The London Principles were launched by Tony Blair at the Johannesburg summit in 2002 and identified the characteristics of a sustainable financial market. (Read the London Principles 2002 report here.)

A second report in 2005 'London Principles - three years on from Jonhannesburg' reviewed the progress that's been made on the London Principles project. (Read the London Principles 2005 report here.)

The second report concluded that despite significant progress in the field of sustainable finance, much more needs to be done if London is to maintain its position at the leading edge of integrating sustainability issues. In particular, the financial sector needs to play a stronger role in addressing the global challenges of climate change, poverty reduction and environmental degradation.

London Principles Phase II has therefore focused on some of the practical issues relating to access to finance to promote sustainability.

(a) Access to finance for eco-innovation

This piece of work involves consultation with venture capitalists, entrepreneurs and Government to establish the key barriers to the establishment and growth of companies producing innovative environmentally-beneficial technologies. We are holding workshops to bring these players together to raise and discuss the issues. The final report Clean Capital identifies key barriers and suggests ways in which they might be addressed.

(b) Access to finance for developing countries

This piece of work explores how innovative financial structures and instruments may enable poorer people in developing countries to obtain access to market finance which meets their needs. Workshops during 2006 and 2007 have brought key players together to investigate the initiatives being developed, and to explore whether these are sustainable and replicable. Examples of the financial products being reviewed are securitisation, microfinance, new insurance products, e-banking, and remittance payment systems.

• Read more on microfinance here
• Read more on insurance products in the context of adaptation to climate change here
• Read more on the potential for forest-backed bonds here

Through this project, we are continuing to explore the role of financial institutions in the City of London in supporting and promoting sustainability and to find ways to enhance their activities.

For more information please contact Alice Chapple at a.chapple@forumforthefuture.org.uk