Financial regulators play a crucial role in implementing the Paris Agreement and should be involved in national long-term planning and policy development to mitigate the effects of the climate emergency, speakers said at a PreCOP25 panel discussion in San Juan.

“Financial regulators and policymakers are a part of the solution and there is strong will to engage in the on-going processes related to climate change,” AFI Deputy Executive Director Norbert Mumba emphasized at the side event on 9 October.

The panel shone a spotlight on AFI’s newest working group, Inclusive Green Finance (IGF), and its potential to help build resilience to climate emergency across the network and beyond.

Underscoring the need for immediate global action was Christina Rokoua-Qio, Reserve Bank of Fiji’s (RBF) manager of financial system development, who spoke about the risks that climate change pose to financial stability and, in turn, the mandate of central banks.

RBF is among IGF’s most-active supporters, having joined other members of AFI’s Pacific Islands Regional Initiative earlier this year in committing to promote and implement IGF policies “targeted at individuals and micro, small and medium enterprises with the aim to build resilience and enable mitigation”.

“We see ourselves as taking the lead for the private sector to tackle climate change,” she added.

Reiterating the need for financial institutions to adopt a more active stance was Genaro Segura, director general of regulation at the Superintendencia General de Entidades Financieras (SUGEF) Costa Rica.

“The financial system is currently mostly reactive to negative climate impacts,” he said, adding “that is why SUGEF has started developing ways financial institutions can include climate risk into their operations.”

He also advocated for stakeholders in the financial sector to incorporate national long-term commitments and de-carbonisation plans into their policies and regulations. Segura also outlined SUGEF’s recent efforts to define its green products and noted the importance of compiling data on green products in the banking sector.

SUGEF will provide further insight on IGF-related policies at the upcoming Global Green Finance Conference, which is being co-hosted by Bank Al-Maghrib (BAM) and AFI in Rabat on 30 October. Around 90 participants are expected at the event, which aims to provide a platform for learning and engaging in regional and global topics on climate change considerations in the financial sector and IGF.

Both RBF and SUGEF are members of the IGF working group.

Amid the push for greater involvement among central bank and other financial institutions in climate change mitigation efforts, AFI’s Mumba noted the need to involve all stakeholders.

“We cannot do it alone. Very strong national coordination mechanisms are needed in order to combat climate change,” he said.

Moderating the session was Alexander Verbeek, director at the Institute for Planetary Security, who was also joined by AFI’s head of IGF Johanna Nyman.

Key takeaways from the panel will be included in the official PreCOP25 conclusions and presented at the Santiago Climate Change Conference, known as COP25, later this year.

The IGF workstream is part of the International Climate Initiative (IKI), which is supported by the German Federal Ministry of the Environment, Nature Conservation and Nuclear Safety (BMU).