnerable and underserved, as well as for micro, small andmedium-sized enterprises and the G20’s encouragement to GPFI to formulate a menu of policy options to help guide the appropriate response.

29

Ibid.

These issues are also addressed in the Policy Paper of the B20 Special Initiative on Women Empowerment(2021).
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Italian G20 Presidency, Second G20 Finance Ministers and Central Bank Governors meeting Communiqué
7 April 2021
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Recommendation 2: Infrastructure Financing
Enhance infrastructure financing by incentivizing investments in sustainableinfrastructure projects, implementing infrastructure as an asset class, supporting cross-border planning & investing, and by fostering projects of urban
and suburban regeneration.
Policy Actions
2.1 The G20 should help create ad-hoc and market-ready financial instruments to facilitate Public Private Partnerships (PPPs) for co-investments
by institutional investors in sustainable infrastructure, while governments should promote “Smart Infrastructures” brought by tecnology to improve environmental and economic sustainability and enable new services such as remote healthcare and smart mobility.
2.2 The G20 should help implement sustainable infrastructure as an asset
class and standardize its taxonomy, while regulators and policymakers
should review the regulatory treatment of infrastructure finance to incentivize sustainable infrastructure investing and its long-term financing.
2.3 The G20 should ask for the establishment of frameworks and platforms
to facilitate international planning and joint cost-benefit analysis to foster cross-border investments in large-scale infrastructure, while governments could facilitate the rollout of recovery measures to support andaccelerate infrastructure projects, which are crucial for a more robust
economic recovery after the Covid-19 pandemic.
2.4 Governments and MDBs should create investment-ready projects tofacilitate participation of private institutional investors in urban andsuburban regeneration investments, focused in particular on increasing
infrastructure resilience and improving access to affordable healthcare
and transport, while policymakers could improve regulations and request impact reporting related to investments in these projects to accelerate the achievement of environmental and social priorities.

SDG impacted28

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Context
Infrastructure investment needs to be substantially increased in order tomeet social needs and support the economic recovery after the Covid-19
pandemic. Indeed, the OECD indicates that around USD 6.3 trillion of infrastructure investment is needed each year to 2030 to meet development goals, increasing to USD 6.9 trillion a year to make this investment compatible
with the goals of the Paris Agreement³².
However, there is a widespread consensus that governments alone cannot
afford to bridge these growing infrastructure gaps and, although many institutions have been engaged in mobilizing finance towards sustainable infrastructure, there is still a consistent investment gap. Indeed, the annual
shortfall in sustainable infrastructure investment between now and 2030
has been estimated to USD 3 trillion³³ highlighting the necessity to bring in
new capital flows to close the gap between the required investments and theavailable capital.
Addressing the infrastructure deficit and ensuring sustainability and qualityof infrastructure investments have become even more important as a resultof climate change. Rising sea levels, more frequent and extreme weather
events, and increasing global temperatures can have lasting, damaging effects on existing and planned core infrastructure³⁴.
Indeed, sustainable infrastructure, defined as infrastructure that is socially, economically, and environmentally sustainable throughout its entire lifecycle³⁵, is a key driver of economic growth and social progress and a criticalenabler to achieving the SDGs and Paris Agreement commitments³⁶. Therefore, it is essential to take all possible actions to promote the spread ofsustainable infrastructure.
However, four challenges must be addressed to increase sustainable infrastructure investment and support its development:• Limited participation of the private sector in sustainable infrastructure investments due to the scarcity of attractive projects: The generation of
investable projects involving renewable power, green transport, sustainable
water and waste, and green buildings is expanding but remains inadequate
and sub-scale in the developing world. Financing of infrastructure projects
is limited and lacking sufficient investment from the private sector³⁷ . Indeed,
private sector participation in infrastructure can help reduce pressure on public finances and increase the portfolio of projects in the public sector investment program. However, in recent years, the private sector - including banks
and institutional investors such as insurers, pension funds and asset managers - has raised significant concerns over the limited availability of attractive
suitable infrastructure assets to invest in. Enhancing the availability of theseassets would consequently trigger a flow of private sector investments.

32

OECD (2017) Investing in Climate, Investing in Growth, OECD Publishing, Paris,

More information available here: https://www.hsbc.com/insight/topics/how-to-drive-investment-in-sustainable infrastructure
33

34

SWISS Re Institute (2021): Closing the Infrastructure Gap

35

Inter-American Development Bank (2018): What is Sustainable Infrastructure?

36

On this issue see also the Policy Paper of the B20 Task Force Energy & Resource Efficiency (2021)

More information available here: https://www.weforum.org/agenda/2020/09/how-to-drive-investment-into-sustainable infrastructure/37

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B20 POLICY PAPER FINANCE & INFRASTRUCTURE• Absence of sustainable infrastructure as an asset class: In order toachieve a transition toward sustainability, a huge amount of capitals must be
mobilized from both public and private sources. Indeed, institutional investors could invest in sustainable infrastructure, which can offer stable, longterm returns. However, there is currently no way for them to verify which assets are genuinely sustainable. Therefore, it is necessary to act on the taxonomy and on the standards to support sustainable infrastructure investing.
• Limited cross-border investments in infrastructure: Since there is a significant funding gap, it is important to identify the best available solution
among alternative infrastructural projects with similar benefits, thus reducing redundancies and optimizing the entire ecosystem with best resource
allocation and environmental-friendly effects. This aspect is particularly relevant in case of cross border investments, hence the establishment of frameworks and platforms to facilitate international planning and joint cost-benefit analysis represents one of the challenges to be addressed.
• Necessary regeneration of urban and suburban areas: Cities are home
to over half of the global population³⁸ and account for over 80% of global
GDP³⁹. As urban populations are expected to account for over 70% of theworld population by 2050, trillions of dollars will be needed to renew urban
and suburban infrastructure and to make it evolve toward sustainability. Moreover, the Covid-19 crisis forces us to imagine new categories and paradigms for our urban areas, where social inclusion, environmental protection anddigital innovation are all parts of the same process. Therefore, it is necessary
to promote the financing of urban and suburban regeneration, facilitating
participation of private institutional investors. Indeed, mobilization of private
capital, including institutional asset managers, will be key to deliver the regeneration of urban and suburban areas at the required quality and scale.

United Nations Department of Economic and Social Affairs, UNDESA (2018): World Urbanization Prospects:
The 2018 Revision
38

39

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UN-Habitat (2016): Urbanization and Development: Emerging Futures

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Policy Action 2.1: The G20 should help create ad-hoc and market-readyfinancial instruments to facilitate Public Private Partnerships (PPPs) for
co-investments by institutional investors in sustainable infrastructure,
while governments should promote “Smart Infrastructures” broughtby technology to improve environmental and economic sustainability
and enable new services such as remote healthcare and smart mobility
The necessity to promote the development of sustainable infrastructure andthe existing financing gap, make clear the need to promote public-private
partnership models to support the creation of dedicated financial vehicles
and co-investing platforms with public equity tranches and private equity
co-sponsorship, aimed at fostering sustainable infrastructure financing. Indeed, there are several reasons for the growing collaboration between the
public and private sectors in developing and providing infrastructure services, which include⁴⁰:•

Increased efficiency in project delivery, operation and management• Availability of additional resources to meet the growing needs of investment in the sector•

Access to advanced technology (both hardware and software).

Therefore, the use of public-private partnership models is able to mobilize
and aggregate a growing volume of private and public resources favoring therealization of massive infrastructure projects as well as the maintenance of
current infrastructure to bring it in line with current sustainability metrics.
It is essential to create dedicated, standardized and market-based solutions
to expand the financing of sustainable infrastructure and reduce information
gaps, for example through innovations aimed at encouraging the creation ofsustainable infrastructure also through platforms and co-investment tools.
The Green Growth Equity Fund (GGEF) set up by National Investment andInfrastructure Fund (NIIF), on behalf of the Indian Government and of theForeign, Commonwealth & Development Office of the UK Government, isan innovative collaborative model worth noting. This kind of initiative is an
example of the institutional collaboration model where large institutional
investors, come together as anchors to channel capital in order to achievecommon objectives.
Hence, we suggest evaluating every measure suitable to involve banking andinsurance systems in supporting infrastructural modernization and the completion of existing works. Indeed, the long-term nature of the global life andretirement insurance industry liabilities implies that these insurers are wellplaced to invest in infrastructure projects, which by their nature are longterm and illiquid.
The B20 calls on the G20 to take actions to promote and incentivize the priority involvement of institutional investors, including pension funds, insurancecompanies and asset managers, in order to allow the long term financing necessary for the development of strategic sustainable infrastructure.
To this regard, the political risk embedded in infrastructure projects is a significant factor impacting investors’ decision-making. It is therefore essential to mitigate this risk in order to ensure legal certainty and protection forinvestors and to preserve the financial appeal of sustainable infrastructure
investments.
40

More information available here: https://ppp.gov.sl/ppp-2/

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At the same time, actions must also be taken in order to create better transmission mechanisms to supply capital. In fact, some industries (e.g. utilities)
are characterized by a strong fragmentation of operators and by the presence of small-medium businesses, which do not reach critical mass for aneasy access to capital. In this context, it is useful that these mechanisms focus
on the areas where, according to investors, there is the greatest lack of ready-to-finance projects, such as thermal insulation (public buildings, homes
and offices), production of renewable electricity, electrification of public andpassenger vehicles, transformation of industrial processes and construction
techniques (steel; wood).
Finally, a range of sustainable infrastructure projects on a global scale is necessary to attract capital. Therefore, governments could partner with theprivate sector to create an effective portfolio of investable and sustainableinfrastructure projects, promoting "smart infrastructures" brought by technology to improve environmental and economic sustainability and enabling
new services (e.g. remote healthcare).

