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February 18, 2021

WASHINGTON DC – Today the Institute of International Finance, as a member of the U.S. Climate Finance Working Group, published Principles for a U.S. Transition to a Sustainable Low-Carbon Economy.

The financial services industry has been active on climate priorities for decades, helping clients reduce emissions and developing new business models. The Principles, developed in coordination with 10 other leading financial services trade associations representing the perspectives of banks, investment banks, insurers, asset managers, investment funds, pension funds and other financial intermediaries, build from that experience to create a useful policy framework for the transition to a low-carbon economy.

“Climate change is one of the great global challenges of our time, and the financial services industry has a key role to play in financing the transition to a sustainable economy,” said Tim Adams, IIF President and CEO. “We hope the policy framework created by these Principles will catalyze a pragmatic transition to a more sustainable, more inclusive, low-carbon economy.”

The shift to low-carbon growth will entail a significant transformation of the U.S. economy, and we believe that a clear long-term policy framework, based on the following Principles, is essential to provide the necessary foundation to finance the transition:

  • Set science-based climate policy goals that align with the Paris Agreement
  • Increase and strengthen U.S. international engagement
  • Provide clear long-term policy signals that foster innovation in financial services
  • Price carbon and leverage the power of markets
  • Minimize costs and support jobs in the transition  
  • Foster international harmonization of taxonomies, data standards and metrics
  • Promote more robust climate disclosure and international standards
  • Ensure climate-related financial regulation is risk-based 
  • Build capacity on climate risk modeling and scenario analysis
  • Strengthen post-disaster recovery, risk mitigation and adaptation

For more on the Principles, please see the full paper: “Financing a U.S. Transition to a Sustainable Low-Carbon Economy.” You can also read the aligned and complementary statement on climate finance by the IIF’s Board of Directors here.

 

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About The U.S. Climate Finance Working Group:

The U.S. Climate Finance Working Group is comprised of 11 financial services trade associations that have come together to exchange ideas, share knowledge and inform the conversation related to climate and sustainability topics relevant to their respective areas of the financial services industry and the broader corporate sector.

Working Group members include American Bankers Association, Bank Policy Institute, CRE Finance Council, Financial Services Forum, Futures Industry Association, International Capital Market Association, Institute of International Bankers, Institute of International Finance, International Swaps and Derivatives Association, Investment Company Institute, and Securities Industry and Financial Markets Association.

About the Institute of International Finance:

The Institute of International Finance is the global association of the financial industry, with more than 450 members from more than 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks.