About the Coalition

Finance Ministers hold the keys to accelerating climate action. They know most clearly the risks posed by climate change, and recognize how taking action could unlock trillions in investments and create millions of jobs through 2030.

The Coalition of Finance Ministers for Climate Action brings together fiscal and economic policymakers from over 70 countries in leading the global climate response and in securing a just transition towards low-carbon resilient development.

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The Helsinki Principles

The six Helsinki Principles guide the Coalition's commitment to #ClimateAction

Helsinki Principle 1: Align Policies with the Paris Agreement

Align our policies and practices with the Paris Agreement commitments
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Helsinki Principle 2: Share Experiences & Expertise

Share our experience and expertise with each other in order to provide mutual encouragement and promote collective understanding of policies and practices for climate action
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Helsinki Principle 3: Promote Carbon Pricing Measures

Work towards measures that result in effective carbon pricing
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Helsinki Principle 4: Mainstream Climate in Economic Policies

Take climate change into account in macroeconomic policy, fiscal planning, budgeting, public investment management, and procurement practices
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Helsinki Principle 5: Mobilize Climate Finance

Mobilize private sources of climate finance by facilitating investments and the development of a financial sector which supports climate mitigation and adaptation
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Helsinki Principle 6: Engage in NDC Development

Engage actively in the domestic preparation and implementation of Nationally Determined Contributions (NDCs) submitted under the Paris Agreement
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75

Member countries

35%

of global carbon emissions

65%

of Global GDP

Member Countries

 

The Secretariat

Partners

Events

View recent and upcoming Coalition events, including workshops, webinars and meetings

HP4 Hosts Roundtable Discussion on Fiscal Policy and Practice Report

June 16, 2022

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The Coalition of Finance Ministers for Climate Action hosted a roundtable discussion on June 16 around the recently published Helsinki Principle 4 report, “Driving Climate Action through Economic and Fiscal Policy and Practice”, prepared under the leadership of U.S.A. and Denmark. The event highlighted the importance of robust action towards mainstreaming climate into economic and financial policies —and the potential consequences of inaction—by ministries of finance. The peer discussions centered around integrating climate change into fiscal sustainability analysis and mainstreaming climate change across public investment and asset management processes.

The event also showcased the importance of the Coalition to enhance the role of ministries of finance and why these ministries have a central role to play in unlocking the required investment and innovation to combat climate change. Country experiences were shared by Costa Rica, Denmark, Ethiopia, and Switzerland. The World Bank, International Monetary Fund, and Grantham Institute also provided key interventions throughout the event. The discussion highlighted the importance of developing a step-by-step approach to ensure steady progress and the need to raise awareness across ministries of finance about issues discussed in the report.

As immediate next steps, the work will continue under Helsinki Principle 4 on modeling and adaptation as well as Helsinki Principle 2 on guidance to support mainstreaming efforts.

 

HP5 Workshop Discusses Findings of Nature-Related Risks Report

June 07, 2022

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On June 7, the Helsinki Principle 5 (HP5) workstream hosted a workshop to discuss the findings from the recently published Coalition report, An Overview of Nature-Related Risks and Potential Policy Actions for Ministries of Finance: Bending The Curve of Nature Loss.

One of the priorities for the Coalition is to improve Members’ understanding of climate- and nature-related risks, as well as opportunities that will arise with the transition to net-zero, nature-positive economies. Nature loss and climate change are interrelated and neither crisis can be successfully resolved unless both are tackled together. As the understanding of the impacts of climate change become clearer, concern about nature loss among Ministries of Finance (MoFs) is growing. Hence, following the publication of the 2021 Coalition report on climate-related risks, the Coalition deemed it crucial to produce a report on nature-related risks. This report was prepared by the HP5 workstream, however it covers considerations relevant to all Helsinki Principles.

In the workshop, one of the report’s authors and the HP5 Workstream Coordinator, Samantha Power, presented some of the key findings. She discussed the report’s focus on the economic and financial risks of nature loss, particularly those with fiscal implications. She presented a framework that maps the potential transmission channels of nature-related risks. Finally, she discussed a range of potential policy actions MoFs can take to bend the curve of nature loss. She explained that while the roles and responsibilities of MoFs differ across countries, they all control levers that can make a significant contribution to reducing nature loss and the resulting risks. She noted that at the same time, many of the policy recommendations in the report can be most effectively implemented through a coordinated approach with other relevant ministries and possibly with supervisor, regulator, or central bank counterparts.

