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"New Rules for New Horizons": AXA and the UNEP Inquiry call for better alignment between the financial system and a sustainable future


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July 3, 2015

published at 2:00 AM CEST

  • AXA and the United Nations Environment Program (UNEP) Inquiry into the Design of a Sustainable Financial System organized a high-level Symposium in Paris today, at AXA's headquarters, to discuss "New Rules for New Horizons: Reshaping Finance for Sustainability".
  • Leading officials from international institutions, private sector representatives and leading academics convened to find solutions to the current five "warning signals" from the financial system, which are all impacting its capacity to support a sustainable and inclusive economic development model.

This high-level symposium, jointly organized by the UNEP Inquiry and AXA in Paris, gathered participants from various backgrounds, from across the five continents. The discussion acknowledged the numerous regulatory achievements accomplished since 2008 and then focuseds on a range of open issues regarding financial regulation and its efficient, impactful and necessary contribution to sustainable development.

Achim Steiner


As we look towards the convening of the Climate Change Conference in Paris this December, we are reminded that our ability to invest in new resource-efficient technologies and infrastructure will require enormous investments that will go beyond public finance. That is why UNEP initiated an inquiry into the design of sustainable financial systems to examine how best to align financial systems to sustainable development needs. (...) The AXA-UNEP high level symposium in Paris is, therefore, a milestone on the path to discovering where opportunities lie and where innovations are already making a difference towards the transition to an inclusive, resource-efficient global economy.

Participants focused on five key "warning signals" that are all impacting the financial system's ability to support a sustainable and inclusive economic development model:

  • A sense of fragile financial stability, stemming from the continuous creation of unchecked pockets of risks, despite progress in regulation and supervision across markets and jurisdictions.
  • A perceived lack of control, despite numerous new standards aimed at increasing reporting and transparency discipline across the finance industry.
  • Inefficient liquidity, as ultra-abundant liquidity on all financial markets and extremely low interest rates are not boosting public and private long-term investment.
  • Cornered emerging economies, with less access to global capital flows and attractive funding sources.
  • Time inconsistency, with greater collective needs for long-term and very diverse investments, and yet financial regulations that favour liquid, short-term and homogeneous investments.

Henri de Castries

Chairman & Chief Executive Officer of AXA (2000-2016)

We are convinced that the “systemic risk” of carbon has to be embedded into regulatory frameworks, through efficient “carbon pricing” mechanisms and more broadly a favorable treatment of longer-term investments that are necessary to limit climate risks. This would indeed increase the number of industry players contributing to the transition of a low carbon economy, and hence the necessary scale would be reached for a successful transition.

The leadership role taken by some emerging economies in better aligning finance and sustainability requirements was also stressed during the event.



Brazil has focused its efforts on delivering better access to financial services, especially to those with a low level of income, by means of financial education in order to limit excess debt. The country also included environmental criteria in the distribution of loans in regions ecologically at risk. All these efforts aim at better linking credit supply and social responsibility as well as promoting financial stability.

The discussion led to the preliminary conclusion that the notion of risk in finance should be widened to take into better account the new and expanding nature of the major challenges societies and economies face today, starting with climate change. This move would aim at incorporating social, environmental and long-term sustainability questions into regulatory and prudential frameworks and guiding the decision-making processes of large financial institutions through the use of revised risk pricing methods.



Potential long-term investors are increasingly constrained in their ability to provide long-term financing. Pension funds, sovereign wealth funds and insurance companies are ideal candidates to provide long-term financing. Policy makers need to address regulatory barriers and restrictions on portfolio allocations that currently limit the ability of these key long-term investors to provide the finance economies will need in the future.

These five "warning signals" and their consequences show that much remains to be done. The next steps need not, however, be driven by the rush of short-term crises and a culture of blame. Discussions steered around several imperatives, such as the necessity to drive the governance of rulemaking so as to include more political vision and less institutional fragmentation.

As John Lipsky, senior fellow, School of International Studies Johns Hopkins University & former First Deputy Managing Director of the IMF, said: "In the long run we will need a multilateral treaty-based financial regulation authority if we really want to efficiently tackle global sustainability challenges."

Was also debated the fact that as many a sustainable issue is local, both cities and regions need to be brought into the debate - on climate and beyond. These are just examples, but they illustrate that policy makers and regulators, with financial institutions and broader interests and expertise, can work together internationally in designing and implementing a financial system fit to serve 21st century economies.

A video of the key highlights of the day will be available from the 6th of July on.

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