The third edition of the Global Green Finance Index (GGFI 3) was published on 27 March 2019. It is a ranking of international financial centres – such as Paris, New York, Shanghai etc. – based on the perceived quality and depth of the green financing activities in each location.
Some of the major takeaways are:
- Amsterdam came first for depth, with Zurich and Copenhagen equal second. London dropped to fifth place
- In the quality rankings, London and Paris retained the leading two places
- In North America, Montreal came first for depth and San Francisco first for quality, although Canadian centres outperformed the US
- In Asia/Pacific, Shanghai came first for depth, and Sydney took the top place for quality
- Casablanca, São Paulo, and Prague topped the rankings for both depth and quality in their regions
- The biggest improvers were San Francisco, Toronto, and Vienna, which moved up five or more places in the depth index. Munich, Copenhagen, Toronto, and Madrid moved up five or more places for quality
- Renewable energy investment, sustainable infrastructure finance, and green bonds remained the areas of most interest to finance professionals.
GGFI 3 includes a special supplement on fossil fuel disinvestment, which looks at additional survey data and green and brown financing data in financial centres. We find that:
- Some financial centres have a high level of exposure to fossil fuel activities and are most at risk from a future deflation of the ‘carbon bubble’
- There is no clear link between a financial centre’s green finance reputation and its fossil fuel activities: some GGFI leaders host large amounts of fossil fuel financing, while the largest fossil fuel financing centres are spread throughout the GGFI index rankings. The financial centres with the highest volumes of disclosed GHG emissions (scope 1 and 2) based on companies listed in their stock exchanges were New York, Moscow, Paris, Shanghai, London, Frankfurt, Milan, Tokyo, Madrid, and São Paulo.
- There is support for policy interventions to facilitate fossil fuel disinvestment, with preferred solutions including regulatory disincentives around carbon, carbon pricing, and mandatory disclosure.