Financing Mechanisms for Greener Outcomes
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For the fourth session, we explored innovative financing mechanisms for improving environmental outcomes.
The Value in public finance peer learning group provides a platform for those in government, academia, private and other sectors to discuss and explore ways to improve value creation of public expenditure. This peer learning group aims to create a community of individuals and organisations interested in improving public finance and how economies perform. We are an inclusive group of thinkers and practitioners and would welcome international engagement on the above themes as well as any others.
The group meets every 2 months for an hour-long discussion and is co-organised by the GO Lab and Chartered Institute of Public Finance and Accountancy (CIPFA). Jeffrey Matsu and Dr Mehdi Shiva co-lead the sessions.
Session Overview
Amidst competing policy priorities and budgetary pressures, how can we better sustain the momentum for investment in the environment? In this Value in Public Finance PLG meeting, we explored various financing mechanisms for greener outcomes.
We were joined by experts from organisations such as the OECD to discuss financing mechanisms for greener outcomes. We heard from stakeholders involved in innovative initiatives including South Africa's Green Outcomes Fund.
Speaker Panel
Priscilla Boiardi, Private Finance for Sustainable Development, OECD
We began the session by discussing the rationales for mobilising private finance. Considering the post-pandemic annual financing gap of $3.7 trillion for sustainable development goals (SDGs), private finance is critical for achieving green and inclusive growth.
Kat Deeney, Head of Environmental Planning, Plymouth City Council
We then reflected on the experience of a local authority in England to explore how place-based climate action can be financed. Comprehensive appraisal of nature-based assets and better alignment between public and private financing sources through the emerging green finance markets was considered important for delivering triple bottom line outcomes.
Jason Van Staden, Project Manager, Bertha Centre (University of Cape Town)
Finally, we explored South Africa’s Green Outcomes Fund (GOF) as a means to scale investment into green outcomes.
Discussion Points
- [Challenges in reporting and measurement] The PLG community highlighted that measurement was a common issue across climate initiatives, but challenges vary across domains. For instance, reduced energy usage is relatively straightforward to measure given the availability of widely accepted metrics, while other outcomes such as sustainable use of land may invite conflicting interpretations. Speakers suggested that the standardisation of reporting and metrics can also be hindered by the varying level of SMMEs’ maturity.
- [Harmonising multi-level investment] Relatedly, the PLG community and speakers acknowledged that aligning investment at macro, meso and micro levels was important for robust measurement and the effective use of resources. In this context, Mexico’s sovereign SDG bond can be seen as an example of leveraging global guidelines to map and finance national, regional, and local outcomes.
- [Interlinkage between green and social outcomes] The PLG community and speakers highlighted the importance of considering green and social outcomes together. Although some of the social outcomes lend themselves less easily to measurement and quantification compared to environmental outcomes, their interlinkage was acknowledged as an opportunity to strengthen financing mechanisms and improve community outcomes.
- [Importance of learning from others] The PLG community noted that there were relevant resources and international experience of cross-sectoral collaboration from which we could learn. These resources and experience include the public-private partnerships guide developed by World Bank and other regional development banks, HM Treasury’s Green Book in the United Kingdom, as well as experience of (now independent) UK’s Green Investment Bank.