‘A financial system for the 21st century’ – United Nations Environment Programme inquiry

United Nations Environment Programme Better Finance, Regulating financial institutions


In 2015, the United Nations Environment Programme (UNEP) conducted an extensive inquiry which examined how the financial system could contribute to achieving SDGs. It brought together practical examples of policy changes in banking, capital markets, insurance, and institutional investment from advanced and developing economies.

The inquiry report – The Financial System We Need – includes many proposals for policy reforms which would direct market finance to achieve key social and economic priorities, harness public investment more effectively, and improve systems for governing financial markets, thereby transforming investment cultures.

Actors involved


The following recommendations were made:

Enhancing market practice: disclosure, analysis, risk management

Harnessing the public balance sheet: fiscal incentives, public

Directing finance through policy: requirements and prohibitions, enhanced liability

Cultural transformation: capacity building, behaviour, market structure


[1] See for example Standard and Poors, “Methodology for Rating Public and Non-profit Social Housing Providers”, 8 December 2020. Available at https://www.spglobal.com/ratings/en/research/articles/201208-criteria-governments-request-for-comment-methodology-for-rating-public-and-nonprofit-social-housing-provid-11721121

[2] The European Central Bank recommends that “‘high quality micro data on households’ balance sheets, including indebtedness, financial and real assets is a useful tool for the assessment of micro and macro prudential risk stemming from the household sector” (https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2277~disa4093901f33.en.pdf). The International Monetary Fund is encouraging central banks to assess climate risks (Pierpaolo Grippa, Jochen Schmittmann and Felix Suntheim, “Climate Change and Financial Risk: Central banks and financial regulators are starting to factor in climate change”, Finance and Development, vol. 56, No. 4, December 2019. Available at https://www.imf.org/external/pubs/ft/fandd/2019/12/climate-change-central-banks-and-financial-risk-grippa.htm).