The Global Green Finance Index 14 - Supplement "Catastrophes & Insurance -Closing The Gap

The fourteenth edition of the Global Green Finance Index (GGFI 14) was published on 24 October 2024. GGFI 14 evaluates green finance offerings from 97 major financial centres around the world. The GGFI serves as a valuable reference into the development of green finance for policy and investment decision-makers.

There appears to be a slight drop in confidence in the development of green finance in financial centres. In the last edition of the index, the average rating was up 4.21%, whereas in this edition the average rating is down 1.96% compared with GGFI 13, with only six centres improving their ratings.

We continue to see strong performance from Western European centres, which reflects their history of developing green finance products and expertise. North American centres are also performing well. The general commitment of a city or jurisdiction to sustainability is a strong influence on the depth and quality of green finance in a financial centre.

Among those responding to the GGFI survey, Energy Efficient Investment, Disinvestment From Fossil Fuels, and Green Loans are rated as the areas of green finance with most impact, while Energy Efficient Investment, Renewable Energy Investment, and ESG Analytics are seen as the areas of most interest.

Underlining the importance of policy in green finance, Risk Management Frameworks, Policy and Regulatory Frameworks, and International Initiatives, are listed by respondents as the major drivers of green finance.

In the supplement to this edition of the GGFI, we consider the response of the insurance industry to the increasing risk of catastrophe arising from climate change and the potential role of a global climate risk pool with funding for the scheme raised, either through a global insurance levy, or by donations from developed countries and cover created through existing commercial markets.

Index Results

• London retained its first position in the index, while Zurich and Singapore overtook Geneva to take second and third places.
• Copenhagen re-entered the top 10 in this edition of the index, replacing Washington DC.
• Western European centres take six of the top 10 places, with US centres taking two. Singapore is the only Asia/Pacific centre in this leading group, with Montreal at 10th position.
• The margins separating centres at the top of the index are small. Among the top 10 centres the spread of ratings is only 13 points out of 1,000.
• Rome, Helsinki, and Sofia were the only centres to gain 10 or more places in the rankings, while just six centres fell 10 or more places.
• We researched 127 financial centres for GGFI 14. The number of centres in the index has increased to 97 (96 in GGFI 13) with the addition of Minneapolis/StPaul.