Work Streams

Training, tools and guidance

'From awareness to action': training, tools and guidance for financial institutions

Climate change has been termed the single largest market failure of all times, based on the externality that the environmental costs associated with the emission of greenhouse gases are not born by the emitters themselves but by society at large. Therefore, an effective response to climate change has to achieve the internalization of such costs in a systematic manner, including by investors, lenders and insurers.

Following this logic, a price on carbon is being put in many jurisdictions, either through emissions trading schemes, carbon taxes and/or environmental liability laws. As a result, in order to remain competitive private sector actors in the real as well as the financial economy will increasingly have to achieve a more systematic integration of carbon considerations into operational and strategic decision-making. After having brought the sharpening financial relevance of climate change and corporate carbon performance to the attention of financial institutions worldwide, one of UNEP Finance Initiative’s focus areas is to now equip financial institutions with the capacity, guidelines and tools needed to ease and accelerate the above-mentioned integration: across geographies, business lines as well as product and asset classes. The aim is to enable investors, lenders and insurers to quantify and decrease the carbon intensity and climate change risk exposure of their activities.

The first step towards lower carbon-footprints consists in measuring them. The Climate Change Working Group (CCWG) of UNEP FI is developing methods and tools that will enable financial practitioners to measure the carbon footprint of their transactions, products and services

Current Projects

1. Investor Disclosure Project: Advancing the Carbon Footprinting of Investment Funds
2. Climate Change Online Course: Risks and Opportunities for the Finance Sector