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2024 will have been a mixed year for “green finance”. Certainly, in the first half of the year, green debt issues will have increased by 7% (according to the Climate Bonds Initiative), but this performance is well below the +35% of the bond market. And, changing winds are blowing that these figures do not reflect.
In Europe, the density of regulations transforms economic actors into compliance agents, with obligations to publish information on the sustainability of financial products (in application of the SFDR – Sustainable Finance Disclosure Regulation) and business strategies (in application of the CSRD – Corporate Sustainability Reporting Directive), mobilizing considerable resources.
While in the United States, political polarization weighs on investment strategies: among other Republican states, Texas and Florida have adopted legislation limiting ESG investments, described as “woke” capitalism. This hostility has led some institutions to review their commitments to avoid controversies or legal risks. Leading players in asset management such as BlackRock, Vanguard and Fidelity are now measuring their support for shareholder ESG proposals. In the same movement, climate coalitions find themselves weakened by the withdrawal of some of their members (such as JPMorgan, State Street, etc.).
In this context, a new term has even emerged, “greenhushing”, designating the growing tendency of companies not to communicate on their environmental actions, in order to avoid criticism. This tactical silence can be interpreted as a sign of confusion or uncertainty about the direction environmental policies are taking.
This assessment of green finance, at the end of the year 2024, is certainly not disconnected from the tensions in the world of which it is an echo. The three COPs (on biodiversity in Cali, climate in Baku and desertification in Riyadh) led to mixed conclusions, while geopolitical clashes continued (in Ukraine) or increased in intensity (in the Middle East). ).
Furthermore, the election of Donald Trump, while reinforcing the “bashing” against ESG strategies in the United States, suggests a withdrawal from the Paris Agreement by the new American administration. Likewise, the promise of trade wars is added to the mix of economic uncertainties that are unfavorable for long-term investments. And as, beyond the American case, half of the world's population went to the polls, many countries are awaiting clarification on public support for environmental policies (France, unfortunately, being no exception…) .
The weakening of the UN system comes ahead of COP 30, which will be held in Brazil in 2025 and will have to clarify the “New Climate Finance Framework”: to follow up on the commitment made at COP29 to provide 300 billion dollars per year by 2035 to developing countries, the Belem COP will focus on developing effective mechanisms to mobilize and distribute these funds. The role of the private sector will be highlighted, with calls for increased mobilization of capital to supplement (or replace…) public financing (notably that which will be lacking from the US federal state).
Beyond this financing required under the Paris Agreement, annual investments of 4,000 billion dollars will be necessary by 2030 to limit global warming to 1.5°C, according to the International Climate Agency. 'Energy. As, already, 2 dollars are invested in carbon-free technologies for 1 in fossils, all is not lost. On the condition of not changing course, in the confusion of the changing winds of 2025…
