Sabine Mauderer: Opening remarks at NGFS Finance Day Event at
COP29
Opening remarks by Dr Sabine Mauderer, Vice-President of the Deutsche Bundesbank,
at the global network of central banks and supervisors for Greening the Financial
System (NGFS) Finance Day Event at COP29, Baku, 14 November 2024.
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Good afternoon, ladies and gentlemen,
On behalf of the global network of Central Banks and Supervisors for Greening the
Financial System (NGFS), I am delighted to welcome you to this exciting event. First of
all, I would like to thank our colleagues from the German Federal Government for
providing us with this space. I am very grateful for this opportunity to discuss recent
developments, challenges and opportunities in green finance.
In the run-up to COP29, I heard one question many times: "Will Baku be the Finance
COP?" I find this question quite odd. Because in my view, every COP is Finance COP.
When we talk about the green transition, we must talk about how to finance it.
Fossil fuels have driven industrial development and powered many of our economies
for two centuries. Weaning our economies off of coal, gas and oil requires a
fundamental transformation. The technical solutions to decarbonise economic activity
are on the table but we are not yet channelling enough capital into these solutions. To
replace fossil-fuel driven plants, machinery and engines, large-scale investment is
needed across the world.
So, how much money are we talking about? The Climate Policy Initiative (CPI)
estimates that annual climate finance investment of between $5 trillion and $11trillion
1
would be needed - starting now - to keep global warming below 1.5 degrees. We will
not find these amounts in public coffers alone, no matter how deep we dig. The financial
system as a whole will need to be involved.
According to the London Stock Exchange, financial markets currently provide $250
2
trillion in credit and equity. In other words: the financial system has the means to
mobilise the necessary capital. The trillion dollar question is: how can this capital be
unlocked to finance the green transition? How can we create incentives for financial
markets to shift the trillions?
Article 2.1.c of the Paris Agreement reflects this when it calls for "making finance flows
consistent with a pathway towards low greenhouse gas emissions". The Paris
Agreement and Article 2.1.c in particular was a key reason for the establishment of the
NGFS in 2017. Back then, we set out to understand how climate change and climate
policy will affect the financial system and, on the other side of the coin, how the financial
system affects climate change and climate policy. We also aimed to understand how
central banks can contribute: as guardians of price and financial stability, and as
catalysts for developments in the financial system.
A few years later, the NGFS has grown into a global network with 141 members. So,
this is a good time to revisit these questions. And I am very happy that we managed to
bring together so many different stakeholders to do that today: central bankers
alongside representatives from the financial sector, the real economy, civil society, and
international organisations.
Let me briefly run you through our agenda and what we have planned for the next three
hours. We will have an exciting discussion about the enabling role of regulation and
supervision on the way to a greener financial system. I am looking forward to the
insights that this will provide. This is a crucial topic in particular for those of us with
responsibilities for supervising financial institutions.
We will also explore what insights the NGFS can offer to the financial sector more
broadly. The NGFS scenarios are now widely used by both the public and private
sectors to understand the economic and financial impacts of climate change.
A few days ago, we published a new update of these scenarios, based on the most
recent science and new data. The scenarios underline the economic benefits of a timely
and coordinated transition, as opposed leaving climate change unmitigated.
Under current policies, we risk losing up to almost 15% of global GDP to the physical
impacts of climate change.3
In addition to this, we will take a closer look at climate data, with a presentation of the
upcoming NGFS Data Directory 2.0.
The directory is going to provide a crowdsourced catalogue of well over 700
climaterelated datasets. This project underscores our commitment to improving access to
climate data.
We will conclude this afternoon with a high-level panel that will delve into the big
questions I touched upon earlier. Where do we stand on the way to a greener financial
system? Are the trillions shifting?
But first, I am very happy to welcome Mr Bo Li. Bo is Deputy Managing Director of the
IMF. He is responsible for the IMF's work on about 90 countries and a wide range of
policy issues.
It is a real honour to have him here. With his immense expertise he is perfectly
positioned to set the scene for our discussions by connecting the challenges of climate
change, development and transformation needs with the financial sector. Dear Bo,
thank you for joining us. The stage is yours.
1
Climate Policy Initiative (2024): Top-down climate finance needs, 31 May 2024.
London Stock Exchange (2024): The size of global markets 2024 in charts .
3
Network for Greening the Financial System (2024): NGFS climate scenarios for
central banks and supervisors, 5 November 2024.