{"id":32009,"date":"2020-09-14T09:04:37","date_gmt":"2020-09-14T09:04:37","guid":{"rendered":"https:\/\/www.climatepolicyinitiative.org\/?p=32009"},"modified":"2026-04-28T04:19:40","modified_gmt":"2026-04-28T04:19:40","slug":"why-we-call-it-dirty-finance","status":"publish","type":"post","link":"https:\/\/www.climatepolicyinitiative.org\/id\/why-we-call-it-dirty-finance\/","title":{"rendered":"Why we call it \u2018dirty finance\u2019"},"content":{"rendered":"\n

Since 2010, Climate Policy Initiative has been a leader in tracking sustainable investment<\/a>. And soon, our team will publish a first ever analysis of fossil fuel-based power generation investment that tracks finance for high-emissions assets from source all the way through destination.<\/strong><\/p>\n\n\n\n

We know that clear and accessible information on climate finance is critical to maintaining the momentum of the Paris Agreement and achieving our climate goals. As the communications leads for this work, it falls on us to help our team frame and define our findings in a way that can be widely understood.<\/p>\n\n\n\n

While there are a litany of terms used in our space to categorize investment, they differ depending on the entity and often prioritize specificity over understandability.<\/p>\n\n\n\n

For understandability: \u201cGreen finance\u201d is the established term to define \u201cgood\u201d finance, meaning money flowing for the mitigation of and adaptation to the effects of climate change. \u201cGreen\u201d works for many reasons. It\u2019s easily recognizable and has a positive connotation: green lights, green money, green environment. It\u2019s also been adopted across many different institutions, regions, and technologies as the shorthand for environmentally-friendly finance.<\/p>\n\n\n\n

But, what is the best word to use when we refer to \u201cbad\u201d finance? Using green invites a color comparison, and thus many, particularly in European finance circles (including CPI in the past), have used the term \u201cbrown finance\u201d to describe money funding assets that damage our planet and contribute to the climate challenge.<\/p>\n\n\n\n

Early this year, an expert with whom we work pointed out to CPI, rightly, that this term is offensive, as brown can also denote the color of someone\u2019s skin. Reverend Yearwood recently summarized the issue clearly<\/a>, \u201cfor people of color, it is hurtful and damaging to associate something that is detrimental to society with the word brown.\u201d<\/strong><\/p>\n\n\n\n

In the environmental space, the term is especially concerning considering the disproportionate effects<\/a> that climate change has and will have on black, indigenous, and other marginalized people around the world.<\/p>\n\n\n\n

As a result, in February CPI polled experts from our Climate-aligned Finance Tracking Group<\/a>, which counts the major players in climate finance tracking as members, on what they thought would be the right set of words to merge specificity with understandability. Our global climate finance tracking team<\/a> also weighed in.<\/p>\n\n\n\n

While it was easy to choose \u201cgreen\u201d to describe the so-called good finance, we heard differing ideas of how to phrase the \u201cbad\u201d finance. Top contenders from our research included:<\/p>\n\n\n\n