During the opening day of European Microfinance Week today, roughly 75 members and potential members of the Green Inclusive and Climate Smart Finance Action Group met in-person in Luxembourg – and remotely – to discuss strategies for increasing access to finance that helps people with low incomes to adjust to and reduce climate change. Co-chair Natalia Realpe Carrillo argued, “This is not something extra; this responsible finance!” She went on to describe the Action Group’s work to: publish a glossary of terms for those just getting started in green lending; offer seven related training modules; continue an ongoing webinar series, which is also available on-demand; publish a library of related documents; update the Green Index to its third version; and build the seventh dimension of the Universal Standards for Social Performance Management.
Referring to the need to discourage people from continuing in polluting enterprises, Howard Miller of the Center for Financial Inclusion (CFI) brought up the need to work on the question: “How can we help people transition to new livelihoods?” CFI is focusing on three areas of the climate finance challenge: (1) potential impact pathways, including identifying sub-groups of clients that can benefit from climate finance; (2) product innovations, such as merging climate finance with the work of conservation organizations – the US-based nonprofit Nature Conservancy being one example; and (3) how funders and policymakers can encourage more financial services providers (FSPs) to offer green finance.
When a participant asked the group what organizations are funding technical assistance to help FSPs looking to offer climate finance, representatives of several funders stated that they are doing so: ADA, GIZ, Grameen Credit Agricole Foundation and Incofin.
In discussing ideas for the Action Group to focus on during 2023, the group pondered issues such as how to support FSPs that are just starting to offer climate finance and whether there are new risks that green finance entails, including risks relating to client protection.
This feature is part of a sponsored series on European Microfinance Week, which is taking place in Luxembourg and online through November 18. MicroCapital has been engaged to report on the conference each year since 2012.
Additional Resources
The Green Index 3.0 Digital Solution
https://hedera.online/gicsf_ag_tools/green-index-digital.html
European Microfinance Week 2022
https://emw2022.eu
European Microfinance Platform (e-MFP) Action Groups
https://www.e-mfp.eu/action-groups
European Microfinance Award
https://www.european-microfinance-award.com
MicroCapital coverage of European Microfinance Week since 2012, including the European Microfinance Award
https://www.microcapital.org/category/european-microfinance-week/
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