27/09/19

EUROPE: Leading in Green Finance Centres, According to Survey.

As published on internationinvestment.net, Friday September 27, 2019.

Western Europe continues to lead the world's financial centres in its approaches and initiatives in green finance, with Amsterdam and London both singled out at the top of the league, according to a study published today.

According to the fourth annual Global Green Finance Index survey, work being undertaken by the European Union on strategy, regulation, and measurement; and the work of central banks in Europe to embed sustainability in their regulatory work sees Europe leading the way globally.

GGFI states that generally standards are improving around the world as ratings of green finance rose in almost all centres for both depth and quality. With one exception, all centres received a higher rating for quality than in GGFI 3. Average performance across the measures of green finance depth and quality increased, with the average rating rising 2.2% for depth and 3.8% for quality compared with last year's report.

Amsterdam retained its leading position in the depth index (see table below), with Luxembourg regaining the ground it lost in GGFI 3 to take second place. London retained its position as first in the quality index, albeit with a smaller margin than before, with Amsterdam overtaking Paris to rank second 

On current trends, London would lose its top ranking for quality within the next 12 months. It is worth noting that the UK has fallen behind a number of other countries by not yet issuing a sovereign green bond. This may affect perceptions, GGFI said.

The evidence in this report suggests that larger, well-established centres are not generally those which are rated highly as green financial centres. For example, New York, which tops the ranking of financial centres competitiveness in the Global Financial Centres Index, and which has extensive green tech listings on its exchanges, ranks 41st for depth and 29th for quality in GGFI 4.

The top 20 ranked centres for depth and quality are shown in the table below

Asia/Pacific

GGFI added that Asia/Pacific centres overall fell back in the rankings for both depth and quality, even though ratings improved slightly overall, meaning that other centres improved their performance at a faster rate.

Shanghai retained its leading position in the region for depth, with Guangzhou improving five places in the depth rankings to 17th overall, while Melbourne and Sydney lead the region for quality.

In the Middle East & Africa, Casablanca consolidated its reputation as the regional leader, retaining its 13th place in the overall rankings for depth and placing 17th in quality. New entrant Tel Aviv took second place in the region and ranked 30th for depth and 25th for quality.

And in Latin America & The Caribbean, São Paulo retained its leading position in the region and rose three places in the rankings for quality. Cayman Islands rose to second place in the region for depth. The British Virgin Islands and Mexico City fell in the rankings for both depth and quality.