Next, two Coalition Members provided feedback on the report and shared how they are managing nature-related risk in their countries. Serina Ng (Deputy Director, Global Issues and Governance at HM Treasury, UK and Lead of HP5) discussed the UK’s strategy to manage nature-related risk and ways the Coalition can continue to advance the nature agenda for the benefit of all its Members. Afterwards, Masyita Crystallin (Special Advisor to the Minister of Finance, Coalition Sherpa Co-chair, Indonesia) spoke about how Indonesia has developed Natural Capital Accounts and how this information is used in decision-making and planning, including for the MoF. She talked about the importance of understanding and managing nature-related risks in Indonesia.

Following these interventions, Erlan Le Calvar (Nature-related Risk Taskforce support, the Central Banks and Supervisors’ Network for Greening the Financial System (NGFS) Secretariat) spoke about how MoFs, supervisors, and central banks can coordinate to manage nature-related risks. He discussed NGFS work on this topic, including its most recent report, statement, and plans for next steps – including the development of nature loss scenarios. He discussed where NGFS sees a role for governments to act and where there is a role for central banks and supervisors to mitigate and manage these risks.

Next, Basile Van Havre (Co-chair Open Ended Working Group for post-2020 Global Biodiversity Framework, CBD, Ministry of Environment and Climate Change, Canada) spoke about the state of finance in the Convention on Biological Diversity (CBD) COP15 negotiations. He shared details related to draft text of the agreement on the alignment of public and private financial flows with the goals of the Global Biodiversity Framework. He also pointed to the important role for MoFs in ensuring an ambitious agreement and supporting effective implementation.

Finally, Sonya Likthman (Manager, Federated Hermes Limited and co-chair of the Public Policy Advocacy working group of the Finance for Biodiversity Pledge) spoke about financial sector action to manage nature-related risk. She gave an update on the work of the Finance for Biodiversity Pledge and their various working groups. She discussed the group’s engagement with the CBD process and its position paper on alignment of financial flows with the goals of the Global Biodiversity Framework.

Fiona Stewart (Coalition Secretary) moderated an engaging Q&A session. Finally, the Sherpa Co-chairs noted that the publication of this report is an important step to help Coalition Members better understand nature-related risks and possible fiscal implications, as well as to initiate a discussion about policy challenges and how to best address them.

 

HP5 Publishes Report on Nature-Related Risks for Finance Ministries

June 06, 2022

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View/download the report

One of the Coalition's priorities is to improve Members’ understanding of climate- and nature-related risks, as well as opportunities that will arise with the transition to net-zero, nature-positive economies. Nature loss and climate change are interrelated and neither crisis can be successfully resolved unless both are tackled together. As the understanding of the impacts of climate change become clearer, concern about nature loss among Ministries of Finance (MoFs) is growing. Hence, following the publication of the 2021 Coalition report on climate-related risks, the Coalition deemed it crucial to produce a report on nature-related risks. This report has been prepared by the Helsinki Principle 5 workstream, yet covers considerations relevant to all Helsinki Principles.

The gap between humanity’s demands on nature and nature's ability to supply is widening and threatens continued provision of the critical ecosystem services that underpin key economic sectors. Awareness of the resulting nature-related risks among policymakers, real sector companies, financial institutions, and citizens has increased precipitously over the past several years. Simultaneously, the Parties to the Convention on Biological Diversity (CBD) are taking steps to reach an agreement on a post-2020 global biodiversity framework (to be decided at COP15). Finance is central to the negotiations and will be critical to ensuring effective implementation of the framework. For the first time, a range of financial institutions are highly engaged in supporting Parties to reach an ambitious framework. Nature is also playing a more prominent role than ever in the United Nations Framework Convention on Climate Change (UNFCCC) negotiations. For all these reasons, it is a critical time for Coalition Members to deepen their understanding of nature-related risks, how these risks are likely to transmit, and steps they can take to manage them.

This report focuses on economic and financial risks of nature loss, particularly those with fiscal implications. A range of potential policy options is presented, which could help MoFs manage nature-related risks. While the roles and responsibilities of MoFs differ across countries, they all control levers that can make a significant contribution to reducing nature loss and the resulting risks. At the same time, many of the policy recommendations in the report can be most effectively implemented through a coordinated approach with other relevant ministries and possibly with supervisor, regulator, or central bank counterparts. This report is an important step to help Coalition Members better understand nature-related risks and possible fiscal implications, as well as to initiate a discussion about policy challenges and how to best address them.

