London, U.K. leads the world when it comes to green finance, according to the new global green finance index (GGFI) launched Wednesday by Z/Yen and Finance Watch at an event in Brussels.
The GGFI ranks the world’s financial centres according to perceptions of the quality and depth of their green finance offerings.
“The GGFI aims to contribute to the definition of green finance and identify best practices and areas for improvement. We hope it will promote bold policy initiatives and high-quality financing that can cut through greenwash. It is urgent that sustainable finance becomes mainstream in all financial centres,” says Benoît Lallemand, secretary general of Finance Watch, in a statement.
For the purposes of the index, the inaugural report explains that “green finance refers to any financial instrument or financial services activity — including insurance, equity, bonds, commodity and derivatives trading, analytical or risk management tools — which results in positive change for the environment and society over the long term.”
“The most basic ‘greenness’ criterion of a company or project is that it contributes to reducing the emission of greenhouse gases,” the report says.
In general, Europe’s financial centres outperform other regions in the rankings. Various European centres, including Luxembourg, Copenhagen, Amsterdam, Paris, Brussels, and Hamburg join London at the top of the rankings.
The report notes that Paris, Frankfurt and New York are seen as the centres that are likely to become more significant players in the green finance market over the next two to three years.
Toronto is the only Canadian city in the rankings. The city ranks 34th for quality, and 30th for depth.
The leading centre in North America for both quality and depth is San Francisco. New York ranks just ahead of Toronto in terms of quality (30th), and lags in depth (43rd).