Sustainable financial management of municipalities for climate protection - a review

On 07 October, ÖGUT organised a webinar "Green money for green investments. Sustainable financial management of municipalities for climate protection" - already the fourth webinar in this series. This is recognised both at EU level with the Sustainable Finance Action Plan or the Renewed Sustainable Finance Strategy and at national level with various initiatives.
Municipalities are also investors. However, the redirection of existing financial investments in municipal hands has so far hardly been seen as an innovative, climate-friendly strategy.

Josef Behofsics welcomed the participants to the online event on behalf of the Ministry of Climate Protection and handed over to Katharina Muner-Sammer from ÖGUT, who led the event. As the first speaker, Susanne Hasenhüttl from ÖGUT gave an overview of the possibilities for municipalities to establish sustainable financial management. Even though municipalities in Austria do not have a large amount of investment capital in most cases, there is still the possibility of incorporating sustainability criteria into the investment policy or, for example, to carry out a divestment. In this context, divestment means deliberately excluding investments in fossil energies. In addition to investment, the financing of sustainable projects is a priority task in cities and municipalities. With the issuance of green bonds for large "green" projects or the use of citizen participation instruments (e.g. crowdinvesting for climate protection), innovative financing models can be used to finance climate protection projects at the municipal level.

Raphael Fink from the Ecolabel team at VKI then pointed out in his presentation that the guidelines of the Austrian Ecolabel for sustainable financial products can serve as a good guideline for investments - also in municipalities. As a very well established and credible standard for sustainable financial products, the Austrian Ecolabel offers orientation for investors in Austria. There are also already 205 financial products (as of September 2021) certified with the Ecolabel and available as sustainable investment products.

Christoph Frey, City Treasurer of the City of Munich, gave an exciting insight into sustainable municipal financial management. The City of Munich is considered a pioneer in the field of sustainable municipal investment. As early as 2007, the city council laid the foundation for increased investment in sustainable financial assets and decided to introduce an investment concept according to sustainable criteria (so-called ESG criteria). Since 2019, for example, all five municipal funds have been guided by the exclusion criteria of the FNG seal. The FNG seal is - along with the Austrian Ecolabel - a quality standard for sustainable investment funds, especially in German-speaking countries. At the beginning of 2020, Munich also issued a "city bond", which is in line with the Social Bond Principles and was issued for the (re-)financing of social projects.

The individual presentations as well as the recording of the event are available for download on the ÖGUT website: https://www.oegut.at/de/events/2021/09/uz-webinar-kommunen.php

This report was written by Susanne Hasenhüttl and Katharina Muner-Sammer, ÖGUT