This has been a year of surprises in the financial world – and one of the most striking has been the shift in the agenda around green finance. Once seen as a niche activity, green finance is now shaping international policy and driving the allocation of billions of dollars in investment.

Just this Monday, world leaders at the G20 Summit in Hangzhou recognized the urgent need to scale up green finance by referencing its importance in a G20 summit's concluding communiqué for the very first time. The move underlines that governments alone cannot finance our transition to a low-carbon future or deliver the UN's Sustainable Development Goals.

It is estimated that financing for sustainable development will require annual investment flows of between US$5 and US$7 trillion. At present, less than one percent of global bonds are labeled green; a similar percentage of global institutional investments are green infrastructure assets. On top of that, only a small fraction of bank lending is explicitly classified as green according to national definitions.

Institutional investors are now seeing the inherent risks in this investment approach: long-term returns are increasingly exposed not just to climate disruption, but also to technological disruption and growing challenges such as water stress. Meanwhile, financial regulators are recognising that environmental degradation can pose risks to the financial system as a whole.

In response, post-Brexit London continues to develop its position as one of the global hubs of green finance – building on its reputation in recent years for promoting emerging sectors, from renminbi internationalization and Islamic finance to FinTech development. London is one of the premier venues for the provision of green financial services, including cutting-edge crowdfunding, climate modeling and carbon trading platforms. The UK has launched or hosted a number of global firsts such as issuance of landmark renminbi- and rupee-denominated green bonds. The aim is for anyone who thinks green, to think London.

Hong Kong is also responding. In May this year, the Financial Services Development Council (FSDC) published a paper entitled Hong Kong as a Regional Green Hub, in which the FSDC noted:"Hong Kong is uniquely placed to be the regional leader in green finance. If it does not seize this opportunity, others will do so."

Opportunity certainly looms large now that the Chinese mainland is playing a leadership role in green finance. In March 2015, the People's Bank of China estimated that China will need to invest over US$1.5 trillion in green projects during the 13th Five-Year plan period, with only around 15 percent likely to be provided by government.

As part of its presidency of the G20 this year, the Chinese mainland also launched the Green Finance Study Group, co-chaired by the UK, with UN Environment as the secretariat. In just six months, this group has developed a baseline review of the key trends, the barriers to progress and the practical steps that can be taken to strengthen policy signals, improve market capacity, encourage cross-border flows and deepen risk management.

Elsewhere, the Financial Stability Board's Task Force on Climate Disclosure has moved quickly to enlist the best of private sector experience to deliver its goal of a more consistent reporting framework. This will be crucial in enabling market participants to make informed decisions – and avoid shocks to financial markets.

Taken as a whole, below the radar activity by investors, regulators and policymakers adds up to what UN Environment labelled a "quiet revolution" in a 2015 report entitled: The Financial System We Need. It pointed to many market innovations, such as the burgeoning green bond market, which is predicted to surpass US$150 billion in market value before this year is out. It also highlighted deeper changes across the financial system as credit rating agencies embed climate risk and pension fund trustees move to embrace broader environmental considerations. The report also predicted green finance would become part of the competitiveness equation in both leading and emerging financial centres. Sure enough Hong Kong, France, Switzerland and the UK all launched initiatives to position themselves as the world's hub for green finance.

Of course, London and Hong Kong have been competing with each other for decades in a host of sectors. Importantly, this competitive dimension does not lead to a zero sum game. Rather, it acts as a driver for greater international cooperation and powerful convergence around key principles and standards that will enable the green finance market to grow with both integrity and efficiency. With this in place, 2017 looks set to take the market from the billions to the trillions we need to deliver global ambitions on climate change and a green economy.

Jeffrey Mountevans is the Lord Mayor of London and Elliott Harris is Assistant Secretary-General, United Nations.