The new Global Green Finance Index, or GGFI, is the joint project of Z/Yen, the London-based research organisation behind the decade-old Global Financial Centres Index, and Finance Watch, a Brussels-based non-profit organisation that is dedicated to making financial services work for the good of society.
In a statement announcing the new index, Z/Yen and Finance Watch explained that the GGFI will rank the world’s financial centres “according to perceptions of the quality and depth of their green finance offerings”.
Among the findings of their inaugural report is the fact that financial centres in Western Europe appeared to outperform those in other regions; and that, perhaps not surprisingly, smaller centres with a strong green focus, such as San Francisco and Hamburg, tended to outperform larger centres such as New York and Frankfurt.
The researchers focused on what they said were the leading green financial centres in each region — London, San Francisco, Shanghai and Shenzhen, Johannesburg and Cape Town, Mexico City, and Moscow.
Among the report’s other key findings:
• Paris, Frankfurt and New York lead the centres most cited as likely to become more significant over the next two to three years
• Financial centres that have shown leadership in green finance policy are expected to gain in significance, “with Paris at the top of this list”
• Among the areas seen as having both a high impact on sustainability as well as high interest to respondents are renewable energy investment; so-called “green bonds”, and sustainable infrastructure finance
• Disinvestment from fossil fuels was found to have a high impact on sustainability but proved to be of little to those surveyed, suggesting, the researchers note, “room for policy change”
Room for growth
According to the researchers, the GGFI’s rankings are likely to change in future editions, “as they are based on tightly clustered scores in the range of 322 to 437 points out of 1,000”.
The results also show, they say, that their research suggests plenty of room for growth in the size and quality of green finance; and that the main drivers of green finance appear to be supportive policy measures, as well as investor demand.
Michael Mainelli, executive chairman of Z/Yen, said the core of the GGFI was “a perception survey which observes and promotes change where it matters most – in people’s minds”.
“The more we can get people talking about a sustainable transition, the quicker it will happen,” he added.
“The high level of interest in GGFI 1 is a step in that direction.”