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Across the world, governments, investors, companies, and other institutions have begun to understand that transitioning to an environmentally and sustainable society and economy is urgent.

In the Caribbean, we believe we have more urgent needs – food and shelter for instance, in the face of failing economies or rising storm seasons – and do not understand how sustainable finance could possibly be helpful.

To repeat, sustainable development is defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. In 2015 members of the UN agreed on the UN 2030 Agenda, including a set of specific sustainable development goals (SDGs) to be achieved by 2030. The SDGs include environmental (climate is one) as well as social dimensions.

At present the world is not on track to achieve the SDGs by 2030. For developing countries alone, the UN estimates that the financing gap to achieve the goals is US$2.5-3 trillion a year! Gaps are certainly not limited to developing countries. In the four years preceding the covid19 pandemic, nearly a quarter (24 per cent) of the EU working-age population found themselves at some point below the at-risk-poverty threshold.

In 2018 the EU launched a major action plan to direct private capital towards financing sustainable growth.

In 2019 the EU Commission adopted and in 2020 the European Parliament approved the European Green Deal, which requires the EU to:

• Reach net-zero greenhouse-gas (GHG) emissions by 2050;

• Decouple economic growth from resource use;

• Leave no person and no place behind.

The OECD (Organisation for Economic Co-operation and Development) estimates that we need to invest US$630 billion a year worldwide for the next ten years in order to have a 66 per cent chance of limiting the temperature increase on the earth’s surface to below 2C.

It is clear that these transformations and investments require collaboration between governments and private sectors to mobilise their full capacities.

The European Green Deal Investment Plan is based on three dimensions:

• Financing: mobilising at least €1 trillion of sustainable investments until 2030. This will be composed of both public and private investments.

• Enabling: providing incentives to unlock and redirect public and private investment. To do this, the EU is providing tools for investors by placing sustainable finance at the heart of the financial system.

• Practical support: the EU Commission provides support to public authorities and project promoters.

These are the four main components of the current EU regulatory framework for sustainable finance:

1. The Sustainability-Related Disclosures in Financial Services Sector (SFDR) (Regulation 2019/2088 adopted in 2019, in force since March 2021): this requires entities in the financial markets to publish information on:

(i) policies for identifying and prioritising sustainability indicators and prin