Johanna Nyman, AFI Head of Inclusive Green Finance  

  
Preparing for the impacts of climate change is a luxury we no longer have. It’s happening right now. AFI recognized this urgency when it launched the Port Moresby Compact on Inclusive Green Finance – a collective call and a global commitment from central banks and financial regulators to move from policy to practice.   

To understand why the Compact matters, it helps to look at how we got here. AFI started its Inclusive Green Finance (IGF) journey over a decade ago when members first recognized the critical role inclusive finance plays in advancing climate resilience and mitigation. In 2017, the AFI membership approved the Sharm El Sheikh Accord on IGF, which helped define the role of central bankers and regulators, what fell within their mandates, and what policy- and regulatory tools they had at their disposal.  

Since then, progress has been significant. Central banks and regulators are heeding the IGF call as they witness firsthand how climate change affects financial stability. AFI members recognize that extending financial services like insurance, credit, payment systems and formal savings to the world’s most climate-vulnerable can build their resilience, enable small-scale climate mitigation, and advance economic stability. Today members organizations are developing and implementing IGF policies across emerging markets and developing economies.  

Even so, gaps remain. We need stronger coordination between policymakers, regulators, and financial institutions at the national level. We need de-risked finance that guarantees investment. We need private sector buy-in and solid commitment from governments and international stakeholders.   

The Port Moresby Compact can help us get there by holding us accountable for delivering IGF policy to those who need it most: MSMEs vulnerable to climate change; small-scale farmers who need better irrigation technology; families without insurance; and small businesses vulnerable to natural disasters.   

Every day we witness the harsh reality of climate impacts like droughts, wildfires, floods and changing weather patterns, and their toll on financial well-being and financial stability across emerging markets and developing economies. That is why the Port Moresby Compact matters more than ever. It tells us not only where we want to go with IGF, but what we need to do, together, to get there. Every second counts.