Luigi Federico Signorini: G20 Sustainable Finance Working Group
Private Sector Roundtable
Welcome address by Mr Luigi Federico Signorini, Senior Deputy Governor of the Bank of Italy, at
the G20 Sustainable Finance Working Group Private Sector Roundtable, online event, 17 May
2021.
* * *
Welcome, and a good day to you all.
I am happy to open the Private Sector Roundtable, an event promoted by the G20 presidency
and by the Chinese and American co-chairs of the Sustainable Finance Working Group. The
Roundtable will focus on the role of finance in helping fight climate change and promoting
lowcarbon transition.
The G20 Finance Ministers and Central Bank Governors recently recognised the need to 'shape
the current economic recovery by investing in innovative technologies and promoting just
transitions toward more sustainable economies and societies'.
Low-carbon transition is urgent and must be accelerated: the later we act, the greater the costs.
It requires an unprecedented and unremitting effort. While quantitative estimates vary, the
investments needed for transition are certainly huge; they need to be sustained for a long time.
Governments have a central role in that they need to point the way by adopting an appropriate
policy framework. A clear and credible path for government regulatory and fiscal action is also a
prerequisite for efficient choices on the part of private finance.
Indeed, while many governments will directly invest their own money in many countries and
MDBs will play their part, it is likely that the private sector will be called upon to finance most
transition investment. There will be no transition without a general awareness of the need for it
and a willingness, even a desire, to finance it.
There are in fact quite a few encouraging signs. Since last year, we have seen an explosion of
'net-zero commitments' in the private sector-though such commitments (I am told) are still
confined to one sixth of publicly listed companies globally. At the same time, the appetite of
ultimate investors and asset managers for 'green' investment is growing fast. I am sure many in
the audience will have a clear perception of this fact.
However, the path is still fraught with difficulties. On the market side, while sustainable finance is
increasingly popular, it suffers from a lack of clear definitions and standards.
'Greenwashing' is a danger; good data, an agreed taxonomy, and adequate company disclosure
are necessary. Global consistency is important, as fragmentation of standards across
jurisdictions is confusing for investors and costly for companies. Standards are currently being
drafted in many countries and regions. It is therefore important to strive for an early global
understanding, before national choices become entrenched.
To some extent, every country will choose its own path to decarbonise, depending on national
circumstances. However, climate change knows no boundaries. Tackling it is a global challenge
that calls for strong international cooperation. With appropriate coordination, every country's
effort is reinforced by the actions of all the others.
That is why the Italian Presidency of the G20 chose climate change as one of its key priorities,
with a focus on data and disclosure in the Finance track. We are also happy that unanimous
agreement was reached at the latest meeting of FMs and CBGs to upgrade the Sustainable
Finance study group to a working group.
In order to start this Roundtable with a clear picture of the available options, we asked the
International Energy Agency to share their views on how the transition is evolving from a real
economy perspective. This is important for identifying the right policies to achieve climate
objectives, while at the same time ensuring energy security and affordability for all. It is
particularly important in the context of today's Roundtable to clarify the role of the private sector.
I am now pleased to introduce Mechthild Wörsdörfer, Director of the Sustainability, Technology
and Outlooks department of the International Energy Agency, as our keynote speaker today. Ms
Wörsdörfer will present the main results of the IEA's new flagship publication, 'Net Zero in 2050:
A roadmap for the global energy sector', which will be out tomorrow.
I wish you all a very instructive and constructive discussion. Ms Wörsdörfer, the floor is yours.