London and Western European cities still dominate when it comes to green finance, but U.S. and Asian cities are catching up, according to the Global Green Finance index published Thursday by London consultancy Z/Yen Group.
The index, first published in 2018, rates financial centers on two measures: an online questionnaire and 140 factors, including business environment, human capital, infrastructure and sustainability. The latest index included 86 financial centers. It is sponsored by Abu Dhabi Global Market.
Four of the top 10 financial centers are in Europe, with London keeping the top position. Four U.S. cities — New York, Los Angeles and San Francisco — were also in the top 10 as the nation's capital displaced Sydney in this year's index, and New York moved up to second place. Stockholm and Amsterdam were also in the top 10.
The margins between all the cities' ranking were narrower than last year's index, and all financial centers improved their ratings by an average 10% over last year, according to Z/Yen Group.
Michael Mainelli, chairman of Z/Yen Group, said in a release on the index that while Western European and US centers held all top 10 positions,"don't ignore how recently U.S. centres got with the programme, and how rapidly Asian centres are moving up." Singapore, Seoul and Shanghai were in the top 20.
Mr. Mainelli also noted that three-quarters of this year's respondents expect 30% or more of greenhouse gas emissions to be covered by carbon pricing by 2030, compared to 21% at the end of 2021 and 15% in 2020. Along with the increased focus on carbon pricing and trading, respondents cited policy and regulatory frameworks as drivers of green finance.
Cities performing well in the index "are generally places that commit to environmental improvements across the economy as well as directly in finance," including sustainable economic development and green infrastructure, Z/Yen Group noted.
A supplement to this year's index looks at transition finance and efforts to move away from fossil fuels to renewable energy sources.