Sustainable Finance

IISD is influencing the future of finance. Our work varies from focused, in-depth assessments of sustainability-specific financial transactions to broader analyses that address the vital role that finance has to play in our sustainable future.

IISD’s work on finance for the sustainable future focuses on three main areas:

Climate

Ensuring adequate finance is available is crucial for making progress toward achieving the Paris agreement’s objectives. The estimated global financing gap for adaptation is between USD 160-340 billion per year through 2030. The gap for mitigation over the same time period is estimated at USD 850 billion per year. IISD is working with policy makers and financial market participants to drive financing for climate adaptation and mitigation to close this financing gap.

Nature

Based on recent estimates, USD 133 billion of financing is currently going into nature-based solutions (NbS) every year. At the same time, the financing needs of NbS are about USD 536 billion annually. This means that financing from both public and private sources need to be scaled up four times the amount invested today. IISD is working with relevant stakeholders and providing the data, knowledge, and tools needed to scale up financing for nature-based solutions, and in particular for nature-based infrastructure (NBI). IISD serves as the host of the NBI Global Resource Centre, a joint project with the Global Environment Facility (GEF), the Mava Foundation, and the United Nations Industrial Development Organization (UNIDO).

People

The social aspects of sustainability have historically received significantly less attention in sustainable investing than environmental objectives such as climate change adaptation and mitigation. This trend is also reflected in new sustainable debt issuance. Out of the USD 1.6 trillion new issues in 2021, there were only USD 165 billion social bonds (10%), even after a nine-fold jump in issuance from the previous year (1%). IISD is supporting the integration of social sustainability objectives in investments by providing the necessary expertise and tools to financial market participants and policy makers.

These focus areas will be guided by the following objectives:

• Redefining value – Collaborating with policymakers and financial market participants to advocate for and work towards the integration of environmental and social impact into financial decision-making and instruments.
• Triggering financial innovation – Identifying opportunities and working with partners to design financing solutions and catalyze the next generation of financial innovation.  
• Improving sustainability performance – Advising the financial sector and government partners on the quality of sustainable investments and improving transparency on sustainability claims.