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Policy Action 2.2: The G20 should help implement sustainable infrastructure as an asset class and standardize its taxonomy, while regulators and policymakers should review the regulatory treatment of infrastructure finance to incentivize sustainable infrastructure investingand its long-term financing•

Implement sustainable infrastructure as an asset class

Transforming sustainable infrastructure into a mainstream asset class will
speed up the ability of investors to make capital allocation choices that support the transition to a sustainable economy. However, in order to implement
infrastructure as an asset class, it is necessary to have a clear and standardized taxonomy. In 2020, a first comprehensive definition of infrastructure as
an asset class has been provided by the EU CRRII Regulation.
In the meantime, some progress toward a definition of Sustainable Infrastructure has been realized by the Finance to Accelerate the Sustainable
Transition-Infrastructure initiative (FAST-Infra)⁴¹, which aims to establish aconsistent, globally applicable labelling system for investments in sustainableinfrastructure assets. Through this labelling system, the market can easily signal the sustainability of the asset, and investors can trust that their money isgoing to projects that meet environmental, social, resiliency, and governance needs and contribute to the SDGs. A sustainable infrastructure label will
ensure that governments and project developers embed high environmental, social, governance and resiliency standards into new infrastructure at
the design and pre-construction phases, on the grounds that only assets incorporating such standards will obtain the label. Although progresses in thetaxonomy field have been made, sustainable infrastructure requires further
advancements to be identified as an asset class.
In the establishment of infrastructure as an asset class, the 2018 Argentina
B20 Summit produced a successful roadmap, which has brought some concrete results over the past three years. Therefore, we believe this roadmap
should be used as a support to develop also Sustainable Infrastructure as
an asset class. In this context, we welcome the commitment by the G20⁴² todevelop a G20 Policy Agenda on infrastructure resilience and maintenance.
In particular, we support the progressing of the initiatives of the Global Infrastructure Hub and of the work related to the G20 Principles for Quality
Infrastructure Investment (QII).
•

Incentivize sustainable infrastructure investing and long-term financing

Furthermore, to support major structural works, it is also necessary to intervene at the regulatory level for both the financing and the implementing
aspects of infrastructure projects, focusing in particular on removing existing
regulatory barriers. As such consideration should be given to the simplification of legislative / regulatory frameworks, with the aim of eliminating obstacles to investments and creating more straightforward and effective legal,tax, governance and accounting structures – along with addressing efforts
to achieve contractual standardization across countries – in order to createhomogeneous conditions for competitiveness.

FAST-Infra is a public-private initiative to raise private investment in developing world sustainableinfrastructure, conceived in early 2020.

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Italian G20 Presidency, Second G20 Finance Ministers and Central Bank Governors meeting Communiqué
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From a prudential regulatory perspective, capital and liquidity requirements
which lead to the reduction of the size of financial institution balance sheets
have a disproportionate impact on long term assets, including infrastructure finance. As such, a continued review of certain aspects of the regulatory
reform framework would contribute to the goals of the G20 on improving
infrastructure financing availability by incentivizing investment in this areaof lending. This could be considered through an updated analysis of infrastructure finance over time via a revised FSB regulatory evaluation framework
which can provide recommendations on potential refinement or revision toregulatory standards where warranted. A simplification of the regulatory
framework should be considered with the aim of eliminating obstacles toinvestments and of creating a simpler more effective and rapidly implemented regulation in all countries in order to ensure homogeneous conditions ofcompetitiveness. This could also be reflected through the Basel Committee’s
own current workplan evaluating the impact and effectiveness of the post
financial crisis reforms⁴³.
In addition, policymakers could implement infrastructure supporting factors,
based on evidenced risk grounds, to incentivize sustainable infrastructure
investing and financing by banks and review regulatory accounting requirements like IFRS9 that can also disincentive long term credit. Consideringthat infrastructure financing requires long term investments and long-term
credit of (10-20+ years), IFRS9 framework penalizes the capacity of banks tofund infrastructure projects by increasing capital requirements and requiring
higher provisioning, proportional to the expected loss over the remaining lifeof the projects, in case of a deterioration in credit quality versus the time oforigination.
Along with addressing these issues, policymakers could also consider otheractions to incentivize sustainable infrastructure financing, such as:• Creating a securitization framework that could give investors access toportfolios of smaller size projects. In fact, securitization can be useful as it has
both the flexibility of bank loans and the “marketability” of financial assets inproviding finance to smaller sustainable and social infrastructure projects.
Within this framework, we recommend making the prudential treatment of
securitization commensurate with the risks and not punitive so that banks
can pool smaller scale projects to allow investors to invest in a broader rangeof assets.
• Creating the conditions for Governments and MDBs to guarantee banks’and insurance companies’ infrastructure investments. At present, these institutions are constrained from investing in infrastructure projects due to therisk characterizing some of these projects (i.e. those where investors / lenders
are exposed to the market risk associated with the project). Solving this issue
would free a large amount of liquidity to help foster the green revolution in
infrastructure and support its maintenance.
Additionally, with specific regard to insurance companies it has to be underlined that they could play a crucial role in the financing and insurance of resilient, sustainable infrastructure projects. Investments from insurers could
help fill the existing funding gap in the global infrastructure market and theprovision of insurance cover could incentivize investment by other institutional investors. However, to make insurance investments feasible, it is equallynecessary to work on the regulatory and supervisory frameworks in placeacross jurisdictions to provide for appropriate incentives for infrastructure
investments.
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For example, insurance supervisors could consider the merits of applying a
differentiated capital treatment for infrastructure investments. If capital requirements can be appropriately calibrated to reflect insurers’ ability to buy
and hold infrastructure assets over the long-term, this would free up capacity and would have the potential to increase insurers allocation to sustainableinfrastructure.
Finally, another key element to be considered to incentivize sustainable infrastructure investments is the creation of adequate investment capacity. In
practice, this means that regulators and policymakers should ensure that regulation does not stop insurers from offering well-designed and long-term
products to citizens. In the case of insurance companies, their ability to invest
in long-term assets, including infrastructure, is directly related to the premium inflow from long-term pension and savings products.
If citizens are saving enough through long-term savings products, this provides multiple benefits: they will have improved access to affordable pension
products and adequate retirement income, the governments can maintaintheir long-term budgets in check, and economic growth/recovery will bestrengthened by long-term investments, including infrastructure, facilitatedby insurers.
This is even more crucial given the fact that people are living longer and theexistence of a serious gender pension gap. For example, private pension savings could help increase the pension savings of those spending significant
time in unremunerated work (e.g. care provision) as private pensions are notconnected to labour market participation. There is available evidence that
demonstrates that private pension products in some countries have contributed to narrowing the gender pension gap (OECD)⁴⁴.

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OECD (2021) “Towards Improved Retirement Savings Outcomes for Women”

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Policy Action 2.3: The G20 should ask for the establishment of frameworks and platforms to facilitate international planning and joint
cost-benefit analysis to foster cross-border investments in large-scale
infrastructure, while governments could facilitate the rollout of recovery measures to support and accelerate infrastructure projects, which are crucial for a more robust economic recovery after the Covid-19
pandemic
In an increasingly connected world, an international cooperation, characterized by cross-border strategic planning, will be necessary in order to design and accomplish large projects in sectors such as construction, transport,
railways, roads, ports, airports, water networks, energy networks.
For example, the evolution and modernization of infrastructural networks(e.g. railways, motorways, …) can promote productivity, create wealth for thesystems involved and reduce environmental impacts using advanced technologies. Enhancing cooperation among countries in the field of infrastructureis necessary in order to guarantee the realization of large projects that resultin positive economic impacts on extensive regions. The energy infrastructure
sector is particularly reliant on cross-border cooperation, as projects tend
to exploit certain countries’ competitive advantages to overcome the geographical limitations of some others. An example of this is the Australia-ASEAN Power Link (AAPL), a vast plan to export energy, generated in one of thelargest solar farms worldwide, from Australia to Singapore and other Asian
countries.
Therefore, the B20 calls on the governments and MDBs to take action in order to:• Enhance collaboration among governments, by further encouraging theconcepts of openness and inclusiveness to foster sincere cooperation• Avoid redundant investments in substitute infrastructure (e.g. High-speed Railway and Highway road for the same routes)• Promote the development of a strategic cross-border planning adoption
through “cost benefit analysis” to identify the best available solution amongalternative infrastructural projects, thus reducing redundancies and optimizing the entire ecosystem with best resource allocation and environmentallyfriendly effects• Ease the roll-out of recovery measures to support infrastructure investments adapted to the most recent population habits• Leverage infrastructure assets monetization, as a self-financing mechanism, to liquidate finance for developing new assets. For example, in Australia,
the Australian Federal Government implemented the Asset Recycling Initiative (ARI) by working together with States and local territories to sell assets andreinvest the sale proceeds to fund new infrastructure. As part of ARI, the Federal Government provided some financial incentives to States and as a result
helped the creation of some large new infrastructure assets in the process• Provide local-currency, long-term and fixed-rate loans in emerging markets, as well as creating the conditions to scale these measures in the private
sector, in order to mitigate currency risks of infrastructure investments in foreign countries• Encourage the use of surety bonds in order to strengthen the financial resilience of infrastructure projects and attract investment.

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Policy Action 2.4: Governments and MDBs should create investment-ready projects to facilitate participation of private institutional
investors in urban and suburban regeneration investments, focused inparticular on increasing infrastructure resilience and improving accessto affordable healthcare and transport, while policymakers could improve regulations and request impact reporting related to investments in these projects to accelerate the achievement of environmental
and social priorities
Infrastructural planning aimed at urban and suburban regeneration is fundamental, also considering the changes in the socio-economic morphologyof the territories in response to the needs of decentralization and physicaldistancing imposed by the Covid-19 pandemic. Indeed, the pandemic hasbrought out the inadequacy of our development models, which have brought a progressive depopulation of inland areas in favor of a concentration of
housing in medium-large cities and industrial and commercial development
districts.
Joint actions by governments, MDBs and policymakers are therefore necessary to:•

Redevelop marginal local communities•

Facilitate the decongestion of large centers• Contribute to a green and digital transition and promoting marginalized
local communities inclusion• Improve the conditions of deprived urban neighborhoods and marginalized informal settlements in the global south.
In particular, governments and MDBs could:• Promote the financing of bankable and investment-ready urban andsuburban regeneration projects to achieve environmental and social priorities• Promote the financing of infrastructure resilience programs to preserveand strengthen existing infrastructure• Design frameworks for enabling access to affordable healthcare andtransport in urban and suburban areas, by leveraging private capital and technological interventions• Promote market participation of SMEs on regeneration projects by prioritizing smaller scale projects and supporting local businesses in having access to them
• Create ad-hoc financial vehicles dedicated to regeneration projects. For
example, the Global Steering Group for Impact Investment (GSG) is exploring financing vehicles that aim to attract capital for the urban and suburban
regeneration in the extremely poor areas of the global south• Promote sustainability standards and protocols for urban regeneration
projects in order to assess the generated impact• Require impact reporting on regeneration projects to ensure the delivery ofenvironmental and social goals

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B20 POLICY PAPER FINANCE & INFRASTRUCTURE• Promote innovative financing instruments for urban sustainable regeneration.
At the same time, policymakers could promote regulations to support regeneration projects with specific regard to:• Environmental priorities: regeneration of dismissed areas; reuse of material and circular economy; zero carbon emission; certified buildings; upgradeof physical and digital infrastructures; water treatment and waste-to-energy; implementation of large water projects for sustainable growth in emerging economies• Social priorities: creation of innovative hubs for start-ups and research;
peripheral areas redevelopment; social, affordable and student housing;senior living improvement; retrofit, development and digitalization of healthcare and education infrastructures.

