On September 4, 2024, EU4Green held an online webinar titled “Aligning Finance with the Green Agenda for the Western Balkans,” focusing on the critical role of green and transition finance in promoting sustainable development across the region. The webinar brought together experts from the Environment Agency Austria, offering insights into how financial strategies can support the Western Balkans’ green transition in line with the EU’s climate goals.

Key Discussions on Green and Transition Finance

The webinar began with an overview of EU4Green’s objectives, which include assisting the six Western Balkan economies—Albania, Bosnia and Herzegovina, Kosovo*, Montenegro, North Macedonia, and Serbia—in their efforts to align with the EU’s Green Agenda and achieve climate neutrality by 2050. A detailed introduction to green finance was provided, emphasizing its role in facilitating investments that contribute directly to environmental sustainability, such as climate change mitigation, biodiversity conservation, and pollution reduction. The key objective of the webinar was to create a common language for the key sustainable finance concepts defined by the EU Sustainable Finance Framework.

A significant portion of the discussion focused on transition finance, which targets industries and companies that are not yet green but require support in shifting toward more sustainable practices. Transition finance plays a vital role in ensuring high-emitting sectors can make the necessary adjustments without compromising economic stability.

One of the key segments of the webinar highlighted Austria’s Green Finance Alliance, an initiative led by the Federal Ministry of Climate Action. This alliance encourages financial institutions to align their core business strategies with the 1.5°C Paris Agreement target. Members of the Green Finance Alliance commit to rigorous climate goals, ensuring that the Austrian financial sector plays a leading role in the country’s green transition. This model was presented as an example of how financial governance and transparency can drive meaningful climate action and may serve as a template for other European countries. This ministry-led unique initiative differentiates itself from existing industry-led initiatives given member-independent governance structure, which ensures enhanced credibility for the climate actions taken by the members.

The concept of Just Transition Finance was another crucial topic. Just transition finance addresses the social aspects of the green transition, ensuring that no one is left behind. This includes funding programs to mitigate the socio-economic challenges posed by the transition to a greener economy, such as energy poverty and job losses in industries reliant on fossil fuels. The webinar emphasized that both green and just transition finance are essential for achieving a fair and inclusive green transition in the Western Balkans.

Key Learning Outcomes

Participants left the webinar with a deeper understanding of:

• The differences between green, sustainable, and transition finance, and their specific roles in supporting the green agenda.
• The relevance of green finance in accelerating the transition to a low-carbon economy in the Western Balkans.
• The regulatory frameworks, such as the EU Taxonomy and the EU’s Sustainable Finance Action Plan, which provide guidelines for green financial practices within the EU.
• The importance of addressing the impacts during transition of high-emitting industries to sustainability and ensuring that the green economy transition is socially just, i.e. through reskilling and upskilling.

Why Green Finance is Critical in Tackling Climate Change

As discussed during the webinar, the global average surface temperature has already risen by 1.2°C above pre-industrial levels, resulting in more frequent heatwaves and other extreme weather events. According to the International Energy Agency (IEA), global investments in energy transition technologies must quadruple annually to meet the 1.5°C target set by the Paris Agreement. Experts highlighted that the cost of inaction will far exceed the financial burden of a planned transition, with a green transition projected to boost the global economy by $43 trillion between 2021 and 2070 (Deloitte, 2023).

Finally, as the EU and its partners, including the Western Balkans, work toward a climate-neutral future, green and transition finance are recognized as fundamental tools for driving the necessary investments.

The presentation of the webinar is available for download under this article, while the full recording of the webinar will be available for viewing on the EU4Green website and the EU4Green Youtube channel soon. For those looking to further explore sustainable, green, and transition finance, the EU’s official resources provide comprehensive information on regulations and financial mechanisms supporting the green agenda.

DOWNLOAD THE PRESENTATION

* This designation is without prejudice to positions on status and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.