Swiss Sustainable Finance has released a report on "Financing the Low-Carbon Economy" presenting a range of finance instruments to support the transition to a low-carbon economy.
The report was prepared by Swiss Sustainable Finance in cooperation with 44 authors from its network and a high-level steering committee and it consists of a compendium listing 16 finance instruments and approaches for a climate-friendly economy and presents the instruments' practical implementation through 8 case studies.
The reports looks also at the effectiveness of Swiss environmental legislation which has an influence on the success of the financial solutions listed.
An assessment of areas for urgent action is also presented including:
- filling data gaps that currently exist in the areas of sustainability and climate alignment,
- establishing clear definitions and standards for sustainable investments and creating targeted education and training on the topic,
- sending the right CO2 price signals in the real economy with the aim of supporting an efficient use of such financing solutions, and
- offering incentives or systematically reducing investment risks.
The report aims at inspiring financial players in Switzerland and beyond to further promote low-carbon finance solutions that support the transition to a low-carbon economy.
It is widely acknowledged that introducing a price on carbon represents a crucial precondition for filling the current gap in low-carbon investment. However, as this paper argues, carbon pricing in itself may not be sufficient.