The Finance in Common Summit will be the first ever meeting of all 450 public development banks, including the Multilateral Development Banks, as well as regional and national development banks from across the globe. The summit takes place on the 11th and 12th November, and is organised by the AFD (French Development Agency), with the backing of President Macron and UN Secretary General Gutteres. It was due to take place in person in Paris, but unsurprisingly has been moved online due to the pandemic.
The summit organisers are aiming for two outcomes. Firstly, to agree and publish a joint declaration from all of the public development banks ‘stating their willingness to contribute to the recovery and align with sustainable finance principles’ and, secondly, to build a community of public development banks to continue to work together beyond the summit.
Advocacy groups have described this as an opportunity for public finance institutions to take bold action and commit to aligning their investment policies with climate and development goals, including aligning with the Paris Agreement, biodiversity protection and the Sustainable Development Goals.
Why do public development banks’ actions matter?
The public development banks together spend USD$ 2 trillion per year – representing 10% of all investments in the world annually – so how they spend public money is hugely important. With vast amounts of public money being spent as a result of the COVID-19 crisis, decisions made now and at the summit about how to use these funds will have long-term consequences. Decisions, therefore, must include the acceleration of a sustainable and fair recovery that simultaneously tackles the climate, economic and social crises.
President Macron spoke of the role he sees for Finance in Common, highlighting the importance of climate and biodiversity, along with health and development, being at the heart of the response to Covid-19. In a recent statement, Macron said we need to get there ‘collectively, and to do this we must now give ourselves the means to do so, by collectively organising the decisive role of our development banks’.
What are the expectations for the summit?
Civil society organisations are working together to call for concrete actions at the summit which foster a sustainable, just recovery to Covid-19 and that also promote social, gender and racial justice, community care, health and well-being, human rights, workers’ rights and the fight against inequality.
The climate crisis has not gone away during the Covid crisis. To avoid catastrophic climate change, we need to keep global warming below 1.5°C. Crucially, this means we need to stop burning fossil fuels. We also know that the scaling up of investments in renewable energy, and the expansion of finance for universal energy access will support sustainable development for the most vulnerable. For example, it will help reduce air pollution and health problems, and improve services such as health clinics and hospitals.
Public finance has a responsibility to lead the way, to demonstrate what leadership on climate looks like and to finance the shift to a sustainable, renewable global energy system which benefits all.