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G7 Finance Ministerial – E3G reacts

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G7 finance ministers pose for the traditional group photograph. Image via Flickr: hmtreasury
G7 finance ministers pose for the traditional group photograph. Image via Flickr: hmtreasury

FOR IMMEDIATE RELEASE  – LONDON, 5 JUNE 

  • G7 Finance ministers have committed to increase and improve climate finance contributions through to 2025, but did not specify numbers.  
  • E3G experts welcome progress, especially on the financial regulatory front, but noted that today’s communiqué was very weak on the coordination of domestic green recovery efforts and failed to make additional resources available for a global recovery. 

Story 

The G7 is the main political opportunity this year to relaunch global coordination between major powers, and to build global solidarity around tackling the three interconnected global challenges of health, climate and economic recovery.  

Today, G7 Finance ministers agreed to a number of solidarity measures for developing countries, but they are not concrete enough to be transformative. The collective reaffirmation to provide US$100 billion per year to developing countries in climate finance is positive. So is the commitment to increase individual contributions through to 2025. Actual numbers would have been welcome, but Finance ministers left this to their Leaders.  

Urging Paris-alignment of Multilateral Development Banks (MDBs) is a good step forward, as is the commitment to ensuring MDBs can make best use of their resources. But G7 Finance ministers fell short of calling for an actual increase in their financial firepower and setting a date by when Paris-alignment must be achieved    

Ministers called for the implementation of a new general allocation of Special Drawing Rights (SDRs) by the end of August 2021, but the matter of SDR reallocation remains open.  

By calling on the implementation of mandatory disclosure requirements on climate-related risks (based on the TCFD framework), G7 Finance ministers took a positive step to channel private investment in the right direction. Recognising the need to work on globally consistent sustainability standards is also good progress. It is especially positive that the G7 discussed and recognised the work that has already been done in this area by many standard setters.  

The starkest gap pertains to green recovery at home. G7 Finance ministers recognised the need to build back better, but failed to say how they would achieve this. Calling on continued fiscal support falls short. Coordinating and agreeing to, common and ambitious standards for domestic fiscal support and recovery efforts is an economic and political imperative. 

Some progress was made today, but bolder and more concrete action was needed. The pressure is now on the G7 Leaders to fill the gaps and raise ambition ahead of the G20 in July and COP26. 

Quote 

Sima Kammourieh, Head of Better Recovery Unit at E3G said: 

“Today’s meeting was very disappointing on domestic green recovery efforts. It is not enough to commit to a better recovery globally. Achieving it begins with brave efforts at home. It begins with G7 Finance ministers taking their responsibility and coordinating on common standards for domestic recovery plans.” 

Julian Havers, Programme Lead Public Banks and Just Transition at E3G said: 

It is critical that G7 Leaders come forward with complementary finance package for the MDBs. The upcoming G20 review of MDB’s risk-management rules is important, but it requires an external reviewer. Carbis Bay is now set to become a leadership test for the G7 and their ability to initiate the reforms to make financial institutions fit for purpose for the low-carbon transition of the next decade” 

Available for comment 

Sima Kammourieh, Head of the Better Recovery Unit 
m: +49 (0)151 17604965, Sima.kammourieh@e3g.org    
 
Julian Havers – Programme Lead Public Banks and Just Transition 

m: +49 (0) 1602120435, Julian.Havers@e3g.org 

ENDS 

Notes to Editors 

  1. E3G is an independent climate change think tank accelerating the transition to a climate safe world. E3G specialises in climate diplomacy, climate risk, energy policy and climate finance. -> About 
  1. What are the key tests for G7 Finance Ministers and Leaders? -> G7 Countdown  
  1. E3G experts are available for wider G7 commentary –> Experts available for G7 comment 
  1. For further enquiries email press@e3g.org or phone +44 (0)7783 787 863 

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