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Recommendation 3: Growth Engines
Support sustainable economic growth by fostering SMEs access to capital,
promoting open innovation ecosystems with customer data subject to common protections across sectors, accelerating digitalization and innovation
processes in the financial sector, and by increasing the efficiency of Global
Value Chains (GVCs) and, on a more regional level, of Integrated Value Chains
Policy Actions
3.1 The G20 should promote the development of frameworks and policies
to facilitate access by SMEs to debt and equity markets in order to decrease their leverage and re-balance their funding sources, and the creation of specific growth funds to sustain SMEs that may have exhausted
their debt capacity during the pandemic crisis, while policymakers could
implement programs aimed at mobilizing private savings, also throughinstitutional investors, to support the real economy
3.2 Governments should promote Open Innovation and the creation of adhoc ecosystems with customer data subject to common protections
across sectors, also leveraging the role of early stage investors (e.g. Angel Investors, Venture Capital, etc.) to foster the creation of start-ups
and to support their growth, while enhancing efficient innovation insidecompanies
3.3 Policymakers should address barriers to the acceleration of the role
played by technology and artificial intelligence in the financial sector inorder to sustain its development, ensure that data are accessible to all
involved players and foster a level playing field across actors with due regard to data protection standards, while governments should promotepartnerships between financial institutions and tech companies to ensure the creation of innovative solutions especially in the cross border
payment sector
3.4 The G20 should work on the development of comprehensive frameworks to strengthen Integrated and Global Value Chains, taking into account“deglobalization” trends due to the Covid-19 pandemic, to improve theirresilience, flexibility and sustainability, while governments could support
the digitalization and the use of data in supply chains to increase efficiency and reduce bureaucracy

SDG impacted39

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Context
SMEs, which the OECD defines as companies employing less than 250 employees, are crucial in sustaining economic growth, especially in developing
countries, and therefore it is important to ensure they have adequate accessto capital.
Unfortunately, this is not always the case, as about half of SMEs do not haveaccess to credit, and this financing gap is even larger when micro enterprises
are taken into account45. The whole MSMEs financing gap reaches more than
$8 trillion every year, with developing countries’ SMEs being the most constrained with 65 million enterprises, or 40% of MSMEs, having unmet financing needs of $5.2 trillion every year46.
SMEs are the companies that have been most affected by the pandemic. Given their limited resources, and the existing obstacles in accessing capital,
the period over which SMEs can survive the shock is more restricted than forlarger firms47. Hence, the pandemic has particularly affected SMEs by creating deep liquidity shortages that could cause insolvencies in the future.
While taking into account the need to define an exit strategy from support
measures in order to avoid cliff-edge effects, Governments and Regulators
should continue to sustain SMEs by creating the conditions for the banking
sector to provide them with adequate levels of finance. At the same time,
given the current level of indebtedness, it is clear that SMEs cannot be solely
financed by bank loans, but they could be facilitated in accessing the capital
markets through dedicated instruments.
Another important role that the financial sector plays in ensuring economic
growth is its innovation and development. This innovation in the sector is fueled by two different trends, the entry of new Fintech companies and corporate investing in technology and artificial intelligence by traditional financial
insitutions.
Fintech companies are entities that use advanced technologies, mainly based on data analytics, to provide financial services. In particular, the threefundamental changes that have influenced the development of Fintech are:massive data generation, advances in computer algorithms, and increases inprocessing power48. Fintech has then been implemented in various financial
services, such as lending, payments (Paytech) and insurance (Insurtech), witheach of these growing at solid rates.
Exhibit 3
Funding deployed in Fintech
firms globally since 2013

Source: Bain analysis; CBInsights Global Fintech Report 201940

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

The Fintech expansion has been supported by large amounts of investments,
with more than $100bn funding deployed across more than 7,000 Fintech
firms globally since 2013 (Exhibit 3).
Given the rapid growth of these Fintech companies, traditional financial institutions have to increase their investments in technology and artificial intelligence. These developments will allow banks and insurances to offer better and faster services to their clients, but also to reduce their risk, given thegreater ability to assess the clients’ financial positions thanks to advanced
analytics. This will ultimately increase the resilience of traditional financial
institutions.
Another important engine of the world economy are Global Value Chains(GVCs). These have been strengthening yearly during recent times and havebrought various benefits to the firms participating in them, such as⁴⁹:•

Possibility to source their inputs efficiently•

Access to knowledge and capital beyond the domestic economy•

Ability to expand their activities into new markets.

An important enabler of GVCs functioning is Trade Finance, a system of credits that facilitates transactions and allows both importers and exporters to
reduce the risks involved. Unfortunately, the estimated value of unmet demand for Trade Finance is US$ 1.5 trillion annually, and 75% of rejected requests for Trade Finance relate to SMEs⁵⁰.
The pandemic and the following restrictive measures have caused a fall ininternational trade of between 13% and 32% in 2020⁵¹, leading to the crisis ofcertain Value Chains worldwide. As a consequence to the generated disruptions, some companies have started re-shoring their processes to mitigate
similar risks happening in the future, thus giving birth to more local / regional
Value Chains. We believe that given the numerous economic benefits that
GVCs generate, measures to support their stability should be implemented.
The most important role in the Value Chain is played by the head company,that has the ability and potentially the interest to participate through financing and investing in the capital of its suppliers, to strengthen their positions
and create an open innovation ecosystem. Another crucial role in supporting
the resilience of Value Chains is played by the insurance sector, which can mitigate some of the risks involved in international Value Chains, thanks to suitable insurance policies which can support their resilience.

45

World Bank (2020): Small and medium enterprises (SMEs) finance46

IFC (2019): MSME FINANCE GAP

47

OECD (2020): Coronavirus (Covid-19): SME policy response

48

International Monetary Fund (2020): The promise of Fintech

49OECD (2020): Covid-19 and global value chains: Policy options to build more resilient production networks

50

World Trade Organization (2019): Trade finance and the compliance challenge

51

World Trade Organization (2020): Trade set to plunge as Covid-19 pandemic upends global economy

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Policy Action 3.1: The G20 should promote the development of frameworks and policies to facilitate access by SMEs to debt and equity
markets in order to decrease their leverage and re-balance their funding sources, and the creation of specific growth funds to sustain SMEs
that may have exhausted their debt capacity during the pandemic crisis, while policymakers could implement programs aimed at mobilizing
private savings, also through institutional investors, to support thereal economy
The current pandemic has made SMEs more vulnerable and caused theirdebt levels to increase considerably. This trend is of a particular importance for the global economic growth, as SMEs account for more than 90% ofbusinesses worldwide and represent 50% of global employment⁵². For thisreason, ensuring and supporting their development, by fostering their access to capital, is fundamental. At the same time, savings across the G20
countries have never been so high, with the European saving rate in the first
three quarters of 2020 reaching an average of 19,5% compared to 13% in theprevious year, and the US personal saving rate reaching an average of 16% in2020 compared to 7.5% in 2019. This increase is particularly due to the widespread restriction measures that slowed households’ expenditures in various
countries. These savings represent an invaluable asset that could be invested
to contribute to economic recovery and SMEs growth.
To match these two current needs, we recommend to:• Maintain / prolong the measures aimed at sustaining SMEs access tocapital throughout the crisis
Measures such as the SMEs supporting factor, and other policies implemented to limit the impact of the Covid-19 crisis, have helped SMEs survive thisperiod of scarce liquidity. Due to the high uncertainty prevailing in the context of the pandemic, we believe that absolute priority should be given to
maintaining the capacity of the financial sector to provide liquidity to SMEs
affected by the crisis. While doing so, as also underlined by the recent G30
Report⁵³, it is important to distinguish firms that are in temporary difficulties
in need of support and those that have limited prospects for recovery.
Therefore, we recommend regulators to discuss the potential extension ofthese supportive measures, and to ensure that the future phase out will be
gradual, to avoid unintended incentives for banks to reduce their support tohealthy companies working toward a full recovery.
Furthermore, the G20 should request the FSB, in coordination with the international standard setting bodies, to review the impact of the regulatory
framework on SMEs financing, as government support measures put in place during the Covid 19 pandemic are unwound, through a revised regulatory
evaluation framework which can provide recommendations on potential refinement or revision of the regulatory standards, where warranted, in orderto support recovery from the crisis. This can also be considered through theBasel Committee’s own current workplan evaluating the impact and effectiveness of the post financial crisis reforms⁵⁴.

