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 50 countries in leading the global climate response and in securing a just transition towards low-carbon resilient development.

Learn More

The Helsinki Principles

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

Helsinki Principle 1: Align

Align our policies and practices with the Paris Agreement commitments
Read More

Helsinki Principle 2: Share

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
Read More

Helsinki Principle 3: Promote

Work towards measures that result in effective carbon pricing
Read More

Helsinki Principle 4: Mainstream

Take climate change into account in macroeconomic policy, fiscal planning, budgeting, public investment management, and procurement practices
Read More

Helsinki Principle 5: Mobilize

Mobilize private sources of climate finance by facilitating investments and the development of a financial sector which supports climate mitigation and adaptation
Read More

Helsinki Principle 6: Engage

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

62

Member countries

39%

of global CO2 emissions

63%

of Global GDP

Member Countries

 

The Secretariat

Partners

Events

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

Mrs. Annika Saarikko, new Finance Minister of Finland, assumes role as Finnish Co-Chair

June 15, 2021

Annika Saarikko

Mrs. Annika Saarikko has been appointed as the new Minister of Finance of Finland, and as such will assume the role as Finnish Co-Chair. Minister Saarikko, formerly Finland's Minister of Science and Culture, affirms Finland’s commitment to act as Co-Chair for the Coalition of Finance Ministers for Climate Action.

On Tuesday, June 1, Minister Saarikko met with World Bank Group President David Malpass in Helsinki and discussed priorities in the fight against climate change.“The Coalition of Finance Ministers highly appreciates the support and input given by the World Bank acting as the Coalition Secretariat in cooperation with the IMF. I look forward to co-chairing the Coalition with the Minister of Finance of Indonesia, and highly honor our joint engagement,” said Minister Saarikko.

Outgoing Finance Minister Matti Vanhanen extends his thanks to his Co-Chair colleague Sri Mulyani Indrawati, Minister of Finance of Indonesia: “I would like to thank my colleague Sri Mulayni Indrawati for the Co-Chairmanship. I am impressed with the progress of the Coalition work and I see a productive future of the Coalition”.

Coalition and Swedish MoF hosts Virtual Workshop on Carbon Taxation, Green Recovery, and CBAM

May 06, 2021

On May 6, 2021, the Swedish Ministry of Finance in cooperation with the Coalition of Finance Ministers for Climate Action organized a virtual workshop on carbon pricing, emphasizing in particular the role that carbon taxation and the Carbon Border Adjustment Mechanism (CBAM) proposed by the European Commission can play in the Green Recovery process following the COVID-19 Pandemic. This was the second workshop co-organized by the Swedish Ministry of Finance -- the first one occurred in October 2019 and focused on carbon taxation. Presentations and a summary note from the earlier workshop can be found here.

The workshop was divided into three parts. The first session discussed how to tax carbon to achieve the sustainable development goals and climate targets. It was agreed that a simple carbon tax, applied upstream (where there are less taxpayers to control), with a wide coverage that is non-sectoral, and a tax rate that is considered to be acceptable within the economic context of the country in question, was the most desirable approach to taxing carbon. Such a tax would be capable of raising revenues which are important to recover from the COVID-19 recessionary environment, and lead to a behavioral switch in fossil fuel consumption patterns.

The second session discussed revenue use under a green recovery scenario. It was noted in this session that the pathway to green growth requires consistency in policy administration. Green stimulus packages should ideally include green finance, green procurement, green export credits, and green taxes to steer consumption, and they should be broadly aligned with countries’ NDC commitments. The presenters agreed that the way in which the revenues deriving from a carbon tax are employed in society is extremely important in harnessing long-term popular support for the measure. Therefore, pricing policies should be very well crafted, administered in a transparent way, and follow ample public consultations in order to win popular support.

The third and last session of the day explored the carbon border adjustment mechanism, its use, alternative measures to the employment of a border adjustment, the specific case of the EU CBAM, as well as a novel approach under consideration in Canada. Two reports were discussed in this session. The links are found below

HP2 Hosts Workshop on Finance Ministries’ Strategies, Capacities, and Research Practices

May 26, 2021

Banner

On Wednesday, May 26, the Coalition hosted a workshop under Helsinki Principle 2 on Finance Ministries’ Strategies, Capacities, and Research Practices.

The two-hour virtual seminar addressed how Ministries of Finance have incorporated climate change into their strategies, how they are addressing capacity and expertise issues related to climate change, and how research can provide guidance for economic policymaking. The event was divided into two parts. The first part featured countries’ presentations of climate strategies within their finance ministries. The Coalition then outlined areas of capacity building support made available by the Coalition’s Institutional Partners. The second part discussed the results of the Coalition’s surveys in the areas of Helsinki Principle 2, highlighted online training programs in climate economics, and detailed how the Coalition can support the technical training needs of its Members.

