ESG finance and climate action: CDP plays leading role at Finance in Common 2023

ESG finance and climate action: CDP plays leading role at Finance in Common 2023

Promoting ESG investment, protecting climate and biodiversity, developing small and medium businesses, and financial inclusion.  These are the key topics of the fourth Finance in Common Summit (FiCS), a global initiative launched in 2020 that aims to get the global financial system working towards the Sustainable Development Goals (SDGs) and the Paris Agreement on climate and environmental protection.
The Finance in Common Summit 2023 took place in Cartagena, Colombia, hosted jointly by the Inter-American Development Bank (IDB), the Colombian Development Bank (Bancoldex) and the Latin American Association of Development Financing Institutions (ALIDE). Over 500 Development Banks (DBs) are part of the FiCS initiative, holding assets worth more than US$23 trillion and with the ability to mobilise US$2.7 trillion each year, equal to about 10% of global investments. In recent years, it has also engaged a broad array of participants, including regional networks, international organisations, private sector entities, academic and research centres, and community organisations.

At the FiCS, CDP led many talks for the attendees. These covered topics like aligning public and private finance with Sustainable Development Goals (SDGs), growing green finance in emerging and developing markets, and public and private financing of sustainable infrastructure.
CDP also made numerous commitments at the fourth edition of the Summit, focusing in particular on climate and environmental issues, including joining the “Global Green Bond Initiative” and the “Call to Deliver Positive Action For The Ocean”, and renewing its commitment to the “Water Finance Coalition”.

Paolo Lombardo, CDP's Director of International Development Cooperation, said: “Over the last few years, CDP has made a big effort to align its strategy and actions with the Sustainable Development Goals, promoting initiatives that are increasingly tied to sustainability, not just in economic terms but in environmental, social and governance terms, too. We're choosing and assessing these through a fresh approach that weighs up risk, return, and impact. This process intersects with the growth in global development finance. In recent years, CDP has used its 170-year knowledge to structure innovative financial transactions in emerging and developing economies. This is done through a shared partnership approach that promotes sustainable and inclusive growth of local areas while also strengthening economic links between Italy and partner countries. This work also translates into the many deals made over time within the FiCS coalition, focusing on safeguarding the planet and its people.

Joining the "Worldwide Green Bond Scheme"

Cassa Depositi e Prestiti (CDP) has signed a strategic partnership to provide technical assistance for the development of green bonds in Latin America and the Caribbean. The agreement was formalised in the presence of the European Commission and together with the Spanish Agency for International Development Cooperation (AECID), the French Development Agency (AFD), the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), the Green Climate Fund (GCF), the German Development Bank (KfW), the Inter-American Development Bank (IDB and IDB Invest).

This new strategic partnership is part of the Global Green Bond Initiative (GGBI) technical assistance programme announced by European Commission President Ursula von der Leyen in June 2023.

The initiative will make it easier for institutional investors to channel private funds into climate protection projects in EU partner countries, boosting their capital access. Through the new partnership, member institutions pledge to give technical help to green bond issuers in emerging and developing economies, simultaneously drawing in private investors. The fund could potentially trigger green investments worth $15-20 billion.

Highlighting the significance of CDP's membership of the GGBI, CDP's Director of International Development Cooperation, Paolo Lombardo, stated: “The Global Green Bond Initiative aims to draw private investors to green bonds. These fast-evolving financial instruments open doors for potential new issuers who might not otherwise reach capital markets to offer their green bonds. So, we can say that the GGBI is a very inclusive tool, which CDP is proud to support.”

Developing a shared plan to protect the oceans

The initiative “A Call to Deliver Positive Action For The Ocean” has been launched by Cassa Depositi e Prestiti (CDP) in partnership with several international banks. These include the French Development Agency (AFD), the Asian Development Bank (ADB), the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), the West African Development Bank (BOAD), the Latin American and Caribbean Development Bank (CAF), the Inter-American Development Bank (IDB), and the German Development Bank (KfW). Their goal is to create a "Blue Finance Roadmap", a joint action plan to boost investments in protecting the oceans.

Development finance institutions can play a key role in the protection of marine ecosystems by supporting biodiversity and financing initiatives to protect marine areas. They can also help develop eco-ports and projects focused on the circular economy as well as other emerging sectors including sustainable aquaculture, mariculture and blue biotechnology. The financial institutions in this new coalition have promised to present the Blue Finance Roadmap at the next United Nations Ocean Conference in France in 2025.
Renewed pledge to boost investment in the water industry

In 2021, at the Finance in Common Summit in Rome, top global development finance bodies – including the host CDP – launched the “Water Finance Coalition” with the shared aim of boosting investment in water and sanitation, catalysing both public and private financing.

At the Cartagena Summit, CDP and other Water Finance Coalition members renewed and reinforced their pledge to boost investment in the water sector. They acknowledged the urgent need to mobilise more funding in this area and the key role public development banks can play, promoting water security for everyone.
Investing in eco-friendly infrastructure to speed up the green transition

At the Cartagena FiCS summit, CDP and the D20 Long-Term Investors Club (D20-LTIC) also oversaw the coordination between PDBs and global financial institutions on sustainable infrastructure investments. The aim was to encourage new funding solutions within the G20 and G7 – especially considering Italy's presidency in 2024 – to close the gap between private investors' desire for infrastructure and the structural lack of good infrastructure projects. The overall goal is to create not just financial returns, but also social and environmental benefits in emerging and developing economies.