52

World Bank (2020): Small and Medium Enterprises (SMEs) financeGroup of Thirty (2020), Reviving and Restructuring the Corporate Sector Post-Covid: Designing Public Policy
Interventions
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B20 POLICY PAPER FINANCE & INFRASTRUCTURE• Develop instruments and frameworks to facilitate SMEs access toequity to support their growth post the pandemic crisis and establish measures to mobilize private savings in order to foster investment for growth
Given the current level of corporate indebtedness, it will be critical for a healthy economic recovery to ensure the recapitalization of companies. In fact,
in order to relaunch companies with vitality and strength it is fundamental tofacilitate their access to new equity, rather than only leaving them to service
debt.
In this context, it is important that Governments invest in pandemic recovery funds, such as the European Recovery and Resilience Facility (RRF) for
EU countries, with the objective, among other purposes, of sustaining andrebalancing the capitalization of SMEs, in particular in order to support theirsustainable transition and digital transformation.
Therefore, we recommend the G20 to promote market instruments andstructures that suit SMEs sizes, growth objectives and funding needs, fromequity to debt financing, with a particular focus on strengthening the capitalization of companies. In view of the recovery, a focused involvement of
the public sector - also through Development Banks - for a given period as
an equity partner alongside the private equity industry could be effective
in helping them rebalance their capitalization following this period of crisis.
Another solution could be the creation of specific growth funds, investing in
rapidly growing businesses that have outgrown the venture capital stage but
not yet achieved sufficient scale for listing, in order to sustain SMEs that may
have exhausted their debt capacity during the pandemic crisis⁵⁵.
Moreover, to further promote SMEs access to capital markets, it is necessary
to foster the enhancement of entrepreneurs’ financial skills, the reinforcement of their governance and the implementation of organizational changes
based on market best practices and frameworks. Improvement in financial
literacy across society is necessary and could facilitate the formation andgrowth of successful businesses. To this extent, training programs such as
ELITE56, developed by the Italian Stock Exchange and adopted in 45 countries, could be supported.
Furthermore, we recommend governments to develop specific mechanisms
to unlock the immobilized private savings and to attempt to direct them,through institutional investors, toward instruments and frameworks for investing in SMEs.
For example, if the European Long-Term Investment Funds (ELTIFs) weremore in line with the needs of current investors (both retail and professional) they could become an impactful vehicle to channel households’ savings
toward SMEs hence fostering their growth. On this topic, the European Commission has recently promoted a review of the ELTIFs Regulation for which
the consultation phase has already been completed.
Tax incentives could also be further explored for retail investing in debt andequity products specifically dedicated to SMEs, such as ISAs (Individual Savings Accounts) in the UK and Piani Individuali di Risparmio Alternativi in
Italy. The tax benefit schemes should be constructed in order to minimize therisk for savers and to guarantee long term financing for SMEs. In this sense, aminimum investment holding period should be envisaged.

An example could be the “Business Growth Fund”, which is a fund investing in rapidly growing SME’s in UK and
Ireland. 56 More information available here: https://www.elite-network.com/private-companies/programmes
55

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Policy Action 3.2: Governments should promote Open Innovation andthe creation of ad-hoc ecosystems with customer data subject to common protections across sectors, also leveraging the role of early stage
investors (e.g. Angel Investors, Venture Capital, etc.) to foster the creation of start-ups and to support their growth, while enhancing efficient innovation inside companies
Open Innovation applies the principles of free trade to innovation, advancing
new ideas with tools such as partnerships, joint ventures, licensing and strategic alliances. An Open Innovation Ecosystem is an environment in whichbusinesses invest in R&D projects beyond their corporate borders, and multiple investors co-participate in innovative start-ups, digital business venturesand research hubs that exchange data and knowledge among them.
Promoting an Open Innovation Ecosystem is of a particular importance inthis period of scarce liquidity for businesses, as it is crucial to drive the efficient allocation of companies’ R&D resources. In fact, by reaching beyond
corporate borders, a company can import lower-cost, higher-quality ideas
from a wide array of world class experts to improve the speed, quality andcost of innovation. This approach allows the business to refocus its own innovation resources where it has clear competitive advantages. However, there
are various impediments to the implementation of open innovation, including addressing data localization measures and inconsistent standards for
information sharing on a cross-border basis.
Therefore, we recommend that governments foster open innovation by incentivizing investing and financing in research centers and start-up hubs,
while they commit to facilitate cross-investments and exchange of data
between businesses and the academia, through cooperation, to harmonize
data disclosure regulations. In order to create such ecosystems, governments
should review the cases of virtuous start-up hubs, such as the Silicon Valley
and Tel-Aviv, and align to their best practices.

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Policy Action 3.3: Policymakers should address barriers to the acceleration of the role played by technology and artificial intelligence inthe financial sector in order to sustain its development, ensure thatdata are accessible to all involved players and foster a level playing
field across actors with due regard to data protection standards, while
governments should promote partnerships between financial institutions and tech companies to ensure the creation of innovative solutions especially in the cross border payment sector• Accelerate the role of technology, advanced analytics and artificial intelligence in the financial system to sustain their development
During the Covid-19 crisis, digital innovation has accelerated and it has beenstress-tested under real world extreme circumstances in various industries.
In the financial sector, for example, Fintech companies, Insurtech companies and all digitally advanced financial institutions have an advantage overmore traditional entities in digital verification and customer onboarding.
Nowadays, it is clear that exploiting artificial intelligence is a key competitive
advantage in the industry, and therefore embracing a holistic digital transformation journey has become a key priority for executives in the financial
sector⁵⁷. This technological development will be beneficial to the clients oftraditional financial services firms, as it will speed up application and processing times and claims payments, generate a better customer experience andpotentially decrease the costs of products and services.
With reference to the regulatory framework, it is important that the regulation for financial services is favorable to innovation and digital technologies,
technologically neutral and sufficiently future-proof to enable adaptation to
the digital era.
Within this framework, we recommend that governments remove barriers
to digitalization and consider incentive schemes and methods of innovation
promotion, such as regulatory sandboxes which should be accessible both toemerging FinTechs and to established financial institutions, to stimulate investments in digitalization and artificial intelligence within the financial sector, to improve the quality of services and ultimately sustain its development.
Financial services need to also deal with the challenges and risks imposed bythis upcoming digital transformation which requires a combination of innovative regulations and efficient supervision which is capable of supporting
the digital transformation of the sector.
Therefore, we recommend that regulators implement appropriate risk based rules for issues related to financial innovation and technology, including:cyber resilience, Anti Money Laundering⁵⁸ (AML), Combat Financial Terrorism (CFT), consumer protection and data privacy, business continuity andthird-party providers. As described in the recent occasional paper by the
Financial Stability Institute⁵⁹, such a regulatory framework may require a
combination of activity-based and entity-based rules as well as ensuring that
responsible public authorities develop innovative and robust solutions to supervise these risks to ensure financial stability and market integrity.

57

On the development of Artificial Intelligence see the Policy Paper of the B20 Task Force on Digital Transformation

The FATF is a leader in this area; the key for a successful AML/CFT framework globally is the effective design
and a consistent implementation of standards across jurisdictions.
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https://www.bis.org/fsi/fsipapers17.pdf

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Although regulations and supervision should limit cyber risks, these challenges could be further mitigated through the implementation of Cyber Insurance. This type of insurance is a valuable risk transfer mechanism, and alsooffers a range of associated pre-event and post-event services, such as data
restoration.
For these reasons, we recommend Governments to work with the insurance industry to consider the potential benefits of Cyber Insurance coverage
across various sectors and in particular in the financial services one, in orderto sustain its technological development and better exploit the benefits arising from innovative solutions.
•

Access to data generated in the financial sector

As previously mentioned, data are becoming key in our economies and, in particular, the financial sector that growingly uses technology and data. A consequence of that is the growing range of digital services offered by financial
institutions, including new players such as Fintech and Insurtech companies.
Financial institutions, Fintech and Insurtech companies must use data in a responsible way (i.e. respecting citizens’ rights to have control over the use of
their data) and in accordance with existing data privacy laws and regulations.
Technology enables faster and tailor-made solutions to clients and reduces
the risks for the financial intermediaries. Within the financial sector, insurance is a particularly data-reliant industry, and thus access to data and theability to move these across borders are essential needs for insurers, since
the more data become available for the common good, the better the digitalsolutions and analytical models can be.
Although the importance of cross-sharing data between industries and geographies is recognized, this practice is still challenged by regulatory fragmentation across different jurisdictions. Currently, an obstacle to technologicalinnovation in the Financial Services sector is represented by data localizationand specific regional data regulations, which create regulatory asymmetry
and a competitive disadvantage compared to other sectors.
These restrictions can also bring some side effects for the financial systemand the overall economy, as they may undermine risk management practicesof financial institutions and reduce the access to financial services and markets in some countries, ultimately constraining economic growth. However,regulatory “fragmentation” on data (i.e. different approaches to data ownership and protection) is unavoidable in the absence of internationally approved standards, which would allow mutual recognition.
For these reasons, the G20 should mandate a dedicated taskforce to explore
the impacts of data localization in the financial industry and to take stockof existing data regulations, as a basis for potential future global data frameworks and international standards on data privacy in the financial sector,
which would allow to reduce the current fragmentation. This exercise shouldtake into consideration areas where, given the sensitivity of data, jurisdictions
need to retain flexibility in defining local data regulations. For users to truly
benefit from the opportunities their data could offer, a broader framework
should include the goal of harmonizing regulatory principles among different
sectors that would enable data sharing across sectors⁶⁰.

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46This is also recommended in the Policy Paper of the B20 Task Force on Digital Transformation (2021)

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Moreover, governments should promote partnerships between financial institutions and tech companies, based on contractual relationships and faircompetition rules, to ensure the creation of innovative solutions especially inthe cross-border payment sector.
In this work, particular attention should also be given to the role that can beplayed by “Data Verification”⁶¹. Digital technology such as data verification
may, for example, help facilitate trusted cross-border recognition requiredfor compliance purposes. Digital technologies related to data management
and utilization (cloud, blockchain, artificial intelligence, etc.) must be at theheart of this work.
Moreover, the G20 should aim at defining a global strategy for data, startingfrom setting the basis for a secure, reliable and genuine worldwide data space, which would benefit both consumers and firms. To this end, users (consumers and businesses) should be empowered to decide which data to shareand with whom within the frame of user and firm data protection laws.
As recently outlined in the Basel Committee work program 2021-22 and in
the IAIS Strategic Plan 2020-2024, supervisory authorities at international
and local level should foster the use of advanced analytics technologies (Suptech and Regtech) so as to perform more efficient, sustainable, and effective
controls in the financial sector.
• Promote partnerships between financial institutions and tech companies to create innovative solutions, especially for cross-border payments
Cross-border payments are the fundamental pillar of international trade andeconomic activity. Faster, cheaper, more transparent and inclusive cross-border payments would bring widespread benefits for supporting economic
growth, international trade, global development and financial inclusion⁶².
The Committee on Payments and Market Infrastructures (CPMI) identified 19‘building blocks’ where public and private efforts could enhance cross-border payments. The FSB has then developed a detailed roadmap⁶³ to addressthese key challenges.
To ensure consistency and obtain effective results, we recommend that themost suitable expert bodies implement the actions following this roadmap
working in close coordination with the private sector, while the FSB should
coordinate the progresses, and ensure that these are developed in a coordinated manner, as they display various interdependencies among them.

