Conference proceedings

Conference proceedings

Opening remarks and Keynotes: Green Finance and SMEs – The Same Path to Resilience and Sustainability

Opening Remarks 
 
Makhtar Diop, Managing Director and EVP, International Finance Corporation (IFC) 
  • We need contribution from SMEs to help us reach our sustainability goals. 
  • Individually not a major source of greenhouse gases but collectively account for a significant part of emission in many countries 
  • SMEs are key to fully achieving the SDGs at the base of the pyramid 
  • The economic cost of the pandemic (job loss, business closure and supply chain disrupted) needs to be addressed. In the wake of Covid-19, the need for green financing is greater than ever. 

Keynotes
 
Vivek Pathak, Director and Global Head of Climate Business, International Finance Company (IFC) 
  • Climate change is the most critical issue of our time. It is irreversible and there is no vaccine for it. It threatens the lives of millions and SMEs are at particular risk because they don’t have the resilience to bounce back easily.
  • SMEs represent almost 50% of employment and it is impossible to achieve SDGs without them
  • Main challenge: Small entrepreneurs don’t realize that collectively they contribute to the global warming. They need to be aware of the critical role they can play and the financial community should work towards raising their awareness
  • The focus today is still on large firms, whether we are talking about DFI or commercial banks. Global capitals don’t flow to SME
  • We need to collectively work with all stakeholders on how do we green the domestic financial sector to make a difference for the SMEs
  • IFC commitment: climate change is a critical pilar of investment policy
  • Align with Paris agreement by 2025 
  • Help decarbonize our clients (in particular manufacturing)
  • Grow climate related investments to an average of 35% by 2025
  • Capital market front: first green bond issued 10 years ago and already 10 billion USD issued through that vehicle
  • Advisory services portfolio focusing on greening financial institutions: portfolio of 29 billion USD 

 

Dr. Barbara Buchner, Global Managing Director, Climate Policy Initiative, one of the 20 most influential women in climate change.

 

  • Global analysis firm that helps governments, business FIs, drive economic growth while fighting climate change 
  • Annual tracked climate finance globally has been ½ Trillion and increased to 600 BN dollar before Covid, but falling short of the need: there is a 1 trillion USD gap in climate finance 
  • “Covid has shown us trillions can be mobilized quickly (in climate finance) when there is leadership and political will to do so” 
  • After a decade of work in climate finance there are still significant data gaps, need more robust tracking and data, no reliable data on investments to SMEs 
  • Call to Arms 
  • Start tracking and reporting this data: “What you can’t measure you can’t manage.” 
  • One barrier to increase support to sustainable SMEs: SMEs operate on margins or outside formal sector 
  • So may lack access to finance, markets, equity, insurance, linkages, technology etc. 
  • 3 Success factors for scaling up sustainable finance 
  • Governments have to create good policies to lead the way 
  • Use public finance and public resources wisely 
  • Entire financial system needs to mainstream this into their operations 
All of these together can mobilize climate finance to SMEs, and supporting SMEs to move to more sustainable and resilient sectors 
Sustainable Finance