Financial centers in Western Europe continue to dominate as leaders in green finance, taking most of the top spots in the fourth edition of U.K. think tank Z/Yen's Global Green Finance Index.
European cities took all of the top 10 positions for green finance quality, and eight of the top 10 places for the depth of green finance. The index is jointly developed by Z/Yen and European nonprofit organization Finance Watch, is based on a worldwide survey of finance professionals.
Quality, depth
Europe's domination could reflect efforts carried out by the EU on strategy, regulation and measurement, as well as the work of central banks in Europe to put sustainability at the heart of their regulatory work, Z/Yen said.
In the latest ranking, London maintained its position at the top of the quality index, despite not having yet issued a sovereign green bond, while Amsterdam dislodged Paris from second position. Brussels entered the top 10 by moving up two places from its ranking in the previous edition of the index.
The report noted that London could lose its top ranking for quality within the next 12 months on current trends.

In terms of depth, Amsterdam retained its leading position in the index, while Luxembourg was second, moving up two places from the previous edition. Zurich dropped three places to fifth from second, while Hamburg moved by the same number in the opposite direction to become equal with Paris in seventh.
The Canadian cities of Montreal and Vancouver were the only non-European financial centers in the top 10 depth rankings for green finance.

"The strength of Western Europe in green finance is shown clearly in GGFI 4," Z/Yen Executive Chairman Michael Mainell, one of the authors of the report, said.
"All financial centers and financial services businesses need to do more if we are to meet the world's needs for environmental change."
Outside of Europe, San Francisco was the leading center for quality in the U.S., retaining its 11th place in the index, while its rank in the depth index jumped seven places to 17th. Asia-Pacific financial centers dropped overall in the rankings for both depth and quality, while Tel Aviv, Israel, was a new entrant in both the quality and depth lists, coming in at 25 and 30, respectively.
Lack of awareness
Meanwhile, the report noted that awareness and concern over risks related to biodiversity within the financial services industry remained at an extremely low level, despite the potential catastrophic impacts on financial assets and the economy.
Finance Watch General Secretary Benoît Lallemand said financial markets have a crucial role to play in improving efforts towards biodiversity.
"At present, finance is doing too little to protect biodiversity and restore and conserve natural capital," Lallemand added.