The purpose of the “data verification” is to confirm, i.e. verify, that the information reported is correct, without
the need of sharing the underlying data.
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62

Financial Stability Board (2020): Cross-border payments

63

Financial Stability Board (2020): Enhancing Cross-border Payments – Stage 3 roadmap

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Policy Action 3.4: The G20 should work on the development of comprehensive frameworks to strengthen Integrated and Global Value
Chains, taking into account “deglobalization” trends due to the Covid-19 pandemic, to improve their resilience, flexibility and sustainability, while governments could support the digitalization and the use ofdata in supply chains to increase efficiency and reduce bureaucracy• Develop comprehensive frameworks, including for trade finance andtrade credit insurance, to strengthen Integrated and Global Value Chainsto improve their resilience, flexibility and sustainability
A key enabler for strengthening value chains is Trade Finance, a system ofcredits that facilitate transactions and allows both importers and exporters
to reduce the risks involved⁶⁴. According to the International Chamber ofCommerce (ICC), with strained public finances, limiting scope for further
government stimulus measures, trade is expected to be a vital form of relief
for many businesses in the wake of Covid-19⁶⁵.
For these reasons, we recommend regulators to continue to consistently improve the treatment of trade finance from a regulatory perspective in linewith its profile as a short-term, low risk, self liquidating form of financial
intermediation which supports the real economy. Furthermore, we recommend increasing support for Export Credit Agencies (ECAs) to provide adequate backing for trade transactions.
Insurances are another key supporting factor to the strength and resilienceof value chains. They can mitigate specific risks involved with the transportation mode (e.g. Aviation / Marine) as well as support multinational enterprises(MNEs) through “difference-in-conditions and difference-in-limits” policies(DIC/DIL), mitigate credit risk in Trade Finance, and further expand its effectiveness. Furthermore, insurances reduce shocks and interruptions in theoperation of value chains, ultimately improving sustainability and resilience.
Governments can play a role in educating companies involved in trade finance on the benefits of value chain insurance policies that can increase the resilience of such companies.
Moreover, we recommend cooperation among countries to introduce global
standards, such as the GVC passport initiative, a virtual document constantly
certified by the relevant authorities to provide accreditation across the value
chain, to bring significant reduction in bureaucracy, and ultimately increase
efficiency⁶⁶.

64

On Trade Finance see also the Policy Paper of the B20 Trade & Investment Task Force (2021).

International Chamber of Commerce (2020): Priming trade finance to safeguard SMEs and power a resilient
recovery from Covid-19
65

B20-BIAC (2020): GVC passport on Financial Compliance, a pragmatic concept to strengthen inclusive andsustainable growth; B20 Saudi Arabia and Business at OECD (BIAC); September 2020. On this issue, see also the
Policy Papers of the B20 Action Council on Sustainability & Global Emergencies (2021) and of the B20 Trade &Investment Task Force (2021).
66

48

B20 POLICY PAPER FINANCE & INFRASTRUCTURE• Support digitalization and the use of data in supply chains to increase
efficiency and reduce bureaucracy
Digitalization of value chains consists in the adoption of a range of technologies (analytic AI, advanced robotics, DLT-Blockchain based technologies,
and digital platforms) for running scenarios, assessing trade-offs, improving
transparency, accelerating responses, and even changing the economics ofproduction. These have proved to be fundamental during the pandemic,
where consumer habits have been disrupted and governments’ restrictions
have limited human direct involvement in the management of value chains.
Within this framework, we recommend governments to stimulate corporate investments in the implementation of artificial intelligence inside value
chains, enabled by the running of data flows through the entire chain, in order to strengthen supply chain risk management and improve end-to end
transparency.
• Enhance the role of companies at the top of a value chain in building
resilience in their supply chains and operations
The Covid-19 pandemic has forced businesses to focus on building resiliencein their supply chains and operations and companies at the top of a value
chain have a vested interest in preserving the supplier networks on which
they depend.
In the aftermath of the global financial crisis, some companies accelerated
payments or guaranteed bank loans to give key vendors, in particular SMEs, alifeline. Other used centralized control tower systems that integrate real-time data for running scenarios and managing production of their own plants
as well as suppliers’ and distributors’ production. This requires a seamlessflow of data along the value chain, robust digital systems as well as analytics
capabilities.
Most companies are still in the early stages of their efforts to connect the entire value chain with a seamless flow of data, but those investments can pay
off over time, not only improving resilience, but also improving digital capabilities, boosting productivity, and strengthening entire industry ecosystems.
We therefore recommend governments and MDBs to promote head companies’ investments and financing in the capital of their suppliers, through thecreation of ad-hoc instruments, to strengthen their value chains and create
open innovation ecosystems.

49

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Recommendation 4: Global Regulatory Environment
Review the financial sector regulatory framework to ensure that it can support economic resilience during, and recovery after, the Covid-19 crisis byaddressing climate-change, systemic and pandemic risks, improving prudential measures and NPL regulations, and by constructively reviewing non-bankfinancial sector’s regulation.
Policy Actions
4.1 The G20 should promote an appropriate policy environment to foster
innovative solutions, also promoting the cooperation between Publicand Private sectors in order to support the parties affected by catastrophic events and reduce the economic burden of responses to catastrophes on public budgets
4.2 Policymakers should continue a review of the existing prudential regulatory framework in the context of the experience through the Covid-19
pandemic, to assess to what extent it may affect the ability of financial
services, including insurance, to support economic recovery and to reduce
the risk of procyclical effects, while the FSB should continue working to
reduce the fragmentation of financial regulations to support financial stability and economic growth and allow a consistent level of flexibility acrossfinancial markets
4.3 The G20 should encourage banking regulatory authorities to review, inlight of the Covid-19 crisis, the effectiveness of existing NPL regulations
to reduce the risk of forced classification as NPLs of loans to viable businesses, temporarily under stress due to the pandemic. The G20 could
also call for a higher standardization of these rules and for improved framework / processes to manage unlikely-to-pay credits to maximize thechances of recovery / return to a Performing status
4.4 The G20 should encourage policymakers to consider policy measures
to continue enhancing the resilience of the NBFI sector, building on thework of the Financial Stability Board (FSB). This should be done under aholistic approach that identifies and addresses potential risks using anactivities based approach, while preserving and stimulating the contribution of all market participants to recovery, transition and innovation

SDG impacted50

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Context
According to the new Macroeconomic Resilience Indices jointly developed by
Swiss Re Institute (SRI) and the London School of Economics (LSE)⁶⁷ the near-exhaustion of monetary policy options, given the prolonged period of low
interest rates, has made certain segments of the world economy potentiallyless resilient than in 2007, the onset of the global financial crisis.
Another threat to financial stability lies in the fact that society tends to thinkof catastrophic events as having low probabilities, and therefore under-insures its assets against these risks. However, catastrophic events occur more
often than what we appreciate, and both frequency and severity have increased in recent times (Exhibit 4).
Exhibit 4
The economic costand frequency of these disasters
have been growing

Note: Values in USD at 2019 prices; Includes floods, storms, earthquakes, droughts/forest fires/heat waves, cold
waves/frost, hail, tsunamis, other natural catastrophes, and man-made disasters (major fires and explosions,aviation and space disasters, shipping disasters, rail disasters, mining accidents, collapse of buildings/bridges, terrorism, and other miscellaneous); Excludes war, civil war, and war-like events
Source: Bain Analysis; SwissRe Sigma 2/20

We have seen that natural disasters, including pandemics, can have very tangible effects on people, institutions, businesses and their supply chains. Furthermore, of the total losses caused by natural disasters since 1980 (Exhibit4), more than 70% was not insured⁶⁸, causing direct damages on the population.
However, the pandemic has clearly shown that neither the private sector nor
governments alone can effectively tackle global systemic risks:• Taking the example of pandemics, these pose challenges to the basic principles of insurance such as diversification / mutualisation of risks. Moreover,the losses derived from pandemics can be enormous, going beyond insurance capacity, with governments responsible for the shortfall (Exhibit 5)• On the other side, governments lack the expertise and micro-level capabilities, due to their typical scope of activities and slower reaction time.

67

Swiss Re (2019): https://www.swissre.com/media/news-releases/nr-20190907-sigma-5-2019.html

Munich Re (2019): https://www.munichre.com/en/risks/natural-disasters-losses-are-trending-upwards.
html#- 1624621007
68

51

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Exhibit 5
Covid-19 financial stimulus
as a percentage of GDP1

Note: As of May 2020
Source: Bain analysis; Lit Search

Therefore, partnerships between governments and insurance companies arewell fit for the purpose of addressing pandemic, climate and other systemicrisks. Although Public-Private Partnerships (PPPs) require further development and progresses in various countries worldwide, there are some modelsof partnerships covering comparable catastrophic risks, such as the BusinessContinuity Protection Program (BCPP) in the United States, supported by
the largest insurance companies, the Consorcio de Compensacion de Seguros in Spain, Flood Re in the UK, the Caisse Centrale de Réassurance (CCR)
and the proposal of an “exceptional disaster scheme” (CATEX, put forward
by the French insurance industry) in France.
To further ensure stability in the financial sector and in the overall economy
after the Financial Crisis, policymakers have strengthened prudential regulations, including raising capital requirements for banks under Basel III andprudential capital rules for EU Insurance companies under the Solvency II
Directive. These increases in capital requirements have constrained somefinancial activities, such as reducing the banks’ holding of capital-market assets by 39% between 2010 and 2016⁶⁹.
At the beginning of the Covid-19 financial crisis, regulators implemented a
set of measures to provide additional operational capacity for banks to contrast the immediate financial stability priorities resulting from the slowdownof the global economy. In particular, an important matter in this context is
the implementation of the Basel III “Finalization”, considered by regulators
as one of the last steps of the post-crisis reform. Regarding this matter, theG20 has already expressed in previous summits that the Basel III finalization
should be implemented with “No significant capital increase“.
Another issue that the financial sector is facing is regulatory fragmentation.
According to figures estimated by the International Federation of Accountants (IFAC) and by the Business and Industry Advisory Committee to OECD
(BIAC), regulatory fragmentation costs financial institutions more than$780bn annually. These costs divert funds away from investments in financial
services with positive economic impacts; in fact over the past years, 51% of
financial institutions declared they had to divert funds away from risk management activities because of regulatory divergence. Furthermore, financial institutions spend more than 10% of their annual revenue dealing withregulations that are of high complexity and differing across countries, thus
reducing their profitability and potentially creating stability issues.

