Capital markets can play a crucial role in filling the financing gap for the achievement of the Sustainable Development Goals (SDGs) and the Paris Agreement. In the last few years, increasing awareness of urgency of the SDGs and of the risks associated with climate change has led to accelerating growth of sustainable finance and a surge in sustainability-themed financial products.
In response, governments in both developed and developing countries have been stepping up their efforts to put the necessary regulatory framework and policy measures in place. These aim to create a viable ecosystem to support the growth of sustainable financial markets and magnify their impact on sustainable development.
However, the proliferation of regulations and policy measures across countries has led to fragmentation and lack of consistency and interoperability among regulations and policies, making it increasingly difficult for investors to navigate. Meanwhile, many developing countries, which remain largely unserved by sustainable finance, face technical and capacity gaps in the development or adoption of new regulations.