Western European And US Centres Lead The World In Green Finance, Report

Despite making huge progress no Asian financial hub made it into the top ten of the 11th edition of the Global Green Finance Index (GGFI).

The GGFI evaluates green finance offerings from 86 financial centres and serves as a measure of the development of green finance for policy and investment decision-makers.

Singapore is the highest-ranked Asian financial centre in 11th place with Seoul in 15th and Shanghai in 20th.

The index is created by combining questionnaire assessments from financial services professionals, NGOs, regulators, and policymakers with instrumental factor analysis to produce rankings of green financial centres on a variety of indicators.

The latest GGFI uses 4,498 financial centre assessments collected from 633 financial services professionals who responded to the GGFI online questionnaire. The GGFI is updated regularly, and ratings change as assessments and instrumental factors change.

Among the key highlights of the latest GGFI see Western European centres take six of the top 10 places, with US centres taking the other four top 10 places.

London retained its first position in the index, with New York moving up one place to take second place. Washington moved into the top 10, replacing Sydney.

However, the margins separating centres at the top of the index continue to be tight.

Among the top 10 centres the spread of ratings is 31 out of 1,000, compared to 42 out of 1,000 in GGFI 10.

Confidence in green finance as a sector is strong with all centres improving their rating in GGFI 11. The average rating rose over 10% compared with GGFI 10. Much of this confidence may be due to significant US commitments to prevent climate change and promote green infrastructure, in particular the US$391 billion Inflation Reduction Act and the US$108 billion Bipartisan Infrastructure Law.

Professor Michael Mainelli, Chairman of Z/Yen Group, publisher of the index said: “While Western European and US centres take all top 10 positions in the index, don’t ignore how recently US centres got with the programme, and how rapidly Asian centres are moving up.”

“At COP3 in Kyoto in 1997, carbon markets were the preferred anti-climate change mechanism. It may have been a slow quarter-century burn, but three-quarters of those responding to GGFI 11 expect 30% or more of greenhouse gas emissions to be covered by carbon pricing by 2030, up from 21% at the end of 2021 and 15% in 2020.”

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