69

52

More information available here: https://www.ft.com/content/d793068c-3d99-11e8-b9f9-de94fa33a81e

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Moreover, regulatory divergences across countries are a constrain also to
cross-border economic activities, with 71% of institutions reporting that regulatory divergence was a moderate to substantial barrier to extending operations into new regions. Moreover, as is often the case, the costs arising from
regulatory divergence are proportionally higher for smaller institutions thanlarger financial entities, negatively affecting competition in the industry.
For the outlined reasons, we believe that addressing regulatory fragmentation should be a priority for the G20 members.
Another important role in the financial system is played by the Non-Bank
Financial Intermediation sector (NBFI); these players are difficult to define,
but the widest FSB definition considers NBFI as “all the financial institutions
that are not central banks, banks or public financial institutions”⁷⁰. This sector started growing intensively after the 2008 crisis, when there has been astrong increase in the number of regulations for banks, and therefore many
activities have been moved to the NBFS (Exhibit 6).
Exhibit 6
Non-bank financial assets as ashare of total financial assets

Note: All assets underneath intermediaries that are not central banks, banks or public financial institution.
Source: Jurisdiction 2019 submission (national sector balance sheet and other data); FSB calculation

Non-bank financing is a valuable source of financing for many firms and households, it facilitates competition among financing providers and supports
economic activity. However, activities based risk could arise from non-bankfinancing intermediations, especially if these are interconnected with otherparts of the financial system.
For these reasons, in 2009 after the London G20 Summit the FSB wasestablished, with the role, among others, to review and monitor these activities. However, the non-bank financial intermediation activities that received
more attention are included in what the FSB call the “Narrow Measure”, thatis comprised of non bank financial institutions that authorities have assessed
as being involved in credit intermediation activities that may pose bank-likefinancial stability risks and/or regulatory arbitrage; examples of institutionsin this category are hedge funds.
However, according to the FSB, the market crisis following the Covid-19 pandemic highlighted the importance of monitoring developments in the NBFI
sector, as it has grown faster than banks over the past decade, including in
2019.

70

Financial Stability Board (2020): Global Monitoring Report on Non-Bank Financial Intermediation

53

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

We agree with the FSB that further analysis should be done to map the potential sources of interconnectedness between NBFIs and the rest of thefinancial system in order to further evolve an activities based approach todeveloping a comprehensive understanding of the potential sources of systemic risk to the global economy.
It is clear, that the sources of systemic risks are not easy to be identified, andwe agree with the FSB that further analysis should be done to enhance anunderstanding of which activities potentially give rise to systemic risks, andbetter map the interactions between banks and non-banks.

54

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Policy Action 4.1: The G20 should promote an appropriate policy environment to foster innovative solutions, also promoting the cooperation between Public and Private sectors in order to support the parties
affected by catastrophic events and reduce the economic burden of
responses to catastrophes on public budgets
Insurers play a pivotal role in helping design solutions and provide guidance
to enhance prevention, resilience and responses to climate and pandemic risks.
Measures for the prevention, management and insurability of natural disasters are everywhere an integral part of actions to combat climate change
and ensure the transition to a low-carbon and sustainable economy. This iseven more necessary now that we are witnessing a pandemic and a dramaticincrease in natural disasters, as well as in their capacity for destruction and intheir economic and social impacts.
Pandemic risks stand out from other catastrophic risks for a number of reasons, in particular due to the size of their associated losses and the geographic
reach of outbreaks. In addition, there is no clear, predictable time limit on apandemic: this means the potential loss is impossible to estimate, and therefore uninsurable under the traditional insurance business model. As a result,though insurers can help administer and facilitate a government-run pandemic response program, the private insurance industry cannot hold pandemicrisks by itself.
For these reasons, we recommend governments to help establish partnerships between public bodies and the insurance industry in order to develop
innovative and internationally harmonized solutions⁷¹. It is fundamental thatgovernments on the lines of what already exists in many countries, make every
effort to find a solution that through PPP mechanisms can provide catastrophic and pandemic insurance protection in every country, especially for
SMEs, which are particularly exposed to the economic impacts of a pandemic.
What could be done in addition to cooperation between Public and Private
sectors to reduce natural catastrophes and pandemic risks is to foster a “Societal Risk Compact” approach, where companies, governments and insurers
play a proactive role in anticipating these risks and collaborate to mitigate
and minimize their impacts on society. This includes prioritization of resilience in corporates' and investors’ agenda, support to companies in identifying
and quantifying their risk exposure, and governments’ subsidization of extended insurance coverage by providing loss protection or loss sharing to insurance companies⁷².

71This is also addressed by the B20 Action Council on Sustainability & Global Emergencies (2021).

World Economic Forum, Bain & Company (2020): Building a More Resilient and Sustainable World: An action
plan for the insurance and asset management industry
72

55

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Policy Action 4.2: Policymakers should continue a review of the existing prudential regulatory framework in the context of the experience through the Covid-19 pandemic, to assess to what extent it may
affect the ability of financial services, including insurance, to support
economic recovery and to reduce the risk of procyclical effects, while
the FSB should continue working to reduce the fragmentation of financial regulations to support financial stability and economic growth
and allow a consistent level of flexibility across financial markets• Review the effectiveness of current prudential regulations and assess
those that worked well and those that need improvement and revisions,in particular those causing procyclical effects in the economy
Regulators around the world have reacted swiftly to the pandemic providing
much needed flexibility so that the financial sector can effectively serve its
clients, support struggling businesses and fund the recovery. The ongoingpandemic and the ultimate recovery will continue to present ongoing issues
for markets.
While we strongly believe that the post 2007/2008 financial crisis regulatory
framework has made the financial system safer and more secure, it remains
important to review that framework in a dynamic and holistic fashion – particularly as it relates to the impact of the pandemic.
We acknowledge that according to its recent “Work program and strategic
priorities for 2021/22⁷³” the Basel Committee will be devoting a substantive
part of its agenda over the next few years to carefully evaluating the impact
and effectiveness of its post-crisis reforms also taking into account the effects of the Covid-19 pandemic. The Financial Stability Board is also undertaking a review of Covid-19 vulnerabilities⁷⁴. As such, we recommend that as
the BCBS and the FSB continue their analysis of the lessons learned from theCovid-19 crisis, their reviews should assess the effectiveness of the global regulatory framework and procyclicality in the financial system, and whether
this could lead to issues for financial stability. Furthermore, the reviews undertaken should also examine the impact of the crisis on the provision oflending to and investments in the real economy, particularly in the areas ofinfrastructure and SMEs financing as support measures are unwound (topics
also discussed in the Recommendations 2 and 3).
• Review the regulations of the insurance sector to ensure they do notconstrain its effectiveness in mitigating risks and in supporting the real
economy through its investments
As well as the rest of the financial sector, insurance companies have prudential regulations with which they have to comply, with the aim of ensuring fair,safe and stable insurance markets, the protection of policy holders and financial stability. However, these regulations should avoid the creation or continuation of non-risk-based barriers to insurers’ efforts to provide innovative
products and services designed to help close the protection gap, including
data localization barriers discussed in the Policy Actions 3.2 and 3.3.

5673https://www.bis.org/bcbs/bcbs_work.htm

74

https://www.fsb.org/2021/02/fsb-chairs-letter-to-g20-finance-ministers-and-central-bank-governors-february-2021/

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Furthermore, prudential regulations should also avoid undermining the longterm business of insurance companies and their related investment potential
in order to allow them to support the real economy, especially in the context
of the post Covid-19 economic recovery. In this context, the sector is facedwith different prudential regulations and supervisory approaches across jurisdictions that complicate efforts to conduct a cross-border insurance business on both the asset / investment and liability / underwriting sides of thebalance sheet.
In particular, the prudential regulation should take into consideration theCovid-19 crisis context and it should remove unnecessary costs and barriers,in particular in relation to long-term products and investments, including
infrastructure investment, that prevent the insurance sector from playing abigger role in fostering the economic recovery.
• Harmonize prudential policies and regulations, building on the workof the FSB, in order to reduce fragmentation across financial markets, inparticular focusing on regulations regarding cross-border capital flows,
including M&A activities.
Fragmentation of financial regulatory regimes have led to: major increases
in annual compliance costs, lost business for many companies operating in
multiple markets, and lower capital flows, needed to fund infrastructure andeconomic growth – indeed recovery - in these challenging times. These regulatory and supervisory policies that fragment markets can ultimately inhibitor restrict cross-border lending and investment activities, thereby reducing
the variety of associated economic and resilience benefits. Regulatory fragmentation can also constrain financial companies’ mergers and acquisitions,which, if well designed and executed, could increase the financial sector resilience and preserve the diversity of business models of different institutions75.
In 2019, the FSB identified four areas for further work to address market
fragmentation, with these being: Deference, Pre-positioning of capital andliquidity, Regulatory and Supervisory coordination and information sharing,“Too-big-to-fail” (TBTF) evaluation.
Although multiple jurisdiction supervisory oversight has improved, theprocess of designing and implementing financial regulations that affectcross-border financial services points to the need for enhancements to government-to-government mechanisms for cross-border financial regulatory
cooperation. Regulatory fragmentation can also stem from a diversified approach to the application of the principle of proportionality, often quoted
in the financial regulation of various jurisdictions, but applied with different
approaches.
For these reasons, the G20 should engage the FSB to raise its level of ambition as regards to its work on fragmentation, which at this stage resulted in limited progress, by encouraging outcomes-based, risk-sensitive, transparent
and flexible deference processes, better calibration of pre-positioned capital and liquidity resources, stronger regulatory and supervisory coordinationand information-sharing, as well as clarification of the role of the lender oflast resort.

