G20 Finance Ministers Meeting Highlights
On October 23-24, G20 Finance Ministers convened in Washington DC during the Annual Meetings of the IMF and the World Bank, for their final official meeting under Brazil’s 2024 G20 Presidency. They also held a joint meeting with Climate and Environment and Foreign Affairs Ministers, as part of the Brazilian G20’s Global Mobilization against Climate Change (TF Clima).
A notable and positive outcome of these two meetings is the generation of two ministerial statements. In the last few years, geopolitical fractures have prevented the G20 from producing communiqués or joint statements able to signal consensus on policy coordination and to serve as reference points and roadmaps for future presidencies. Brazil, as president of the G20 in 2024, focused on reviving general ambition for this forum, and this is reflected in the Finance Ministers’ October 2024 communiqué, which reaffirms the G20’s vital role in economic policy coordination.
The closing 2024 meeting of the G20’s Finance track also demonstrated significant progress on the sustainable finance front. The 2024 annual report of the G20’s Sustainable Finance Working Group laid out high-level principles for private sector transition plans, which were highlighted and welcomed by G20 Finance Ministers in their communiqué. Transition plans are a key tool for corporates and financial sector firms; they are to become the new norm in business by helping firms manage sustainability-related risks and opportunities and plan and signal to investors their forward-looking strategies with regard to the transition.
This meeting also reaffirmed the crucial role of Multilateral Development Banks in mobilizing and effectively allocating financial support for development and climate priorities in emerging markets. Although discussions are ongoing about their resourcing and possible recapitalization, the ambition expressed by G20 Finance Ministers for IDA21 is a step in the right direction.
Finance Ministers reaffirmed their commitment to tackle global debt vulnerabilities and discussed ongoing work. The document produced on this topic was widely aligned with recent statements. It would have been constructive for G20 Finance Ministers to acknowledge that most countries experiencing debt challenges are dealing with liquidity pressures, rather than solvency issues, as well as to acknowledge some of the proposed solutions discussed, such as FDL's Bridge Proposal.
Where Finance Ministers mostly fell short is on the content of the joint statement produced with Foreign Affairs and Climate Ministers in the context of TF Clima’s work.
- It is undoubtedly positive that the joint statement emphasized the need for an integrated, whole-of-economy approach to climate and development, along with the commitment to national transition planning practices in support of ambitious NDCs. However, while national transition planning needs to remain country-led, it would have been constructive for the joint statement to highlight some core principles as guardrails or references for what good national transition planning practices look like. Country platforms are a promising, long-standing tool that may enable effective transition plans and their implementation. They are acknowledged in the statement, but the framing offered in the ministerial statement remains very general, and here too, concrete examples or specificities would have been beneficial to clarify the contours of what effective climate and development country platforms could might entail.
- Lastly, the TF Clima text suggests that adjustments might be necessary for regulating the financial sector to better consider climate-related risk and the unintended consequences that existing regulation may have on emerging markets. However, this suggestion is made timidly and without setting out a clear and constructive roadmap of further work that international standard-setters should engage in. The latter have made progress in this regard since 2021, but further progress has stalled in 2024, especially concerning climate-related disclosures to be produced by banks.
What to watch for in Baku and Rio?
As we gear up for COP in Baku next week and the Leaders Summit in Rio, there is an undeniable sense of anticipation and urgency to agree on a common path forward. In Baku, the outcome of the negotiation surrounding a New Collective Quantified Goal (NCQG) for climate finance will be the first signal as to whether leaders stand ready to recommit to and strengthen collective trust in international cooperation, processes, and fora, that are key to addressing the most pressing global challenges of our time.
In Rio, we will be watching for: the way Leaders address the G20 as a forum in a geopolitically fraught and uncertain context; what they retain from the work done this year by Finance Ministers; and how they address and connect work done by the G20 to issues to be dealt with at COP29 (Baku) and COP30 (Brazil).