Ahead of the second session of the Intergovernmental Negotiating Committee (INC-2) to develop an international legally binding instrument on plastic pollution, the UNEP FI-convened Finance Leadership Group on Plastics has fed into the process. Responding to the INC Secretariat’s recent options paper, it has issued key messages that aim to help develop an agreement to accelerate and scale up the mobilisation of financial flows from all sources to end plastic pollution.
Mobilising financial resources from all sources at scale will be key to the success of the agreement and will require setting up a robust and harmonised enabling environment. The Finance Leadership Group has identified the following priorities that it considers important to include in the objectives and core obligations that the instrument will set:
- A clear, measurable, and time-bound overarching objective.
- An objective to align financial flows from all sources, public and private, with the treaty’s overarching objective, equivalent to Paris Agreement Article 2.1.c and Kunming Montreal Global Biodiversity Framework Goal D. This objective would emphasize the key role that public and private finance play in addressing the issue of plastic pollution and send a strong signal to public and private finance actors that they will be expected to reorient financial flows, and to Member States that they will need to establish the required enabling environment for it.
- A core obligation to create the mandatory framework and the environment that will enable alignment of all financial flows, increasing financial flows from all sources to solutions to end plastic pollution and stimulate a safe and just circular plastic economy, and decreasing financial flows from all sources which contribute to plastic pollution.
In order to align all financial flows with the objectives of the agreement, the Group has identified a set of “enablers” that the instrument should include:
- Harmonised sustainable finance taxonomies, targets and metrics to set a common hierarchy and criteria of solutions to end plastic pollution to inform businesses and financial institutions’ investment and financing decisions.
- Mandatory disclosure frameworks and requirements on plastic related risks and impacts for businesses and financial institutions with a standardised minimum set of data related to plastic pollution in operations, value chain and financial portfolios.
- Incorporation of plastic pollution into financial regulatory and supervision frameworks (including risks and impacts on the environment and on human health) by engaging with global standard setting networks.
- Catalysing of private investment through for instance policies, public-private partnerships, blended finance, and de-risking mechanisms to ensure the economic and financial viability of solutions to end pollution, innovation and circular solutions and taking into account the full externality costs of different plastics to the planet, people and society.
- Optimisation of co-benefits and synergies of financial flows between solutions to end plastic pollution and solutions targeting the climate and biodiversity crises to stimulate and facilitate interlinkages with the climate and biodiversity agenda as tackling the issue of plastic pollution will also contribute to reducing GHG emissions and addressing biodiversity loss.
- Capacity building for governments on private finance’s role and mobilisation, and for the finance sector on the plastics value chain to enable stakeholders to meet their obligations under the agreement.
- Clear definitions inter alia of financial flows from all sources, plastics, plastics value chain and plastic pollution.
Find more details in the full contribution document.
About the Finance Leadership Group on Plastics
Formed earlier this year, the Finance Leadership Group on Plastics is a core group of banks and insurers with total assets of USD 9.7 trillion convened by UNEP FI and sponsored by the Minderoo Foundation. Its members are working towards ending plastic pollution by supporting the development of the international legally binding instrument and building readiness across the global finance sector to respond to the future framework. Read more.