75

European Central Bank (2020): Guide on the supervisory approach to consolidation in the banking sector

57

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

In particular, we ask the G20 to encourage harmonized regulatory frameworks regarding cross-boarder capital flows, including M&A activities, crucial toenable financial institutions across the world to compete on a level playing
field. While doing so, we believe it is of a particular importance to take into
consideration the proposals of the global financial community. In addition,
the G20 should also establish a clear path toward a concrete application of
the principle of proportionality.
It is also very clear that fragmentation concerns exist particularly in areas
where international standards have not been fully developed. As such, thereview of market and regulatory fragmentation should also encompass addressing solutions in other areas discussed in this paper, including sustainability and data localization (Policy Action 1.2 and 3.3).

58

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Policy action: 4.3: The G20 should encourage banking regulatory authorities to review, in light of the Covid-19 crisis, the effectiveness of existing NPL regulations to reduce the risk of forced classification as NPLs
of loans to viable businesses, temporarily under stress due to the pandemic. The G20 could also call for a higher standardization of these rules and for improved framework / processes to manage unlikely-to-pay
credits to maximize the chances of recovery / return to a Performing
statusThe key priority in the current environment is to avoid that the Covid-19 health crisis transcends into a new financial crisis. Therefore, the most importantrole for governments with bank-dominated financial systems will be the management of bank loans where a non-marginal portion of them may become
non-performing loans. An increase in NPLs, alongside weaker bank earnings
in a low-growth and low-interest environments, could reduce bank lending
ability, despite strong monetary policy support, with negative feedback effects on the economy. A key concern is the prospect that support programs
would cease at a single point in time, which could create a sudden economic
shock with ripple effects through the economy and across the financial sector.
Additional complexity arises in identifying non-viable firms, as locking in resources in less productive firms would undermine the pace of a sustainableeconomic recovery. As highlighted by the recent G30 Report⁷⁶, “Policy choices should avoid actions that would significantly weaken the financial sector,
such as forcing banks to make bad loans as a way of supporting the economy”.
Therefore, we recommend that NPL regulations and insolvency laws are reassessed in the contest of the Covid-19 pandemic, first of all with a view tofinding a balance between the risk of supporting potentially non viable firms
and that of prematurely liquidating productive firms, causing a procyclicality
effect, possibly leading to a new financial crisis. We then believe that theseregulations and laws should be standardized internationally as much as possible, also in order to avoid further fragmentation of the financial sector.
Furthermore, we believe that the G20 should promote the creation of instruments / frameworks to support the restructuring of “Unlikely to Pay” (UTP)
and Doubtful Loans, while at the same time calling for the strengthening of
secondary markets for NPLs, in order to help banks in improving their books
and support companies’ recovery.
Given the urgency to prevent “cliff edge” insolvencies, we believe theseactions should be prioritized and implemented quickly, to take effect as earlyas possible, within the crisis exit timeframe.

Group of Thirty (2020), Reviving and Restructuring the Corporate Sector Post-Covid: Designing Public Policy
Interventions
7659

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Policy action 4.4: The G20 should encourage policymakers to consider
policy measures to continue enhancing the resilience of the NBFI sector, building on the work of the Financial Stability Board (FSB). Thisshould be done under a holistic approach that identifies and addresses potential risks using an activities-based approach, while preserving
and stimulating the contribution of all market participants to recovery,transition and innovation
Building on the FSB’s 2020 report to the G20 and its Holistic Review of the
March 2020 Market Turmoil, policymakers should continue to assess theeffectiveness of regulation of the non-bank financial intermediation (NBFI)
sector from a holistic, market-wide perspective to identify potential sourcesof structural vulnerability. This can inform future policy actions to mitigate
the build-up of systemic risks. Greater measurement and mapping of the interconnectedness of the various elements of the NBFI sector and with therest of the financial system will enhance resilience while preserving and stimulating the contribution of all market participants to provide the financing
needed to drive the post-COVID economic recovery, the transition to global
Net Zero commitments and to encourage innovation.
From the various actions to be taken as a follow-up to the FSB report, weparticularly recommend to undertake a stock take exercise comparing theregulatory frameworks implemented in the various jurisdictions after the
global financial crisis, to identify the measures that have helped resilience insome jurisdictions.
In this context, the B20 welcomes the recent G20’s commitment to takestock of the lessons learned from the pandemic from a financial stability perspective and to work towards a strengthening of the resilience of the activities performed by the NBFI sector with a systemic perspective.

60

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Annexes
Schedule of Taskforce Exchanges
#

Date

Event

LocationTheme1
22/02/2021
		

TF
VirtualVideoconference 1		

Review of 1 st Drafof Policy Paper2
22/03/2021
		

TF
VirtualVideoconference 2		

Review of 2 nd Draft
of Policy Paper

3
26/04/2021
		

TF
VirtualVideoconference 3		

Review of 3 rd Draft
of Policy Paper

4
31/05/2021
		

TF
VirtualVideoconference 4		

Review of 4 th Draft
of Policy Paper

5
05/07/2021
		

TF
VirtualVideoconference 5		

Review of final version
of Policy Paper

6
07-08 10/2021 B20 Summit
Rome; Virtual				

Review of 4 th Draft
Policy Paper

Distribution of Members
Country#Country#Country#Country

#

Italy

43

Belgium

5

Argentina

2

Poland1

United13
Kingdom		

United Arab
2
Emirates		Germany

2

Singapore

1

China

12

Canada

3

Ghana

1

Turkey1

France11

Brazil

2

India

1

Russia11

Indonesia

2

Japan

1

Saudi Arabia

7

South Africa

2

Netherlands

1

USA

6

Spain

2

Pakistan

1

61

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Name

Company/Organization

Country

DeputyItaly

Raffaello
Ruggieri

Chair
Carlo Messina

Managing Director andChief Executive Officer,
Intesa Sanpaolo

Co-Chairs

62

Timothy Adams

President & Chief
Executive, Officer,
Institute of International
Finance - IIF

International

AndrèsPortilla

Sujoy Bose

Managing Director &Chief Executive Officer,
National Investment
and Infrastructure Fund NIIF

India

PrasadGadkari

Robert S. Kapito

President and Director,
Blackrock

USA

Lubna Olayan

Chair of the Executive
Committee, Olayan
Financing Company OFC

Saudi Arabia

AndreasKallisXiaolun Zhang

Chairman, China
National Machinery
Industry
Corporation SINOMACH

China

Hao
Ping

John Denton

Secretary General,
International Chamberof Commerce - ICC

Australia

DamienBruckardB20 POLICY PAPER FINANCE & INFRASTRUCTURE

Name

Company/Organization

Position

Country

Members
Mark Abrams

Trade Finance Global

Managing Director

UnitedKingdom

Isaac Aggrey

African Social
Entrepreneurs Network

CEO

Ghana

Yassin Al Suroor

A'amal Group

President & CEO

Saudi Arabia

Gesap

Vice President

Italy

Ziad Albassam

Albassam Group

Chairman

Saudi Arabia

Carlos Alfaro

Alfaro Abogados
Argentina

Chairman

United Statesof America

Hessa Alsheikh

Raidah Investment
Company (Ric)

Director,
International Fixed
IncomeSaudi Arabia

Hanadi Alsheikh

Raidah Investment
Company (Ric)

Chief Strategy
Officer

Saudi Arabia

Bader Alswailem

Saudi Orix

Chief Executive
Officer

Saudi Arabia

Maria Anghileri

Eusider Group

Chief Operating
Officer

Italy

Emanuela Angori

Webuild

Head of Corporate
and InternalCommunication

Italy

Bernardo Arecco

Areccco Ingenieiria

CEO

Italy

Jean-JacquesBarbérisAmundiHead of Institutional
Clients Division &ESG Supervisor

FranceRodolphe Baron

Medef

Advisor at theInternational
Department

FranceEdward Barron

Aig

Head ofInternational
Government Affairs

UnitedKingdom

Al Saedan For
Development Co.

CEO

Saudi Arabia

Francesca Bognin

Rina S.P. A

Chief Financial
Officer

Italy

Alexander Bychkov

Investment Company Ic
Russ- Invest

President-General
Director

RussiaAlessandro
Albanese

MashaelBin Saedan

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B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Name

Company/Organization

Position

Country

Members

64

William Byrnes

Texas A&M University
School of Law

Elena Canale

French Insurance
Federation

International Affairs
ManagerFranceMaria Rosaria
CaputoIntesa Sanpaolo

CLO Area

Italy

Dario Casonato

DEGREA S.p. A

CEO

Italy

Charlotte
Clark

Association of British
Insurers
And Global Federation
Insurance Association

Director Regulation(ABI) and
Chair of the CapitalWork Group (GFIA)

UnitedKingdom

Tim Clausen

Hsbc Holding Plc

Head ofInternational
Regulatory Policy &Strategy

UnitedKingdom

Carla
ComarellaAmazonPublic Policy
Manager

BrazilStéphane Cossé

Covea

Director of Public
Affairs

FranceAndreaCostantini

Agrati Group

Executive Vice
President

Italy

Hegen Dai

China National
Chemical EngineeringGroup Corporation Ltd.

Chairman

China

Fanny Dastugue

Confederationof International
Contractors’ associations

Director General

FranceChris De Noose

Wsbi

Managing Director

Belgium

GianfrancoDell’Alba

ANIA

Senior adviser

Belgium

Pietro
Di LeoBanca Popolare Di Puglia
E Basilicata

Vice President

Italy

Daniele Diano

Diano Cementi S.P.A./
Unindustria Calabria

Board Member

Italy

Horacio Díaz
Hermelo

Uia

President

Argentina

Ugo
Dibennardo

Concessioni Autostradali
Venete- CAV S.P.A.

CEO

Italy

Professor,
United States
Risk Management, of America
International Tax

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Name

Company/Organization

Position

Country

Members
Angelica Krystle
Donat

Donati S.P.A.