 

HP1 Publishes Report on Scoping the Fiscal Impacts of Long-Term Climate Strategies

May 11, 2022

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View/download the report

More than 140 countries, representing 90% of global carbon emissions, have announced or are considering net-zero targets. With the transition to net-zero, the structure of the global economy is expected to change significantly—clean sectors, such as renewable energy, are likely to grow, and emissions-intensive activities, such as oil or coal production, to shrink. Scoping the fiscal impacts of this transition is a critical task for finance ministries, as it can help them promote sustainable economic policies, prepare and adjust for possible major changes, and maintain budget sustainability in a changing environment. Yet much of the decision-making environment exists in conditions of deep uncertainty—many potential changes are difficult to forecast with a high level of accuracy, and the transition will likely be nonlinear, at some points gradual and at other points sudden. How, then, should finance ministries prepare for this transformation? What does it mean for economic forecasting and budgetary planning? With that background, the Coalition of Finance Ministers for Climate Action has published a new report under the Helsinki Principle 1 workstream (aligning policies with the Paris Agreement), titled "How to Scope the Fiscal Impacts of Long-Term Climate Strategies? A Review of Current Methods and Processes". By reviewing the leading fiscal modeling methods, approaches, and processes, this report provides a comprehensive guide for policymakers on how to best identify and quantify the potential fiscal impacts of various policies designed to address climate change and reach net zero targets. The report, based on a literature review and interviews with 36 global experts in academia, research institutes, and government, marks an important step in helping Coalition Member countries design tools to assess the likely economic and fiscal impacts of climate change policies. Moreover, since modeling is relevant across multiple Helsinki Principles, this report makes an important contribution to the Coalition’s work more broadly. The Coalition is very grateful to Sitra, the Finnish Innovation Fund, for leading the development of this report.

HP5 Stakeholder Dialogue on Corporate Sustainability Reporting - Updates from the ISSB and TNFD

April 14, 2022

 

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On Thursday April 14, 2022, the Coalition hosted representatives from the International Financial Reporting Standards (IFRS) Foundation’s International Sustainability Standards Board (ISSB) and the Taskforce on Nature-related Financial Disclosures (TNFD) to get an update on the respective standards or framework each is developing. This session built on previous discussions the Principle 5 workstream has organized on the topic of corporate sustainability reporting.

Mardi McBrien (Managing Director, IFRS Foundation) provided a presentation on the ISSB’s recently launched consultation on the body’s first two proposed standards. One sets out general sustainability-related disclosure requirements and the other specifies climate-related disclosure requirements. Mardi discussed the ISSB’s engagement strategy on these exposure drafts and offered a forward look on the development of the ISSB’s agenda, including a consultation on what its upcoming standard-setting priorities should be.

Emily McKenzie (Technical Director, TNFD Secretariat) then presented the TNFD’s newly released Nature-Related Risk & Opportunity Management and Disclosure Framework Beta v0.1. She covered the definitions, disclosure recommendations and risk and opportunity assessment approach, which are key components of the first iteration of the framework, as well as how pilots are being conducted. The first beta release of the TNFD framework outlines a proposed assessment process including 4 phases (Locate, Evaluate, Assess and Prepare - LEAP).

Following their presentations, Humberto Ahuactzin, Economic Studies Coordinator, National Banking and Securities Commission (CNBV), Mexico, provided some feedback and shared the Mexican experience on advancing the domestic corporate sustainability agenda. CNBV has created a working group on information disclosure and ESG standards adoption. Among other things, this working group has facilitated specialized training to CNBV’s staff and the working group’s members and observers, created an e-learning platform on sustainable finance, and developed a self-diagnosis tool for issuers and financial institutions.

Next Dirk Kramer, Deputy Division Chief, Sustainable Finance Division, Ministry of Finance, Germany, provided the German perspective on the topic and noted importance of this agenda in Germany. He emphasized the criticality of corporate sustainability reporting in the overall German sustainable finance strategy.

