Kathmandu, April 15. It is a “positive step” for the world that the United States and China are cooperating on sustainable finance under the Group of 20 (G20), International Monetary Fund (IMF) Managing Director Kristalina Georgieva has said.

“Certainly having the two largest economies cooperating on sustainable finance is a very positive step in a world that is undergoing transformation, primarily because of the pressures that are coming from climate risks, and also to make sure that social and environmental issues are well integrated in investment strategies,” Georgieva said in an exclusive interview with Xinhua on Tuesday.

Georgieva’s remarks came after G20 finance ministers and central bank governors agreed last week that the sustainable finance study group will be upgraded to a fully-fledged working group, co-chaired by China and the United States.

“What we expect is that the G20 will come up with a clear roadmap for how sustainable finance can more deeply be integrated in financial systems,” she said.

Georgieva said the IMF strongly supports the immediate objectives of the G20’s sustainable finance agenda, citing standardized reporting and the role of international financial institutions in sustainable finance.

Climate change presents pressing risks to financial stability in two ways, namely physical risks and transition risks, Georgieva said.

On the one hand, more frequent and devastating climate-related natural disasters are already causing financial losses and putting pressures on financial institutions to more adequately recognize and buffer against these risks.

On the other hand, as policies shift towards low-carbon climate-resilient development, some sectors become less attractive for financing and also a high risk in the portfolio of investors, she said. (Xinhua)