Head of Business
Development

Italy

Chiara Dorigotti

Sea Prime

CEO and General
Manager

Italy

Evgeny Dorot

Jsc "Rzdstroy"

Deputy Director
General for
Innovative
Development

RussiaHugo DoyleIntesa Sanpaolo

Head ofInternational Public
Affairs

Italy

Riccardo Dutto

Intesa Sanpaolo

Head of
Infrastructure

Italy

Ahmed El Hadidi

First Abu Dhabi Bank

Head of legal CIB

United ArabEmirates

Nurgun Eyuboglu

Yapi Kredi Bank

Assistant General
ManagerTurkeyBochao Fan

Industrial andCommercial Bankof China Limited

Managerof International
Banking Department

China

Emanuela Farris

Italian Banking, Insuranceand Finance Federation(Febaf)Head of European
Affairs

Italy

Olivo Foglieni

Stemin Spa

President

Italy

Fabrizio
Fornezza

EumetraPartner

Italy

Farah Foustok

Lazard Gulf

CEO

United ArabEmirates

Pierfrancesco
Gaggi

ABI

Head ofInternational Affairs

Italy

Massimiliano
GalanteMetalgalante Spa

CEO

Italy

Generali

Chairman

Italy

Bettina Geisseler

Geisseler Law

Owner / Lawyer

Germany

Federico Ghella

Ghella S.P.A., ANCE

Vice President

Italy

ATM

Chair

Italy

Gabriele
GalateriGioia Ghezzi

65B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Name

Company/Organization

Position

Country

Members
Carlo Giorg

Amazon Web Services

Country Manager,
Italy

Italy

Peter Greiff

Banco Santander

Director of
Corporate Affairs

Spain

Xiangyang
Guo

China Beske Group Ltd.

Chairman

China

Flora Hamilton

Confederation of British
Industry

Director, Financial
Services

UnitedKingdom

Ted Hart

Legal & General Group Plc

Head of Public
Affairs & Policy

UnitedKingdom

Xiaoyuan Hong

China Merchants Group
LimitedAssistant General
Manager

ChinaCharles Johnston

Citibank

Sarfraz Khan

Kerten Hospitality

Business
Development
Consultant

Saudi Arabia

Nadezda Kirillova

Financial University Under
the Government of The
Russian Federation

Manager

RussiaTolga Koc

Anadolubank Nederland
Nv

Director /Operations
Department

Netherlands

Andrey L.
KostinVtb Bank PJSC

Chairman and CEO

RussiaHirofumi Kurata

Insurance Europe

National Expert

Belgium

Pasquale
Lampugnale

Sidersan Spa

CEO

Italy

Frederik Lange

Business at Oecd (BIAC)

Policy Manager andPrincipal Economist

FranceJianping Li

China Railway Group
LimitedDeputy Manager ofInternational
Business Division of
CREC

Dbs Bank Ltd

Managing Director,
Head of Energy,
Chemical & Infrastructure, Head of
Project Finance

Wee Seng Lim

66

Managing Director, United States
Global Government of America
Affairs

China

SingaporeB20 POLICY PAPER FINANCE & INFRASTRUCTURE

Name

Company/Organization

Position

Country

Members
Fang Liu

Trina Solar

Public Affairs
General Manager

China

Yue Liu

Bank of China

Team Head

China

OPUS Advisory Services
International Inc

OPUS - President
ESGv - Founding
Partner

CanadaAndrzej Malinowski

Employers of Poland

President

PolandDaniela Marilungo

Bank of America

Head of Public Policy
for EMEA

UnitedKingdom

Giorgio Marsiaj

SABELT

President and CEO

Italy

Kerstin Mathias

City of London

Regulatory Affairs
Director

UnitedKingdom

Enrique Medina

Telefónica

Chief Policy Officer

Spain

Giovanna MelandriSocial Impact Agenda perl'Italia

President

Italy

Maxim Merkulov

VEB.RFManaging director

RussiaCristina Mihai

Insurance Europe

Head of International
Affairs andPrudential Regulation

Belgium

Sergio Molisani

Snam

SVP - Finance,
Insurance and Tax

Italy

Futhi Mtoba

International Women
Forum South Aftica

Non-Executive
Director

South Africa

Radju Munusamy

PWC Indonesia/
IndonesianChamber of Commerceand Industry

PartnerIndonesia

Susan Neely

American Council of Life
Insurers

President and CEO United Statesof America

Alessandro Nesti

A..Menarini I.F.R. S.R.L.

Financial Activities

Steve Nicholls

National BusinessInitiative

VéroniqueOrmezzano

BNP Paribas

Alexander R
MalaketItaly

Corporate Director South Africa
Head of Environment
Head of Group
Regulatory Affairs

France67

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Name

Company/Organization

Position

Country

Members

68

Emanuele Orsini

Sistem Costruzioni Srl

CEO

Italy

Dan Ouimet

Futurpreneur Canada

SeniorVice-President,
External
Engagement

CanadaFabrizio Pagani

Muzinich & Co

Global Head of
Economics andCapital Market
Strategy

FranceRobert Patalano

OECD

Head of Division:
Financial Markets

FranceShailesh Pathak

L&T Infrastructure
Development Projects Ltd(Idpl)CEO

India

Giovanna Pelazzi

Argenta Soa Spa

Owner

Italy

Andrey Petrukhin

PJSC Gazprom NeftHead of Division,
Innovative
Development

RussiaStefano Pierini

Ferrovie Dello Stato
Italiane Spa

Director ofStrategies, Planning,
Innovation andSustainability

Italy

Christian Pierotti

Fédération Française De
L'assurance

Public Affairs
Director

BelgiumGerd Pircher

HSBC Italy

CEO HSBC Italy

Italy

Oleg Preksin

Association of Russian
BanksVice President &Board Member

RussiaLida Preyma

Bank of Montreal

Director, Global AML
Risk Management

CanadaDmitryPristanskov

Norilsk Nickel

Vice President

RussiaRoberto Race

Borsa Italiana

Senior Advisor

Italy

Tariq M.
Rangoonwala

Rangoonwala Group

ChairmanPakistan

Domenico Rapone

Eni Spa

Head of Financial
Services

Italy

Natalia
Reznichenko

VIS Group

Member of theBoard of NTC

RussiaB20 POLICY PAPER FINANCE & INFRASTRUCTURE

Name

Company/Organization

Position

Country

Members
Gianluca Riccio

Lloyds Banking Group,
And Business at OECD
(BIAC)

Risk Development
Director, and Vice
Chair FinanceCommittee at BIAC

UnitedKingdom

Francesco
Sciaudone

Grimaldi Studio Legale

Managing Partner

Italy

Agostino
Scornajenchi

TERNA Spa

CFO

Italy

Natalia Shtibina

Rosbank

RelationshipManager

RussiaRuslan Sigeda

Russian Direct
InvestmentFund

Counselor

RussiaStephen Simchak

American Property
Casualty Insurance
Association

Head ofInternational

United Statesof America

Alessandro
Somaschini

Easytech Srl

Director

Italy

Margherita
Stabiumi

Alfa Acciai

Owner

Italy

Francesco Tanzi

PirelliHead of Finance andRisk Management

Italy

Shaun Tarbuck

ICMIF

CEO

UnitedKingdom

Luiz Carlos Tavares

BRF

Global Corporate
Affairs Manager

BrazilFédération Nationale Des
Director of
Travaux Publics
International Affairs

FranceRichard Touroude

Hasan Turunc

Katsufumi Uchida

Turkish Industry andBusiness Association

Director of London
Representation

UnitedKingdom

Sumitomo Mitsui Banking Managing Executive
Corporation
Officer, Deputy
Head of Europe

Japan

Graciella
Universe

GMU Group

Chairwoman

Indonesia

Severine
Vadon-David

French Banking
Federation

Senior Advisor,
Public Affairs
Europe andInternational

FranceFabrizio Vettosi

VSL Club SpA

Director

Italy
69

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Name

Company/Organization

Position

Country

TELT Tunnel Euralpin Lyon
Turin

General Director

Italy

The City UkManaging Director

UnitedKingdom

Xiaogang Wei

ICBC (EUROPE) SA Milan
BranchGeneral Manager

Italy

DeborahWince-Smith

Council on
CompetitivenessPresident and CEO

UnitedStates ofAmerica

Beijing Yingke Law Firm

Executive
Chairwoman of
Yingke Global Board

Members
Mario Virano

Nicola Watkinson

Lin Yang

China

Qi YinMegvii Technology
Limited

Co-Founder and
CEO

China

Leon Yip

International Chamber ofCommerce UK

PolicyCoordinator

UnitedKingdom

Eric Zhang

Vanke Future City Lab

Vice President

China

Public Affairs
Director
Youxun Zhang

Liyan Zhao

70

China Export & Credit
Insurance Corporation

Head of International
Cooperation Team,International
Department

China

China Council for
the Promotion ofInternational Trade

Director

China

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Function

Name

Company/Organization

Coordination GroupMaria Rosaria Caputo,
CLO Area

Chair’s Staff

Hugo Doyle,
Head of International
Public Affairs

Intesa Sanpaolo

Donatella Ravenna,
CEO Staff
Federico Orsi,International Affairs OfficeFrancesca Brunori, Credit
and Finance Director
Susanna Armani, Credit and
Finance Department
Task ForceManager

Confindustria
Alessandra Greco,
Credit and Finance
Department
Salvatore Signati, Credit and
Finance Department
Jacopo Terrosu, Staff

B20 Secretariat
Silvia Lubrano, Staff

Knowledge
Partner

Mariagiovanna Di Feo,
Partner
Bain & Company
Carlo Farina, Associate
Partner

ScientificPartners

Rosa Cocozza,
Full Professor

Università degli Studi di Napoli
Federico II

Fabio Pammolli,
Full Professor

Politecnico di Milano

Chiara Frigerio, Associate
Professor

Università Cattolica del Sacro
Cuore

Elena Beccalli, Full Professor
Giuseppe Corvino, Associate
Professor
Università Bocconi
Edoardo Croci,
Senior Research Fellow

71

B20 POLICY PAPER FINANCE & INFRASTRUCTURE

Function

Name

Company/Organization

Coordination Group
Scott Hanson, Principal

IFAC - International Federationof Accountants

David Madon, Principal

Network
Partners

Sebastian Welisiejko, Chief
Policy Officer

GSG - The Global SteeringGroup for Impact Investment

Raffaella De Felice, NAB
Community Manager
Fabrizio Vettosi, Director,
VSL Club SpA

ICS – International Chamber of
Shipping

John Denton, Secretary
GeneralDamien Bruckard,
Deputy Director, Trade andInvestment

72

ICC- International Chamber ofCommerce

An initiative byKnowledge partners

Network partners

Scientific partners

74