There was an engaging Q&A session in which the presenters commented on how materiality is addressed in their respective standards and framework. Emily explained that the TNFD framework considers both corporate impacts and dependencies on nature as core to the range of risks and opportunities that affect enterprise value. She noted that TNFD is developing case studies that demonstrate the materiality of nature-related risks to corporations. Two hypothetical case examples for forests and water ('WoodNCo' and 'SocietyInvest') are already available in a recently launched TNFD discussion paper: A Landscape Assessment of Nature-related Data and Analytics Availability. The paper shows how data and analytics can be used in the LEAP assessment process.

Mardi addressed the question on double materiality, noting that the ISSB is looking at reporting on enterprise value and that materiality can be viewed via a two pillar approach – pillar 1: enterprise value of primary interest to investors and pillar 2: wider impacts material to a wider range of stakeholders using GRI standards for example. The 2 pillars are interoperable and interconnected. The ISSB refers to the building blocks approach to address specific jurisdictional reporting requirements such as those outlined in the current EU proposals.

Both representatives noted that the climate-nature nexus is important and an area for further work. Emily noted that the TNFD framework does already recognize some linkages between climate and nature. She also noted that targets will be critical in determining transition risks and the importance of those to be set in the Convention on Biological Diversity Post-2020 Global Biodiversity Framework (GBF) and national and local targets stemming from the GBF. Mardi clarified that ISSB standards draw from the International Accounting Standards Board (IASB) standards and are closely aligned and share amongst other things terminology, user group and primary audience for reporting.

Both representatives invited feedback from Ministries of Finance (MoFs), particularly on what it will take for the standards/framework to be adopted in their jurisdictions.

 

Additional ISSB links:

 

Additional TNFD links:

 

HP4 Publishes Report on Driving Climate Action through Economic and Fiscal Policy and Practice

April 14, 2022

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The Helsinki Principle 4 workstream has published a new report, Driving Climate Action through Economic and Fiscal Policy and Practice.

View/download the report

Mainstreaming measures to halt climate change and mitigate its impacts in policy planning, budgeting, public investment management, and public procurement is essential to effective action. Countries have made progress in these areas, building on robust, evidence-based planning and financial management systems.

The Coalition of Finance Ministers for Climate Action recognizes the critical role of ministries of finance in responding to climate change and its causes and impacts. This report highlights the importance of robust action—and the potential consequences of inaction—by ministries of finance. It outlines five key areas to help ministers of finance take leadership on climate change: macroeconomic modeling, climate-informed fiscal risk assessment, green budgeting, public investment and asset management, and green public procurement. The report draws on experiences and practices from member countries and includes a curated list of frameworks, guidance, and tools to support ministries of finance in mainstreaming climate change in economic and fiscal policy and practice.

 

HP4 and HP5 Host Joint Workshop on Sovereign Climate and Nature Risks and Opportunities Reporting

February 10, 2022

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Image: Mangroves on the Pacific Coast of Panama. Credit: Flickr 

On February 10, 2022, the Helsinki Principle 4 and Principle 5 workstreams hosted a workshop to discuss whether it is time for a sovereign climate and nature risks and opportunities reporting framework. Nearly 100 participants tuned in to listen and discuss the relevance of this topic for their Ministries of Finance (MoFs) and for the Coalition overall.

One of the key priorities for the Coalition is to improve members’ understanding of climate- and nature-related physical and transition risks, as well as opportunities that will arise with the transition to net-zero, nature-positive economic models. This systemic change hinges on reliable information, which is key to driving a whole-of-government approach and to mobilizing climate finance. Sustainability reporting can play a central role in driving capital to sustainable investments and away from environmentally harmful ones. Progress has been made on corporate climate and nature reporting, but a significant information gap remains for sovereign entities.

In the workshop, Fiona Stewart (Lead Financial Sector Specialist, World Bank) presented key messages from a recently published World Bank report, ‘Sovereign Climate and Nature Reporting: Proposal for a Risks and Opportunities Framework.’ She laid out the case for countries reporting on their climate and nature-related risks and opportunities and explained why this information is needed to ensure that financial flows are aligned with the goals of the Paris Agreement. She pointed to the importance of providing financial market actors with regular, standardized, comparable information on adaptation and resilience criteria in order to counteract the effects of physical risk leading to increasing sovereign borrowing costs. She explained that reporting could provide sovereigns with the ability to better shape the narrative about their risk management and investment in opportunities.

