G7 Finance Ministers & Central Bank Governors Communiqué

Canada | International Trade & Finance Policy

We, the Finance Ministers and Central Bank Governors of the G7, met virtually on 28 May 2021, and Finance Ministers met in London on 4-5 June 2021, joined by the Heads of the International Monetary Fund (IMF), World Bank Group, Organisation for Economic Cooperation and Development (OECD), Eurogroup, and (on 28 May) Financial Stability Board (FSB). We agreed concrete actions to address today’s historic challenges and as part of our renewed and urgent effort towards deeper multilateral economic cooperation.

Building a strong, sustainable, balanced and inclusive global economic recovery

1.  We will continue to work together to ensure a strong, sustainable, balanced and inclusive global recovery that builds back better and greener from the Covid-19 pandemic, recognising the disproportionate impact of the pandemic on certain groups including women, youth and vulnerable populations. We commit to sustain policy support as long as necessary and invest to promote growth, create high-quality jobs and address climate change and inequalities. As our economies re-open, we will continue to take steps to limit the uneven impact of the crisis by targeting support to where it is needed most. Once the recovery is firmly established, we need to ensure the long-term sustainability of public finances to enable us to respond to future crises and address longer-term structural challenges, including for the benefit of future generations. Monetary policy will continue to support the economic recovery from the pandemic and ensure price stability, consistent with central bank mandates. We reaffirm our exchange rate commitments as elaborated in May 2017. We will work to build a safe, resilient and open global economic system.

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2.  The Covid-19 pandemic can only be overcome when it is brought under control everywhere. There is an overwhelming moral, scientific and economic case for ensuring equitable, safe, effective and affordable access to Covid-19 vaccines, therapeutics and diagnostics across the world. Accelerating the end of the pandemic would add trillions of dollars to global GDP. We have already provided significant support, including to all pillars of the ACT-Accelerator. We welcome increased financial commitments by some G7 members and look forward to further commitments to help close the funding gap. We welcome the World Bank’s efforts on global health and vaccines, and urge them to step up the use of their considerable convening and financial firepower to address financial and operational challenges to more timely vaccine access by developing countries, including through COVAX. We also ask the IMF to explore adapting existing facilities to support vaccine financing. We strongly encourage private sector actors, including the pharmaceutical industry, to step up their contributions to fighting the current pandemic.

Transformative effort to tackle climate change and biodiversity loss

3.  We commit to a multi-year effort to deliver the significant structural change needed to meet our net zero commitments and environment objectives in a way that is positive for jobs, growth, competitiveness and fairness. We commit to properly embed climate change and biodiversity loss considerations into economic and financial decision-making, including addressing the macroeconomic impacts and the optimal use of the range of policy levers to price carbon.

4.  We emphasise the need to green the global financial system so that financial decisions take climate considerations into account. This will help mobilise the trillions of dollars of private sector finance needed, and reinforce government policy to meet our net zero commitments. We support moving towards mandatory climate-related financial disclosures that provide consistent and decision-useful information for market participants and that are based on the Task Force on Climate-related Financial Disclosures (TCFD) framework, in line with domestic regulatory frameworks. Investors need high quality, comparable and reliable information on climate risks. We therefore agree on the need for a baseline global reporting standard for sustainability, which jurisdictions can further supplement. We welcome the International Financial Reporting Standards Foundation’s programme of work to develop this baseline standard under robust governance and public oversight, built from the TCFD framework and the work of sustainability standard-setters, involving them and a wider range of stakeholders closely to foster global best practice and accelerate convergence. We encourage further consultation on a final proposal leading to the establishment of an International Sustainability Standards Board ahead of COP26.

5.  In addition, we recognise the growing demand for more information on the impact that firms have on the climate and the environment. We recognise that many jurisdictions and organisations are already developing impact reporting initiatives, including but not limited to reporting on net zero alignment and broader sustainability metrics. We will work closely together and with our international partners to determine the best approach to ensure global consistency.

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6.  We look forward to the establishment of the Taskforce on Nature-related Financial Disclosures and its recommendations. We welcome the Dasgupta Review on the Economics of Biodiversity and the related OECD Policy Guide on Biodiversity. More broadly, we welcome the continued commitments to tackle climate change by financial firms across the world, including through their active participation in the Glasgow Financial Alliance for Net Zero.

7.  We recognise that climate change poses increasing physical and transition risks to regulated financial institutions and to financial stability, and that these risks have distinct characteristics we need to take into account. G7 authorities consider it important for financial firms to manage the financial risks of climate change using the same risk management standards as applied to other financial risks. G7 Central Banks will assess the financial stability risks posed by climate change, and will consider drawing on, as appropriate, scenarios published by the Network for Greening the Financial System. Central Banks will share learnings on taking climate-related risks into account in their own operations and balance sheets as appropriate, and look forward to discussing later in the year how they might make their own disclosures based on the recommendations of the TCFD. We fully support the FSB in developing an ambitious roadmap that identifies and addresses climate-related financial risks, including through steps to promote comparable disclosures, address data gaps, enhance vulnerabilities assessments and promote consistent regulatory and supervisory practices. We also support the Sustainable Finance Working Group in developing their G20 sustainable finance roadmap, with an initial climate focus.

8.  International climate finance is critical for supporting developing countries’ climate change adaptation and mitigation efforts. We reaffirm the collective developed country goal to mobilise US$100 billion annually for developing countries from public and private sources, in the context of meaningful mitigation actions and transparency on implementation. We commit to increase and improve our climate finance contributions through to 2025, including increasing adaptation finance and finance for nature-based solutions. We welcome the commitments already made by some G7 countries to increase climate finance. We look forward to further commitments at the G7 Leaders’ Summit or ahead of COP26. We call on all the Multilateral Development Banks (MDBs) to set ambitious dates for Paris Alignment ahead of COP26, and welcome their work supporting client countries. We urge the MDBs to mobilise increased climate finance including from the private sector, and to increase their support for a clean energy transition, adaptation and resilience, and nature. We welcome the IMF’s increasingly critical role in supporting members’ management of climate risks and transitions to net zero, including through surveillance. We commit to including climate coverage within our countries’ IMF bilateral surveillance reports, and call on others to do the same.

9.  Environmental crimes have a serious impact on the planet’s biodiversity, generate billions of dollars in illicit finance and enable corruption and transnational organised crime. We agree that beneficial ownership registries are an effective tool to tackle illicit finance. We are implementing and strengthening registries of company beneficial ownership information to provide timely, direct and efficient access for law enforcement and competent authorities to adequate, accurate and up-to-date information, including through central registries. We further note the benefits of making beneficial ownership information publicly available where possible. We call on all countries to fully implement the Financial Action Task Force (FATF) Standards and strengthen them.

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