Coalition Publishes New Report: Climate-Related Risks for Ministries of Finance: An Overview

May 25, 2021

 

The Coalition’s Santiago Action Plan stresses the importance of incorporating climate change considerations into financial decisions and identifying risks climate change poses to financial stability. In this context, the Coalition produced this note on climate-related financial risk to raise awareness and explore risk management approaches. The findings of this note will be reviewed by Coalition Members with a view to identify policy priorities and potential areas for future work.

This note provides an overview of how climate-related risks may manifest in different sectors of the economy and alter macroeconomic conditions that affect the work and responsibilities of Ministries of Finance (MoFs). The interaction of various risks may lead to reinforcing feedback effects that could gradually or abruptly cause high fiscal costs and trigger contingent liabilities of MoFs with growing climate change. However, the materiality of these risks – posing potentially high ex-ante unknown fiscal costs for MoFs – depends on the interplay of climate-related risk transmission channels, the degree of unfavorable reinforcing feedback loops, the specific country context, and climate action measures.

Ambitious mitigation and adaptation measures could reduce the likelihood of severe climate-related risk impacts that could otherwise grow and potentially hinder countries’ long-term economic development. The note concludes with potential policy actions MoFs can take to mitigate and manage climate-related risks.

Download: Climate-Related Risks for Ministries of Finance: An Overview


Below is a key graphic from the report: 

Climate-related risk transmission channels and Ministries of Finance

graphic

Note: The figure shows the transmission of climate-related risks (physical or transition) to different sectors of the economy (including government fiscal risk) and the macroeconomy. The interaction of these risks may lead to reinforcing feedback effects – potentially triggering contingent liabilities of the MoF. Contingent liabilities are defined as obligations that only materialize when a certain event in the future occurs. Contingent liability risks could become gradually or abruptly more severe with ongoing climate change (depending on the specific country context), as indicated by the red “risk severity” arrow. However, the materiality of these risks, posing potentially high ex-ante unknown fiscal costs for MoFs, depends on the interplay of climate-related risk transmission channels, the degree of unfavorable reinforcing feedback loops, and climate action measures – as is indicated by the grey “risk materiality” arrow.

Source: Authors’ conceptualization adapted from NGFS (2020), Schuler et al. (2019), Volz et al. (2020) and IMF (2008)

 

Coalition Hosts Stakeholder Dialogue with Mark Carney, UN Special Envoy on Climate Action and Finance

May 18, 2021

Mark Carney

On May 18, the Coalition hosted a stakeholder dialogue with Mark Carney (UN Special Envoy on Climate Action and Finance; Special Advisor for COP26; Vice Chair at Brookfield Asset Management; and former Governor of the Bank of England and Bank of Canada). Mr. Carney shared some of the key messages from his forthcoming book, Value(s): Building a Better World for All.

He discussed the widening gap between what people value and what markets value, and emphasized the importance of policies that enable value today to service the values of tomorrow. Mr. Carney discussed the power of markets and the role Ministries of Finance play in setting credible, predictable, long-term policy pathways that harness this power to drive the transition to net zero. Joaquim Levy (Director of Economic Strategy and Market Relations, Banco Safra Brazil; former Finance Minister of Brazil; Adviser, World Resources Institute) served as a discussant.

Coalition Members and Institutional Partners engaged with Mr. Carney in an open discussion about a broad range of topics, including voluntary carbon markets, institutional arrangements to support climate policies, international coordination on corporate climate risk disclosure, auditing, and blended finance. The discussion served as useful input to the Coalition’s evolving work program.

 

HP5 Hosts Workshop on Commitments and Measurement Methods for Private Financial Sector Paris Alignment

May 12, 2021

image

On Monday May 10, the Coalition hosted a workshop on Commitments and Measurement Methods for Private Sector Portfolio Alignment with the Paris Agreement. In the workshop, the findings from a recently finalized Coalition report were presented. The Summary for Policymakers and Presentation of Key findings are both available here.

Stefan Flückiger, Deputy State Secretary for International Finance, Switzerland and Marcel Beukeboom, Climate Envoy, the Netherlands spoke about their countries’ respective experiences encouraging financial institutions to commit to Paris Alignment, measuring their progress, and advancing portfolio and real world decarbonization. Jochem Wissenburg (Netherlands Ministry of Finance) and Florencia Baldi (Financial Centers for Sustainability) presented key findings from the Coalition report. Representatives from PACTA and PCAF presented their respective measurement tools and approaches. Finally, representatives from UBS and Amalgamated Bank spoke about their experiences using these measurement tools. Coalition members engaged in a discussion with these representatives and connections were made to facilitate bilateral experience sharing.

The Coalition will continue to advance knowledge and experience sharing on Paris Alignment commitments and measurement methods. The Summary for Policymakers suggests that Ministries of Finance and central banks, as well as international bodies such as the Coalition, have a role to play in fostering robust climate alignment initiatives and methodologies.