Next, Ian Carruthers (Chair, International Public Sector Accounting Standards Board (IPSASB)) presented a brief overview of IPSASB’s mandate and ongoing work. He explained that IPSASB was actively exploring how it could take forward the report’s invitation to lead a consultative process to gain support for developing guidance for sovereigns on climate and nature reporting and what the key elements of this might be. He also explained how the guidance development process could build on the work done by the International Sustainability Standards Board and the Taskforce on Climate-related Financial Disclosures on reporting standards for corporates.

Following his presentation, Tim Williamson (Senior Public Sector Specialist, World Bank) reflected that reductions in borrowing costs could potentially provide powerful incentives for government climate action. He emphasized the importance of the discipline of public sector balance sheets and financial reporting as foundations on which credible sustainability reporting can be built. He also noted that many countries are a very long way from full implementation of accrual standards – yet the perfect should not be the enemy of the good. He emphasized the importance of developing a credible sustainability reporting framework that enables better integration of climate and nature-related criteria in financial markets and leads to stronger incentives for climate action – rather than a ‘tick-box’ exercise.

Lastly, Steve Waygood (Chief Responsible Investing Officer, Aviva) gave remarks providing an investor’s perspective. He discussed how Aviva engages with sovereigns on climate and nature-related risks and opportunities and how a standardized disclosure framework could help Aviva attain the information it needs for both analysis and engagement. He explained that credit ratings agencies are taking steps to further integrate this information into sovereign credit ratings and that investors are trying to get ahead of potential downgrades from failure to manage climate and nature-related risks. He discussed the growing demand from consumers for ESG investment options and how ESG disclosure is increasingly being considered as critical to market integrity in the UK. Steve explained that climate risks are just as endogenous for governments as they are exogenous and reporting is an important step towards addressing both categories of risks (further information on this is available in this Coalition report).

Lennart Duschinger (Sustainable Finance Advisor, Ministry of Finance, Luxembourg) acted as a discussant and shared feedback on the presentations. He was supportive of the proposal, but also noted how challenging and resource intensive it was for Luxembourg to develop the reporting needed for its sovereign sustainability bond (issued in 2020). He also shared some of the benefits of developing this reporting – noting how working across eight different ministries on the bond reporting created champions for sustainable finance in each and led to more harmonized communication across government. His advice to other members of the Coalition was that sustainability reporting is a journey and not to let the perfect be the enemy of the good. He emphasized the importance of getting started and committing to continuous progress over time.

Roberto Lazzeri Montano (General Director, Unit of Public Credit, Ministry of Finance, Mexico) also acted as a discussant. He shared supportive feedback on the proposal, while acknowledging the extent of the work related to public financial management Mexico and many other middle and low-income countries still have to do. He discussed Mexico’s experience with reporting on its SDG bond and shared that the country has received a lot of interest from investors on sustainability-linked bonds. He talked about the importance of middle and low-income countries being able to allocate resources to address the risks they are reporting on.

The event concluded with an engaging Q&A session moderated by Samantha Power (Coordinator for the Helsinki Principle 5 workstream). The necessity of developing a phased approach to reporting was emphasized by all speakers, as was the need for technical assistance and capacity building for countries which embark on this reporting journey. A principles-based approach to reporting, rather than a prescriptive one, was recommended. Steve Waygood spoke about the need to harness the international financial architecture to deliver a smooth and just transition, and for governments to ensure that finance and the real economy once again operate within the nine planetary boundaries.

Pekka Moren (Coalition Sherpa Co-Chair, Ministry of Finance, Finland) provided closing remarks. He noted the critical role MoFs have to play in driving Paris alignment through mainstreaming climate into economic policies. He acknowledged the importance of discussing sovereign climate and nature reporting, as reliable information and processes for tracking it are core to mainstreaming. He suggested that the Coalition should support members in taking concrete steps to begin on their respective reporting journeys, including helping them to overcome financial and capacity constraints. He reflected that the workshop provided useful feedback on the role of the Coalition in advancing sovereign reporting. He emphasized the need to raise awareness among finance ministers of the policy relevance of reporting, the practical challenges involved, and the need to build-up expertise and capacity. Pekka welcomed an update from IPSASB on the development of a sovereign climate and nature reporting framework in the future and noted that the Coalition looks forward to suggestions on how finance ministries can contribute to this effort.