Coalition publishes Summary for Policymakers on Private Financial Sector Paris Alignment

May 06, 2021

Recent analysis conducted under the Helsinki Principle 5 workstream of the Coalition of Finance Ministers for Climate Action looks at commitments and methods used by the private financial sector to align with the Paris Agreement goals and explores how Ministries of Finance can support these commitments. The Santiago Action Plan and the Coalition work program identify this as a priority topic. In this summary, written for policymakers, Jochem Wissenburg from the Ministry of Finance of the Netherlands, Florencia Baldi of the FC4S Network, and Emma Dalhuijsen and Samantha Power of the World Bank present some of the findings and suggest potential actions for government actors.

Financial institutions are joining a growing number of initiatives to align their lending and investment portfolios with the Paris Agreement goals. Individual institutions from all over the world are measuring climate impact and have set climate alignment targets. National initiatives in European, Latin American, and Asian countries have been established to advance climate-aligned and sustainable finance. Internationally, institutions are collaborating under initiatives such as the Net Zero Asset Owners Alliance, which aims to align portfolios with net-zero outcomes in the real sector by 2050. Nonetheless, implementation of such commitments remains challenging since methodologies to measure climate impact are still under development, compliance is not effectively controlled, adequate data is still lacking, and real world impact depends on a multitude of factors inside and outside of financial institutions’ remit.

This summary showcases different commitments that have been undertaken to illustrate approaches that financial institutions and governments are currently developing. It also assesses the characteristics of the different tools and methodologies for measuring Paris alignment. Finally, the summary makes suggestions for potential action policymakers can take at the international and national levels. Ministries of Finance (MoFs) and central banks, as well as international bodies such as the Coalition of Finance Ministers for Climate Action (‘the Coalition’), have a role to play in fostering robust climate alignment initiatives and methodologies.

--

Below: a table comparing different Paris Alignment methodologies adapted from the Summary for Policymakers note.

Table

Coalition Hosts Stakeholder Dialogue with the CBD Secretariat

April 27, 2021

Convention on Biological Diversity

On Tuesday, April 27, the Coalition hosted a virtual ‘stakeholder dialogue’ with the Convention of Biological Diversity (CBD) Secretariat. Elizabeth Maruma Mrema, CBD Executive Secretary, and Basile Van Havre, CBD Co-Chair of the Open-Ended Working Group, provided an update on the economic and financial challenges associated with meeting global biodiversity goals, including mobilizing public and private resources.

They presented the draft post-2020 Global Biodiversity Framework and discussed efforts being taken to engage the financial sector in its implementation. Giovanni Ruta from the World Bank presented insights from the forthcoming report, ‘The Economic Case for Nature: A global earth economy model to assess development policy pathways.’

A discussion took place on the potential role of MoFs in meeting the targets laid out in the Global Biodiversity Framework. Coalition Members also discussed the potential to raise awareness of actions that can be taken at the climate-nature nexus and implications for the Coalition’s work. The Coalition co-chairs acknowledged that biodiversity has significant relevance to economic and financial stability. Climate change is contributing to the loss of biodiversity and natural systems, which is contributing to further climate change and compromising the resilience of countries to climate impacts.

The co-chairs acknowledged the Coalition should follow the work of the CBD as part of its effort to mainstream climate action into economic policies. Members of the Coalition are starting to look at how the policy levers they deploy can help to identify and manage climate- and nature-related financial risks and economic impacts.  

Coalition and OECD Paris Collaborative hold third joint workshop on Green Budgeting

March 25, 2021

 

GB screenshot

Above: screenshot from the joint workshop on March 25, 2021.

On March 25th, 2021, the Coalition of Finance Ministers for Climate Action organized a high-level workshop on green budgeting in co-operation with the OECD Paris Collaborative. Green budgeting is a key priority area on the Coalition’s agenda, and this is the third joint green budgeting event since the Coalition’s inception. The work builds on the various findings and discussions that have taken place at previous workshops and the efforts of the Institutional Partners (e.g. OECD, WB, IMF, UNDP), and provides a way forward for the Coalition’s work and all its member countries. 

The first session highlighted the latest developments on green budgeting, including the results from the 2020 OECD and European Commission – Joint Survey on Emerging Green Budgeting Practices. This was followed by a presentation to emphasize the importance of green recoveries and how green budget tagging can help identify relevant investments for long-term climate and environment objectives. The second session focused on the importance of macro-economic modelling in providing an analytical basis for policy designs and the assessment of economic, environmental, and climate effects. The third and final session looked at how countries can use different sets of approaches to build resilience to address national and global commitments, including Nationally Determined Contributions (NDCs), with highlights from Colombia and Grenada.

 

Presentations:

 

Background Documents: