Islamic Finance and the Principles for Responsible Banking

10 June 2021

Pioneering Islamic Finance and Principles for Responsible Banking Report Launched at Global Ethical Finance Summit

The Islamic Finance Council UK (UKIFC), in partnership with Malaysia based International Shari’ah Research Academy for Islamic Finance (ISRA) and the Global Ethical Finance Initiative (GEFI), has today launched the third report in its 4-part thought leadership series that aims to assist and encourage active engagement in support of the UN Sustainable Development Goals (SDGs) by the global Islamic finance sector.

Download the Report

UKIFC Senior Adviser Sultan Choudhury formally announced the report, to an audience of over 3,000 financial practitioners, at GEFI’s flagship annual Ethical Finance Summit.

The report provides an analysis of responsible banking in the Islamic finance sector, assessing the level of engagement with the Principles for Responsible Banking (PRB) amongst banks in Organisation of Islamic Cooperation (OIC) member states and analysing the approaches used by 9 Islamic finance signatories. It also features notes from interviews with Al Baraka Banking Group, Bank Pembangunan Malaysia Berhad, CIMB Group, Gatehouse Bank, Gulf International Bank (UK) and Jaiz Bank who have all shown notable leadership in responsible banking.  

The PRB, which launched in 2019, is the world’s leading framework for responsible banking and is underpinned by six Principles that help signatory banks to align with the SDGs and the Paris Climate Agreement.

With its underlying Shariah principles, Islamic finance is naturally aligned to responsible banking and is well positioned to lead the financial services sector’s efforts towards achieving the SDGs. However, whilst a small number of organisations are making significant progress the report has highlighted the pressing need to raise awareness, in OIC member states and beyond, of responsible banking and the benefits to be achieved by integrating Shariah compliance with sustainable finance strategies and becoming PRB signatories.

TAKEAWAYS FROM THE REPORT INCLUDE:

  • 49 of the 57 OIC member states do not contain any PRB signatory organisations.
  • When the PRB was launched in 2019, 14.3% of the founding signatories were based in OIC member states. Now only 10.0% of the 221 PRB worldwide signatories are based within OIC member states despite the OIC member states having a collective population of over 1.82 billion (24% of the total world population).
  • Of the 61 countries containing PRB signatory organisations, 13.1% are OIC member states.
  • Within the 8 OIC members states that contain PRB signatories there are 22 signatory organisations, located in Africa (50.0%), Europe (27.3%) and Asia (22.7%).
  • 38 PRB signatories offer Islamic finance products and services, which equates to 17.2% of all PRB signatories.
  • The majority of Islamic finance institutions that are PRB signatories, 27 of the 38 organisations, are based outside OIC member states, across Europe, Asia, Africa, Oceania and the Americas.
  • Only 3 of the 38 institutions offering Islamic finance products or services are fully Shariah-compliant, namely Al Baraka Banking Group (Bahrain), Gatehouse Bank (UK) and Jaiz Bank (Nigeria).
  • The most popular Islamic product / service offered by non-OIC member states signatories is corporate finance, with 40.7% of signatories offering this. Amongst OIC member states the most popular product / services are personal banking and personal, business and corporate banking, at 27.3%.

PRB signatories are currently underrepresented in OIC member states, suggesting the PRB should increase its activities within OIC member states. Awareness of the PRB in OIC member states could be increased through working groups, targeted awareness and outreach activities. Given the mutual benefits of becoming PRB signatories to both Islamic finance institutions and the responsible banking industry, increasing engagement should be treated as a priority.

Download the Report

 

“Islamic finance is naturally aligned with the UN Sustainable Development Goals (SDGs). But the low level of engagement with the Principles for Responsible Banking (PRB) in the OIC region means there is a huge opportunity. Through our Global Islamic Finance and SDGs Taskforce we have the platform to work with UNEP FI and PRB signatories to increase awareness, promote understanding and encourage adoption of the Principles amongst the Islamic finance sector.”

Omar Shaikh, Board Member, UKIFC

 

“UNEP FI welcomes this comprehensive report and analysis of the penetration rate and engagement of Islamic finance institutions with the Principles for Responsible Banking. We look forward to welcoming more Institutions engaged in Islamic finance, growing our community in the Organisation of Islamic Cooperation (OIC) member states, and we recognize the need for further engagement and participation amongst these institutions.

This series of reports also sheds light on the natural alignment of the Maqasid al Shariah with many areas of the SDGs. Frameworks such as the Principles for Responsible Banking can provide an accelerated pathway for Islamic finance institutions to meet the SDGs, furthering their journey of positive impacts on society and the environment, while continuing to enhance stakeholder value.”

Eric Usher, Head of United Nations Environment Programme Finance Initiative

 

About the Islamic Finance Council UK

The Islamic Finance Council UK (UKIFC) is a specialist, not-for-profit, advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. It has helped six countries develop enabling regulatory frameworks for Islamic finance, enhancing financial inclusion to over 15 million people, established the award-winning Ethical Finance Round Table series running since 2010, launched the world’s first joint venture between Islamic finance and the Church of Scotland, and delivered development sessions to over 500 Islamic scholars across the globe. In 2020 the UKIFC, alongside the British Government’s Treasury department, established the Islamic Finance and Sustainable Development Goals (SGDs) taskforce, which will be anchored in London.

UKIFChttps://www.ukifc.com/
SDG Taskforcehttps://www.ukifc.com/sdg/

Launch: UNEP FI Real Estate Impact Analysis Tool

17 June 2021 | Virtual Event

09:00 – 10:30 CEST | Register for launch now!

The Real Estate Impact Analysis Tool was developed to enable financial institutions to identify and assess the impacts associated with their real estate investments and portfolios. The purpose of such an analysis is for financial institutions to define strategies and set targets that will increase the positive impacts and decrease the negative impacts of their real estate investments and portfolios.

Features:

  • Builds on the  UNEP FI Positive Impact Real Estate Investment Framework Model Framework, based on the 22 impact areas of the UNEP FI Impact Radar
  • Enables Single Asset analysis or Fund/Portfolio level analysis
  • Applicable for new developments and exiting assets
  • Is compatible with GRESB
  • Enables both country level and local level contextualisation (needs assessment)

The methodology was derived from UNEP FI’s unique holistic approach to impact and the SDGs, as developed by its Positive Impact Initiative (PII), as such it is aligned with the Principles for Positive Impact Finance and is based on the 22 ‘impact areas’ of the UNEP FI Impact Radar. The Tool’s in-built resources, are based on internationally recognised standards from within and beyond the UN System.

The Real Estate Impact Analysis Tool is a live resource, designed to evolve over time in order to constantly improve user experience and benefits.

Join us for the launch event featuring the following speakers:

  • Geraldine Burnett, Corporate Social Responsibility Manager, Gatehouse Bank
  • Ryuichi Horie, Co-founder and CEO, CSR Design Green Investment Advisory
  • Ivan Rodriguez, Sustainability Director, Property Portfolio, Bridges Fund Management
  • Careen Abb, Programme Lead, Positive Impact, UNEP FI
  • Costanza Ghera, Consultant, Positive Impact, UNEP FI

Register for launch now!

Taskforce on Nature-related Financial Disclosures (TNFD) launched

4 June 2021

Major financial institutions, corporates and governments endorse launch of Taskforce on Nature-related Financial Disclosures, TNFD

  • A new global initiative aims to provide financial institutions and corporates with a complete picture of their environmental risks and opportunities.
    _
  • United Nations Environment Programme Finance Initiative (UNEP FI), United Nations Development Programme (UNDP), the World Wildlife Fund (WWF) and Global Canopy are founding partners.
    _
  • Two Co-Chairs appointed to lead the Taskforce: David Craig, CEO of Refinitiv and Group Leader of Data & Analytics Division at London Stock Exchange Group (LSEG), and Elizabeth Maruma Mrema, Executive Secretary of the UN Convention on Biological Diversity (CBD).
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  • Taskforce commits to delivering a framework by 2023 for organisations to report and act on evolving nature-related risks, to support a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes.

Major financial institutions and multinational corporates have endorsed the launch of a new market-led Taskforce on Nature-related Financial Disclosures (TNFD), which will support business in assessing emerging nature-related risks and opportunities.

More than half of the world’s economic output – US$44tn of economic value generation – is moderately or highly dependent on nature[1]. The recorded extinction of 83% of wild mammals and 50% of plants therefore represents significant risk to corporate and financial stability[2]. Action for nature-positive transitions could generate up to US$10.1 trillion in annual business value and create 395 million jobs by 2030[3].

A report titled ‘Nature in Scope’, published today, describes how the initiative will deliver a framework for organisations to report and act on evolving nature-related risks, in order to support a shift in global financial flows away from nature-negative outcomes and towards nature-positive outcomes. A complementary report sets out the proposed technical scope for the TNFD.

Through an inclusive approach, the initiative aims to consult with a variety of stakeholders from all regions – to develop and build on voluntary, consistent disclosures to help corporates, investors, lenders and insurance underwriters manage nature-related risks

In its first year, the TNFD aims to build upon the success of the Task Force on Climate-related Financial Disclosures (TCFD), which has become instrumental in mainstreaming the issue of climate-related financial risks. The TNFD’s framework for nature-related risks will complement the TCFD’s climate-related framework, to give companies and financial institutions a complete picture of their environmental risks.  Through its framework, the TNFD will support organisations to report and act on both their impacts and dependencies on nature. The framework will be tested and refined in 2022 before its launch and dissemination in 2023.

The initiative to bring together a Taskforce on Nature-related Financial Disclosures was first announced in July 2020. Since kicking off its work in September 2020, an Informal Working Group comprised of 74 Members across 24 countries – including financial institutions, corporates, governments, regulators, multilaterals, NGOs and consortiums – have worked to propose practical recommendations for the scope and workplan of the TNFD, which is released today. This informal group was ably co-chaired by market-leaders: Banorte, BNP Paribas and the Green Finance Institute.

Following the completion of this preparatory phase, the TNFD has formally appointed two Co-Chairs: David Craig, CEO of Refinitiv and Group Leader of Data & Analytics Division at London Stock Exchange Group (LSEG), and Elizabeth Maruma Mrema, Executive Secretary of the United Nations Convention on Biological Diversity (CBD).

The Taskforce will consist of approximately 30 members, with an equal representation of financial institutions, corporates and data/service providers from developed and emerging markets. It will be informed by a diverse Stakeholder Group.

Commenting, Elizabeth Maruma Mrema, Co-Chair of the TNFD, said: “Science and economists are clear: nature is too big to fail. The health of the ecosystems on which we, and our economies, depend is deteriorating more rapidly than ever. Over the next few years, we will work with Taskforce members, and other stakeholders, to design a framework that can be impactful and ultimately practical to companies and financial institutions. We encourage a wide range of financial institutions and corporates to participate in the TNFD and to become early adopters of the TNFD framework when it launches in 2023.”

Fellow TNFD Co-Chair, David Craig, also commented: “Without urgent action, ongoing loss to biodiversity poses unprecedented risks for business, both now and in the future. Better nature-related data that enables informed decision-making by financial institutions and companies is how we will solve the global ecological crisis. Financial disclosures are essential to a market-based solution to nature loss. A properly functioning, informed market will price in risks appropriately and be empowered to channel investments to more sustainable opportunities.”

Deputy Governor of the Banque de France, Sylvie Goulard, said: “For too long we took natural resources for inexhaustible and did not look at the consequences of human action on the planet. Climate change and the rapid loss of biodiversity invite us to transform our societies and economies, which means that finance needs to be transformed as well. The TNFD, a new global initiative, aims to give the finance sector a complete picture of environmental risks. The TNFD’s work on nature-related risks will be an important complement to the work already done on climate-related risks. Biodiversity is a systemic challenge and having a global platform for collaboration across private actors, international organisations, public authorities and NGOs is essential. The TNFD will support the development of more reliable and comparable nature-related data, which is critical to promote sustainable investments.”

Global Environment Facility CEO and Chairperson, Carlos Manuel Rodriguez, said: “Mainstreaming biodiversity into the financial sector is one of the prerequisites to reversing nature loss. The Global Environment Facility is a proud anchor investor in the TNFD and I have great expectations for this initiative. Helping companies, investors, and financial institutions to measure and address financial risks derived from biodiversity loss will help redirect financial flows into nature-positive investments. We need this kind of transparency to underwrite the changes the planet needs, both in the short and long-term.”

CEO of BNP Paribas, Jean-Laurent Bonnafé, said: “Collective action is needed to help protect our natural ecosystems and stop their degradation. BNP Paribas has already taken commitments to preserve biodiversity, but common and applicable standards are needed to leverage the power of finance for nature. The TNFD is key in convening market participants towards such standards.”

Global Chairman & CEO, KPMG International, Bill Thomas: “Biodiversity loss and the destruction of the natural world can only be prevented if we all push for urgent and necessary changes. A critical step is ensuring that our financial markets drive sustainable growth. KPMG is committed to helping accelerate that transformation, and we fully endorse the critical role the TNFD will play in shaping a nature-positive future.”  

Chief Sustainability Officer of Credit Suisse, Marisa Drew: “Our ability to protect and preserve the planet’s biodiversity is critical to its survival. We are proud to support the TNFD and the development of a framework that will guide companies to evaluate, operate and report on their impacts on nature while at the same time, supporting capital flows towards nature-positive outcomes.”

CEO of Wells Fargo Asset Management, Nico Marais: “As a global asset manager with clients and investments around the world, Wells Fargo Asset Management (WFAM) is aware of the increasing relevance of nature-related risks to both our economy and society – and the opportunities in addressing those risks. At WFAM, we strive to create thoughtful solutions and a future of which we can be proud. Therefore I’m excited that WFAM is participating in the TNFD’s efforts to develop a framework intended to support the assessment of nature-related financial risks, and to facilitate investors seeking sustainable solutions with ‘nature-positive’ outcomes.”

Juergen Voegele, Vice President for Sustainable Development, World Bank, Juergen Voegele, said: “Biodiversity is a key development issue, with the loss of ecosystem services affecting poor countries the most. While public sector and financial regulators create the necessary enabling conditions for nature-smart action, private sector finance will be necessary to reverse biodiversity loss. The Taskforce on Nature-related Financial Disclosures has a vital role as it seeks to better integrate nature-related risks into decision-making, leading to greener, more resilient and inclusive development outcomes.”

Head of Sustainability at H&M Group, Leyla Ertur: “Biodiversity and variety of life on earth is crucial to sustain healthy and functional ecosystems. It is only through collaborations that we can solve our global challenges within the loss of nature, and we believe that this joint taskforce on nature-related financial disclosure will play an important role for including biodiversity into our industry. We are happy to use our size and scale to transform our industry for the better.”

ENDS

Editor’s notes:

The Taskforce on Nature-related Financial Disclosures (TNFD):

The idea for a TNFD began in January 2019 at the World Economic Forum’s Davos meeting. The idea was catalysed further by Global Canopy, United Nations Development Programme (UNDP), United Nations Environment Programme Finance Initiative (UNEP FI), and the World Wildlife Fund (WWF), leading to the initiative of bringing together a Taskforce on Nature-related Financial Disclosures (TNFD) formally launching in July 2020, with the four organisations as Founding Partners.

The goal of the TNFD is to provide financial institutions and companies a complete picture of their environmental risks. Better information will allow financial institutions and companies to incorporate nature-related risks and opportunities into their decision-making processes.

In 2023, the TNFD will deliver a framework for organisations to report and act on evolving nature-related risks, in order to support a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes.

The Taskforce will consist of approximately 30 members, with an equal representation of financial institutions, corporates and data/service providers from developed and emerging markets.

Informal Working Group Members:

The TNFD has been catalysed through an Informal Working Group (IWG), established in September 2020, comprising 74 financial institutions, regulators, corporates and others. IWG members include:

Financial institutions and private firms:

AFD: Agence Française de Développement, France Aggrego Consultores, Brazil

 

AXA, France

 

BPCE/Natixis, France

 

BNP Paribas, France

 

BP, UK

 

Banco del Progreso, Alcaldía de Cúcuta, Colombia

 

Banco Sudameris, Paraguay Banorte, Mexico

 

BNDES – Brazilian Development Bank

 

CAF: Latin America Development Bank Citi, USA

 

Credit Suisse, Switzerland Danske Bank, Denmark

 

DBS Bank, Singapore

 

EBRD: European Bank for Reconstruction and Development

 

EcoAdvisors, Canada

 

EIB: European Investment Bank

 

Ernst & Young, USA

 

FAMA Investimentos, Brazil
FirstRand Group, South Africa

 

GlaxoSmithKline Plc, UK

 

H&M, Sweden

 

HSBC Pollination Climate Asset Management

 

Iberdrola, Spain
IFC: International Finance Corporation Impax Asset Management, UK

 

ISS ESG: Institutional Shareholder Services Inc, USA

 

JBS

 

Kering
KPMG

 

Lloyds Banking Group, UK

 

Manulife Investment Management

 

Maua Capital, Brazil

 

Mirova, France
NatWest Group, UK

 

Pimco, USA

 

Rabobank, Netherlands

 

Raiffeisen Switzerland

 

Reckitt Benckiser, UK

 

Rio Tinto

 

Robeco, The Netherlands Standard Chartered, UK

 

Storebrand Asset Management, Norway

 

Sumitomo Mitsui Trust Asset Management, Japan

 

Tesco, UK

 

Wells Fargo Asset Management, US

 

World Bank

 

Yes Bank Limited, India

 

 

Governments and regulators:

CNBV: Comisión Nacional Bancaria y de Valores, México COFEMA: Federal Council for the Environment of Argentina

 

Government of France

 

Government of the Netherlands

 

Government of Peru

 

Government of Switzerland

 

Government of the United Kingdom

 

RBA: Retirement Benefits Authority, Kenya

Think tanks and consortia:

CEBDS: Brazilian Business Council for Sustainable Development CDSB: Climate Disclosure Standards Board

 

CBD: Convention on Biological Diversity

 

CEDAF, Domincan Republic

 

CIFAL Argentina

 

Ecoacsa, Spain

 

FC4S: Financial Centers for Sustainability

 

SIF: Sustainable Insurance Forum

 

Finance for Tomorrow

 

GEF: Global Environment Facility

 

[1] WEF: Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy

[2] PNAS: The biomass distribution on Earth.

[3] WEF: New Nature Economy Report 2: The Future of Nature and Business

UNEP FI Regional Roundtable Africa and Middle East: Speakers

AGENDASPEAKERSSPONSORS AND PARTNERSREGISTER

UNEP FI Regional Roundtable Africa and Middle East: Sponsors

AGENDASPEAKERSSPONSORS AND PARTNERSREGISTER

Gold Sponsor – RepRisk

Founded in 1998 and headquartered in Switzerland, RepRisk is a pioneer in ESG data science that leverages the combination of AI and machine learning with human intelligence to systematically analyze public information and identify material ESG risks. RepRisk’s flagship product, the RepRisk ESG Risk Platform, is the world’s largest and most comprehensive due diligence database on ESG and business conduct risks, with expertise in 20 languages and coverage of 170,000+ public and private companies and 40,000+ infrastructure projects. For more than a decade, the world’s leading financial institutions and corporations have trusted RepRisk for due diligence and risk management across their operations, business relationships, and investments.

Resources:

Contact: 

UNEP FI Regional Roundtable for Asia Pacific: Sponsors and Partners

AGENDASPEAKERSSPONSORS AND PARTNERSWATCH RECORDINGS

Sponsors and Partners

Headline partner – DB Insurance

Among South Korea’s largest non-life insurers, DB Insurance (formerly Dongbu Insurance) sells an array of property/casualty insurance products. The company’s personal coverage includes homeowners, auto, accident and supplemental health coverage, and even a bit of life insurance and annuities. Its commercial products include fire, marine, and general casualty (product and professional liability, technology, and workmen’s compensation). The company boasts about 60 domestic branches and 23 customer service centers. DB Insurance has expanded outside of Korea with operations in Guam, the US, the UK, Indonesia, Myanmar, and China

 

Gold Sponsor – RepRisk

Founded in 1998 and headquartered in Switzerland, RepRisk is a pioneer in ESG data science that leverages the combination of AI and machine learning with human intelligence to systematically analyze public information and identify material ESG risks. RepRisk’s flagship product, the RepRisk ESG Risk Platform, is the world’s largest and most comprehensive due diligence database on ESG and business conduct risks, with expertise in 20 languages and coverage of 170,000+ public and private companies and 40,000+ infrastructure projects. For more than a decade, the world’s leading financial institutions and corporations have trusted RepRisk for due diligence and risk management across their operations, business relationships, and investments.

Resources:

Contact: 

UNEP FI Regional Roundtable for Asia Pacific: Speakers

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Speakers

Webinar Series: Addressing COVID-19 for the Environment

4 May - 15 June 2021

 

The UN Environment Management Group (EMG), in close collaboration with UNEP, UNEP-FI, UNESCAP, UNECE, UNECA, ECLAC, ESCWA, and RCNYO, will organize a 3-part series of virtual Nexus Dialogues on Addressing COVID-19 for the Environment.

The introductory dialogue Defining Green Recovery aims at pushing the needle forward to frame the rest of the series through stronger operationalization, to effectively monitor, evaluate and verify the impact of recovery and stimulus measures on environmental outcomes.

It is followed by a second dialogue Financing Green Recovery focusing on the important role of the public sector, and fiscal policy, that can support a stronger and greener economic recovery, whilst creating a collaborative and enabling environment for the private sector to mobilize resources to Build Back Better.

Finally, the third dialogue Regional Nexus Approaches to Building Back Better presents case studies on “Regional Acceleration of Climate Action and Decarbonization” and exchanges surrounding nexus thinking and integrated policy-making tools.

There will be three online Nexus Dialogues in the series covering:

  1. Defining Green Recovery (27 April 2021) – View event materials here
  2. Financing Green Recovery (4 May 2021) Registration Link
  3. Regional Nexus Approaches to Building Back Better (15 June 2021) Registration Link

Find out more here

Launch: Portfolio Impact Analysis Tool for Banks – Version 2

29 April 2021 | Webinar

29 April 2021 | 16:00 CEST | Register here

One year after the launch of its first version, UNEP FI is pleased to launch Version 2 of the Portfolio Impact Analysis Tool for Banks.

Developed jointly by UNEP FI’s Positive Impact Initiative, along with signatories of the Principles for Responsible Banking and UNEP FI member banks, the tool is designed to support banks in the implementation of their impact analysis requirements under the Principles.

New features include:

  • Dedicated section to support and document users’ preliminary scoping work
  • Increased capacity
  • Revised assessment section, including a new, in-built indicator library
  • Dashboard visualisation of the final outcomes of the analysis.

This version also includes numerous enhancements to user experience and will come with an updated User Guide. The new User Guide will include tips on how to apply UNEP FI’s unique holistic impact methodology with or without ‘off-the-shelf’ usage of the Tool.

Join UNEP FI, Piraeus Bank, SASB and working group members on 29 April 2021 at 16:00 CEST for a walk-through of the second version of the tool, insights from users, and find out what’s next in this vibrant part of UNEP FI’s work

Register here

COP26 & The Glasgow Financial Alliance for Net Zero

21 April 2021 | Online

 

21 April 2021 | 11:00 EDT | 16:00 BST | 17:00 CEST | Register here

Watch live here.

To deliver the Paris Agreement and achieve global net zero the whole financial system needs to transition its activities by 2050 at the latest.

Mark Carney, the UN Special Envoy for Climate Action and Finance – in partnership with the UK COP26 Presidency and the UN Race to Zero campaign – are launching a coordinating alliance that brings together existing and new net zero finance initiatives into one sector-wide strategic forum: The Glasgow Financial Alliance for Net Zero (GFANZ).

At this ‘US Climate Action Week’ event, political and finance leaders will show how this new alliance will act as the global net zero strategic coordination mechanism for the whole financial sector.  Ahead of the COP26 UN climate summit in Glasgow, its goal is to broaden, deepen and raise the ambition of the financial sector to achieve the Paris Agreement.

Already, a fundamental shift in capital is accelerating as the world’s largest asset owners and managers, controlling over USD$30 trillion, join the UN-backed Race to Zero campaign. But the finance gap still remains in the trillions of dollars, supply of capital to drive this transformation remains uneven across sectors, and concerted efforts are needed to translate necessary solutions into investable propositions.

Speakers include:

  • Mark Carney, UK Prime Minister’s Finance Advisor for COP26 and UN Special Envoy for Climate Action and Finance
  • John Kerry, US Special Presidential Envoy for Climate
  • Rishi Sunak, UK Chancellor of the Exchequer
  • Janet Yellen, US Secretary of the Treasury
  • Mike Bloomberg, UN Secretary-General’s Special Envoy for Climate Ambition and Solutions, UN Global Ambassador for the Race to Zero and Race to Resilience Campaigns, Founder, Bloomberg LP & Bloomberg Philanthropies
  • Nigel Topping, COP26 High Level Climate Action Champion
  • Gonzalo Muñoz, COP25 High Level Climate Action Champion
  • Inger Andersen, Under-Secretary-General of the United Nations and Executive Director of the UN Environment Programme
  • Nili Gilbert, Investment Committee Chair, David Rockefeller Fund
  • Amanda Blanc, CEO, Aviva
  • Michelle Scrimgeour, CEO, Legal & General Investment Management
  • David Blood, Senior Partner, Generation Investment Management
  • Oliver Baete, Chairman of the Board of Management of Allianz SE (CEO)

Join us to understand how the financial sector can come together to accelerate the transition to a net zero economy.

Register here.


UNEP FI’s Net-Zero initiatives:

UN-convened Net-Zero Banking Alliance

UN-convened Net-Zero Asset Owner Alliance

UN-convened Net-Zero Insurance Alliance (coming soon)

 

Regional Roundtable Africa and Middle East 2021

22-23 June 2021 | Virtual Event

AGENDASPEAKERSSPONSORS AND PARTNERSREGISTER

UNEP FI is hosting its Regional Roundtable on Sustainable Finance for Africa and Middle East as a virtual event on 22–23 June 2021, with the support of RepRisk. The virtual event will help define the role of banking, insurance and investment in shaping ambitious responsible and sustainable strategies to proactively address the challenges and opportunities of a green recovery whilst transitioning to a low-carbon, inclusive and sustainable future in Africa and Middle East.

Register now

Day 1
Geneva - 12:00
Kenya - 13:00

Opening remarks

Juliette Biao - Director and Regional Representative for Africa, UN Environment Programme


Geneva - 12:05
Kenya - 13:05
Next steps to financing a green and inclusive recovery in Africa and Middle East

Olufunso Somorin - Regional Principal Officer, African Development Bank
Nuru Mugambi - Public Affairs Director and Sustainable Finance Lead, Kenya Bankers Association
Amal Benaissa - Sustainable Finance Manager, Bank of Africa - BMCE Group
Dr Aisha Usman Mahmood - Special Adviser to the Governor on Sustainable Banking, Central Bank of Nigeria
Reuben Wambui - Regional Coordinator for Africa, UNEP FI
Geneva - 12:45
Kenya - 13:45
The role of finance institutions in financing a circular economy

Madeleine Ronquest - Head of Environmental and Social Risk, Climate Change, FirstRand Limited
Mofifoluwa Ayokunnumi Olawumi - Sustainability Partnerships, Access Bank PLC
Peter Odhengo - Climate Finance Policy Advisor, National Treasury Kenya
• Moderator: Peggy Lefort - Resource Efficiency Coordinator, UNEP FI


Geneva - 13:50
Kenya - 14:50
Mapping ocean finance for a new decade: Sustainable Blue Economy Finance

Lucy Holmes - Senior Programme Manager Seafood Finance, WWF
Francis Chen - Senior Manager, Green Finance, Industrial Bank Co., Ltd. (CIB)
Melissa Walsh - Program Manager, Ocean Finance Initiative, Asian Development Bank (ADB)
• Moderator: Dennis Fritsch - Program Coordinator, Blue Economy Finance Initiative, UNEP FI
Geneva - 14:40
Kenya - 15:40
Harnessing insurance for the Sustainable Development Goals (iSDGs)

Dr Caesar Mwangi - CEO, ICEA LION Insurance Holdings
Hope Murera - CEO, Zep Re
Sergio Dias - Head of Key Account Management, RepRisk
Sesilia Tshotshawo Nkoshi - Senior Underwriter for Non-life Reinsurance, Namibia National Reinsurance Corporation
Butch Bacani - Programme Leader, UNEP Principles for Sustainable Insurance
Day 2
Geneva - 12:00
Kenya - 13:00

Opening Remarks

Sami Dimassi - Director and Regional Representative for West Asia, UN Environment Programme
Geneva - 12:05
Kenya - 13:05
Achieving net-zero for Africa and Middle East

Judith Sidi Odhiambo - Head of Corporate and Regulatory Affairs, KCB Group Plc
Dr Dalia Abdel Kader - Chief Sustainability Officer, Commercial International Bank Egypt
Davinah Milenge Uwella - Principal Programme Coordinator, African Development Bank
• Moderator: Remco Fischer - Climate Lead, UNEP FI

Geneva - 12:50
Kenya - 13:50

Addressing climate risks through UNEP FI's TCFD programme

David Carlin - TCFD Programme Lead, UNEP FI
Maheen Arshad - TCFD Programme, UNEP FI
Geneva - 13:50
Kenya - 14:50
Financial inclusion and risk protection for a resilient society

Lesley Ndlovu - CEO, Africa Risk Capacity
Laila Hosny - Head of CSR and Sustainable Development, ALEXBANK
• Moderator: Rachael Mpashi-Marx - Project Manager, UNEP FI

Geneva - 14:40
Kenya - 15:40
Projects and partnerships to advance sustainable finance in MENA

Sina Hbous - Executive Director, Regional Center for Sustainable Finance (FRA)
Lamia Merzouki - Deputy General Manager, Casablanca Finance City Authority (CFCA)
Sujala Pant - Chief Technical Advisor, SDG - Climate Facility Project (multi-partner)
Dr Nasser H. Saidi - Chairman of the Regional Clean Energy Business Council
• Moderator: Nuran Atef - Regional Coordinator for MENA, UNEP FI

 

Contact:

  • For speaking opportunities, sponsorship or general enquiries, please contact Mustafa Chaudhry – mustafa.chaudhry@un.org

UNEP FI Regional Roundtables on Sustainable Finance 2021

22 June - 10 December 2021 | Virtual Events

UNEP FI will host its third round of Regional Roundtables on Sustainable Finance in 2021 virtually to provide an opportunity for members and actors in the sustainable finance community to come together locally to discuss the latest trends and innovations, and share good practice.

The virtual Roundtables will bring together 3000+ UNEP FI members and sustainable finance practitioners for insights into advances in sustainable finance in 5 regions across the globe. The events will provide insight into key developments such as the benefits of sustainable finance integration in national economies, Principles for Responsible Banking and the reporting framework, positive impact finance for the Sustainable Development Goals, implementation progress of the Principles for Sustainable Insurance, climate related disclosures, sustainable infrastructure and cities, green bonds, innovation in sustainable finance, blue economy finance and ESG in underwriting.

Region

Date

Registration

Asia Pacific 1-3 June Register here
Africa and Middle East 22 -23 June Register here
Latin America and Caribbean 31 August – 1 September Coming soon
North America October Coming soon
Europe November Coming soon

Building on over two decades of successful Roundtables, these regional events are designed to create rich opportunities for UNEP FI members to connect with one another and to raise awareness of sustainable finance work in progress across banking, investment, and insurance.

Why participate?

  • Gain insights into emerging knowledge and best practice in key environmental, social and governance (ESG) areas and inspirational market leadership
  • Showcase and learn about leading-edge sustainable finance practice and the future direction of the industry
  • Get connected with leaders in sustainable finance
  • UNEP FI members will have exclusive opportunities to participate in networking activities and workshops to engage key stakeholders and collaborate on initiatives aimed at changing finance and financing change

UNEP FI Global Roundtable 2020 – Watch the highlights and session recordings!

UN Environment Programme Finance Initiative (UNEP FI) hosted its 16th Global Roundtable virtually on 13–14 October 2020. Held under the theme of “Financing a Resilient Future”, the GRT brought together decision-makers, experts and thought leaders on a virtual event platform, and help shape approaches to integrating environmental, social and governance (ESG) issues and accelerating sustainable banking, insurance and investment.

Watch the highlights and session recordings here.


Partnership & Sponsorship Opportunities

Showcase your brand at the UNEP FI Regional Roundtables – key agenda-setting events on sustainable finance in your region – bringing together hundreds of leaders from all parts of the financial system as well as from civil society, academia, government and the United Nations.

Please email grt@unepfi.org for more information.

Regional Roundtable Asia Pacific 2021

1-3 June 2021 | Virtual Event

AGENDASPEAKERSSPONSORS AND PARTNERSWATCH RECORDINGS

UNEP FI hosted its Regional Roundtable on Sustainable Finance for Asia Pacific as a virtual event on 1–3 June 202, with the support of DB Insurance and RepRisk. The virtual event helped define the role of banking, insurance and investment in shaping ambitious responsible and sustainable strategies to proactively address the challenges and opportunities of a green recovery whilst transitioning to a low-carbon, inclusive and sustainable future in Asia Pacific.

View recordings of all sessions here

UNEP FI’s biennial Regional Roundtable for Asia Pacific, part of its major five regional event series on sustainable finance, showcased responses from the Asia Pacific region to the emerging global trends in ESG. Held under the theme of “Acceleration of Sustainable Finance in Asia Pacific”, the event welcomed over 600 finance professionals to deepen insight into leading market practice in areas such as financing the net zero transition, Sustainable Development Goals and the blue economy as well as cutting edge thinking on environmental liability insurance. The Roundtable was also be the platform for the premier launch of the new UNEP FI Impact Analysis Tools for Investment Portfolios & Real Estate as well as a study on physical risks of climate change for property.

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Agenda

Languages available: English, Korean in all sessions. Japanese in 1 session.

1 June - Day 1
Geneva - 08:00
Bangkok - 13:00
Beijing/KL- 14:00
Seoul/Tokyo - 15:00
Welcome & Opening remarks
Eric Usher - Head, UNEP FI
Geneva - 08:10
Bangkok - 13:10
Beijing/KL- 14:10
Seoul/Tokyo - 15:10
Advancing Sustainable Finance in Asia Pacific
English and Korean

Jacki Johnson - Advisor Climate and Sustainability, Insurance Australia Group Limited and Co Chair Australian Sustainable Finance Initiative (ASFI), and Co-Chair of UNEP FI Global Steering Committee
Siobhan Toohill - Co-Chair of Banking Board, UNEP FI and Group Head of Sustainability at Westpac
Edward Moncreiffe - CEO of HSBC Insurance (Asia) & HSBC Life (International) and Board Member of UNEP Principles for Sustainable Insurance
Alexandra Mihailescu Cichon - Executive Vice President, Sales and Marketing, RepRisk
• Moderator: Yuki Yasui - Regional Coordinator for Asia Pacific, UNEP FI
Geneva - 09:00
Bangkok - 14:00
Beijing/KL - 15:00
Seoul/Tokyo - 16:00
Financing the net zero transition in Korea
English and Korean


Sung-Hyun Park - Vice-President, Shinhan Financial Group
Jin-Young Kim - Managing Director, ESG Division, KB Financial Group
Han-Seung Kum - Director General, Climate Change Policy Bureau, Ministry of Environment in Korea
Dae Woong Lim - Regional Coordinator for Korea, UNEP FI
Sang-Chun Han - Chief Writer, Korea Economic Daily
2 June - Day 2
Geneva- 04:00
Bangkok - 09:00
Beijing/KL- 10:00
Seoul/Tokyo - 11:00

Addressing physical risks of climate change for real assets
English and Korean

Jim Clayton - Director and Timothy R. Price Chair, Brookfield Centre in Real Estate & Infrastructure
Mervyn Tang - Senior Director, Global Head of ESG Research, Sustainable Finance, Fitch Ratings
Carlos Sanchez - Director of Climate Resilient Finance, Willis Towers Watson
• Moderator: Matthew Ulterino - Property Working Group Coordinator, UNEP FI
Geneva - 08:00
Bangkok - 13:00
Beijing/KL- 14:00
Seoul/Tokyo - 15:00
Impact Analysis for investment portfolios and real estate: New tools by UNEP FI
English and Korean

Takahiro Kogi - ESG Manager, Nomura Real Estate Asset Management Co.
Angela Wiebeck - Head of UBS in Society Program Office, UBS
Jani Maenpaa - Portfolio Manager, LHV
Ivan Rodriguez - Sustainability Director, Property Funds, Bridges Fund Management
• Moderator: Careen Abb - Positive Impact Lead, UNEP FI
Geneva - 09:00
Bangkok - 14:00
Beijing/KL - 15:00
Seoul/Tokyo - 16:00
Accelerating sustainable finance and its vision in Japan
English, Japanese and Korean

Tsukasa Kanai - Chief Sustainability Officer, Mitsui Sumitomo Trust & Banking Corporation
Shinichi Tsunoda - General Manager, Sustainable Business Promotion Office
Akane Enatsu - Head of Nomura Research Center of Sustainability (NRCS), Nomura Institute of Capital Markets Research (NICMR)
• Moderator: Yuki Yasui - Regional Coordinator for Asia Pacific, UNEP FI

3 June - Day 3
Geneva- 04:00
Bangkok - 09:00
Beijing/KL- 10:00
Seoul/Tokyo - 11:00

Mapping ocean finance for a new decade: Sustainable Blue Economy Finance
Chinese, English and Korean

Lucy Holmes - Senior Programme Manager Seafood Finance, WWF
Mitsuno Inada - Deputy General Manager/Manager, Sustainability Division, Corporate Planning Department, Tokio Marine & Nichido Fire Insurance Co., Ltd./Tokio Marine Holdings, Inc.
Francis Chen - Senior Manager, Green Finance, Industrial Bank Co., Ltd. (CIB)
Melissa Walsh - Program Manager, Ocean Finance Initiative, Asian Development Bank (ADB)
• Moderator: Dennis Fritsch - Program Coordinator, Blue Economy Finance Initiative, UNEP FI
Geneva - 08:00
Bangkok - 13:00
Beijing/KL- 14:00
Seoul/Tokyo - 15:00
Environmental liability insurance - Preliminary outcomes of a study
English and Korean

Seok Ryu - Executive Director, DB Insurance
Judith Golova - Head of Environmental Insurance, Marsh
Lauren Clarke-Wiest - Innovation and Co-creation Lead, Enterprise Client Group. Aon
Dylan Bryant - Consultant, UNEP Principles for Sustainable Insurance Initiative
• Moderator: Butch Bacani - Programme Lead, UNEP Principles for Sustainable Insurance (PSI)
Geneva - 09:00
Bangkok - 14:00
Beijing/KL - 15:00
Seoul/Tokyo - 16:00
What finance institutions need to know about UN Biodiversity Conference (CBD COP 15)
Chinese, English and Korean

Dechen Tsering - Regional Director, Asia Pacific, UN Environment Programme
Elizabeth Mrema - Executive Secretary, United Nations Convention on Biological Diversity (UNCBD)
Peiyuan Guo - Chairman of SynTao Green Finance and UNEP FI Advisor in China
Ryan Bjorkquist - Director, Environmental & Social Risk Management, Standard Chartered Bank
Rosemary Bissett - Head of Sustainability Governance & Risk, National Australia Bank
• Moderator: Jessica Smith - Ecosystems Lead, UNEP FI

 

12 leading organisations appointed to Civil Society Advisory Body of the Principles for Responsible Banking 

16 March 2021

Geneva, March 16 2021 – Today sees the launch of the Civil Society Advisory Body of the Principles for Responsible Banking (‘the Principles’). Composed of 12 leading organisations, the body is a unique, first-of-its-kind forum for constructive and meaningful engagement between wider civil society and the collective banking industry.

It is a key mechanism to help the Principles maintain ongoing relevance with societal needs and ensure signatory banks deliver on their commitments with ambition and transparency. The new body consists of the following organisations: Business & Human Rights Resource Centre, Ceres, Conservation International, Climate Action Network, FGVces, International Labor Organization (ILO), John D. Gerhart Center, Share Action, SASB – Sustainability Accounting Standards Board, The European Federation of Investors and Financial Services Users (Better Finance), UNI Finance – UNI Global Union, and WWF

“The creation of the Civil Society Advisory Body represents the final important piece in the governance of the Principles for Responsible Banking.”
– Eric Usher, Head of UNEP FI

Each organisation represents a geographical region, a sustainability theme (such as climate, nature, human rights, and gender) or a stakeholder group (such as employees, retail and SME clients of the financial sector).

They will also contribute to, and support, the effective implementation of the Principles  by engaging with the banking board and signatory banks collectively, providing regular input to progress evaluations, and advising on strategy and framework revisions. Over 45 organisations applied to the Body, and successful applicants were appointed following a robust and transparent selection process. The members of the Civil Society Advisory Body will also engage and consult with relevant organisations in their representative areas, to ensure that they reflect the diverse views of wider civil society.

“The diverse nature of the body, as well as the extremely high level of expertise brought by these organisations will ensure the Principles for Responsible Banking stay relevant to society’s needs and signatory banks are able to constructively engage at a collective level, delivering on their commitments with transparency and accountability.”
-Eric Usher, Head of UNEP FI

 
More on the Civil Society Advisory Body

 
More on the Principles for Responsible Banking

The Land Bank: Our financial sustainability relies on nature

11 March 2021

The South African development bank for the agriculture sector and UNEP FI member is taking action on nature-related risks, as drought contributes to loan defaults in their portfolio.

Natural capital risks are not hypothetical for South Africa’s Land Bank. The development bank dedicated to serving the agricultural sector recently found many of its clients defaulting on their loans due to drought.

“Historically, the Bank has been very responsive to droughts, but it has treated them as single events and hasn’t looked at them in the context of climate change,” says Nehru Pillay, General Manager, Research and Intelligence at the Land Bank. “We need to look at the bigger picture now and have a long term response to climate change.”

Alongside responding to the climate crisis and other nature-related risks, a priority for Land Bank is shifting its portfolio towards serving emerging farmers and removing the legacy of past racial and gender discrimination. In the next few years, the Bank aims to increase its proportion of loans to black smallholder farmers and agri-businesses. To ensure the long-term success of South Africa’s agriculture sector, Land Bank considers it vital to simultaneously support equitable ownership of land and tackle natural capital risks.

“Finance is still often seen as separate from environmental sustainability, but this is a problem. As an agriculture bank, everything Land Bank does ultimately relies on the environment.”
– Nehru Pillay, General Manager, Research and Intelligence at Land Bank

Moving beyond compliance 

Land Bank has been looking at natural capital since 2012. At that time, putting an environmental and social strategy in place was made a condition to a loan the Bank was receiving from the African Development Bank. Initially, Land Bank’s natural capital work centered around proving compliance with environmental laws and regulations, but in 2016, new management initiated a change in thinking. “The new message within the bank became ‘for Land Bank to survive, the natural environment has to survive,’” explains Nehru Pillay. “As a result, the Bank changed and revised risk assessment policies and processes.”  In 2018, Land Bank joined the Principles for Responsible Banking, committing to aligning its business with the UN Sustainable Development Goals and the Paris Climate Agreement.

Understanding impacts and dependencies

“We are now grappling with many environmental risks at the same time,” explains Nehru Pillay. “Especially important for us is climate risk, including reporting in line with the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), and water. Biodiversity will also become an increasingly important topic.”

Over the last two years, the Bank has been engaging with the ENCORE tool to improve understanding of natural capital risks. Developed by the Natural Capital Finance Alliance (NCFA), a joint initiative of Global Canopy and UNEP FI, in collaboration with UNEP-WCMC, ENCORE maps impacts and dependencies on ecosystem services across 68 industries and 157 sub-industries. Financial institutions can then use this data to undertake company and project level analysis.

Over the last six months, Land Bank has collaborated with the NCFA on applying a Rapid Natural Capital Risk Assessment, using ENCORE. Focusing on large-scale irrigated and rain-fed maize production in the North West Province of South Africa, the risk assessment improved the Bank’s insight into natural capital risks by identifying which ecosystem services and natural capital assets its lending activities depend on. The assessment also allowed the Bank to identify previously hidden systemic risks in its portfolio not captured by traditional financial models, which they are now able to address.

Material ecosystem services and natural capital assets for maize production (ENCORE, 2020)

“ENCORE is one of the tools helping us deliver on the commitments we made under the Principles for Responsible Banking.”
– Nehru Pillay, General Manager, Research and Intelligence at Land Bank

Integrating natural capital across the bank

Understanding the overarching natural capital risks for the Bank is a first step. Assessing and managing those risks then requires the whole Bank to get onboard. “In the sustainability team, we depend on our frontline colleagues who are interfacing with the clients,” says Nehru Pillay. “And we also need to work with our credit governance structures to ensure they give greater weight to environmental risk.”

To strengthen the understanding of natural capital across the bank, Land Bank employees participated in training sessions from the Natural Capital Finance Alliance and UNEP-WCMC in November last year. “Each employee and function within the bank must understand how new risk assessment procedures for natural capital are essential to the financial success of the bank,” explains Nehru Pillay.

Creating green financial products

Land Bank will continue to ramp up its work on natural capital in the coming years. “We will strengthen our climate-focused interventions first. We will do more on energy, and we’ll do a lot on water,” Nehru Pillay says. On the climate mitigation side, the Land Bank is focusing on engaging with farmers on their energy consumption. To assess and manage water risks, the Bank is working with farmers to better understand how they manage their water. Land Bank is also exploring how to design green or climate-smart financial products for its clients.

Tackling biodiversity risk

Land Bank expects that biodiversity risks will be more difficult to tackle than climate and water risks, as data and metrics are more complicated for nature. But momentum for action continues to build as biodiversity loss and the associated risks continue to increase, and the Bank recognises that the trio of risks are all interlinked.

“All the banks want to familiarise themselves with biodiversity now. The challenge is how you gather all the information and data you need to assess that risk.”
– Nehru Pillay, General Manager, Research and Intelligence at Land Bank

New tools are emerging to support banks in assessing and managing their biodiversity risk: ENCORE is launching a biodiversity module later this spring. The initiative to bring together a Taskforce for Nature-related Financial Disclosures (TNFD) is working towards launching the Taskforce itself this year. Large multilateral development banks continue to strengthen their stance on nature and biodiversity alongside climate, which will also enable and incentivise other lenders to follow suit.

Written by Beate Triantafilidis, Content Lead, Finance Sector at Global Canopy
First published on Natural Capital Finance Alliance | Photo by Bence Balla-Schottner on Unsplash

The NCFA has published a step-by-step guide for natural capital risk assessments for banks. Watch this space for upcoming updates of the ENCORE tool: New functionalities are launching this month, and a new biodiversity module will be released later this spring. Follow us on social media to stay up to date with the latest: @NatCapFinance @globalcanopy @UNEP_FI @unepwcmc

 

Sustainable Investment Forum Europe 2021

13-22 April 2021 | Online

4 Part Digital Event Series – 13th, 15th, 20th, 22nd April 2021

UNEP FI is partnering with Climate Action for the 4th annual Sustainable Investment Forum Europe which returns in April 2021 as a 4-part digital event series across 2 weeks.

The Forum will convene over 1,850 asset owners and investment managers, institutional investors, pension funds, banks, development banks, policymakers, think tanks and NGOs to continue to build the momentum for sustainable finance and responsible investment.

Delivered on a sophisticated digital event platform, the Forum will encourage debate in a dynamic, engaging, and interactive way.

Why attend?

  • Learn how investors are aligning with climate goals
  • Engage and network with a range of asset owners, asset managers and senior policy makers
  • Hear from influential speakers who will share views on how Europe’s sustainable finance market is progressing
  • Explore and compare sustainability strategies

Key Speakers:

  • Eric Usher, Head, UNEP FI
  • Valentijn van Nieuwenhuijzen, Chief Investment Officer, NN Investment Partners
  • Nicholas Pfaff, Managing Director & Head of Sustainable Finance, ICMA
  • Eva Halvarsson, CEO, AP2
  • David Carlin, TCFD Programme Lead, UNEP FI
  • Chris Faint Head of Department, Climate & Small Mutuals Division, Bank of England
  • Joël Prohin, Head of Investment Management Department, Asset Management Division, Caisse des dépôt
  • Heike Reichelt, Head of Investor Relations and Sustainable Finance, World Bank
  • Carine Smith Ihenacho, Chief Governance & Compliance Officer, Norges Bank Investment Management

How to Register:

You can register online here. Please contact Rachel Cooper, Climate Action, directly if you have any questions on +44 (0) 207 871 0173 or email at rcooper@climateaction.org

How to Finance a Sustainable Ocean Recovery – Seminal New Guidance Published

2 March 2021

New guidance published today provides a market-first, practical toolkit for financial institutions to take immediate action on their lending, investment and underwriting activities which negatively impact ocean health.

The ocean covers 70% of the earth’s surface, holding 97% of all water and 80% of all life forms. Major ocean sectors such as tourism, shipping, fishing, aquaculture and marine renewable energy collectively contribute to a ‘blue’ economy, estimated at a global gross value added of USD 1.5trn in 2010. This is projected to double in size to USD 3trn by 2030, with some ocean industries set to grow faster than the global economy (OECD, 2016).

However, ocean health is under existential threat. Faced with the triple crises of pollution, nature loss and climate change, two-thirds of our oceans have been negatively altered by human activity; leaving industries, businesses and livelihoods exposed. With existing financing still largely directed towards unsustainable sectors and activities, it is critical that all sectors of the blue economy are rapidly transitioned towards sustainable pathways.

Banks, insurers and investors have a major role to play in financing this transition to a sustainable blue economy, helping to rebuild ocean prosperity and restore biodiversity to the ocean. Through their activities, and client relationships, financial institutions have a major impact on ocean health and hold the power to accelerate and mainstream the sustainable transformation of ocean-linked industries. They thereby play essential roles in wider ocean governance, engaging in public-private partnerships, and propelling local-to-global actions for sustainability.

“Momentum is building as more banks, insurers and investors wake up to the realisation that their financial activities can have a sizeable impact on ocean health, creating a negative feedback loop for key ocean industries such as shipping, fishing, tourism and marine renewables. A new sustainable pathway for the blue economy is thus both an environmental and economic necessity. This critical new guidance provides a practical toolkit for financial institutions to understand their impact and discover how a new sustainable finance approach can help them identify key risks and opportunities in ocean-linked sectors.”  – Eric Usher, Head of UNEP FI

Leveraging best practice based on input from more than 50 pioneering institutions and experts, this guidance sets out pathways to sustainable growth across five key ocean sectors, chosen for their established connection to private finance. It includes recommendations with a detailed breakdown of which activities to seek out as best practice, which activities to challenge, and which activities to avoid financing completely due to their damaging nature.

This guidance provides decision-makers across banking, insurance and investment with a science-based and actionable toolkit, giving easy-to-follow recommendations on how to approach financial activity related to:

  • Seafood, including both fisheries and aquaculture as well as their supply chains;
  • Ports;
  • Maritime transportation;
  • Marine renewable energy, notably offshore wind; and
  • Coastal and marine tourism, including cruising.

It supports the implementation of the Sustainable Blue Economy Finance Principles – a keystone for financing activities in the blue economy, supported by a community of over 50 institutions worldwide with a collective total asset size of over USD 6trn. 

Download the guide and recommendations 

“Decades of unsustainable consumption and production is leading to environmental risks and losses in natural capital, eroding the ocean’s resource base. Without engagement by financial institutions, we will not be able to change the course to sustain a healthy ocean and unlock its enormous potential. 1$ of sustainable ocean investments can yield 5x higher global benefits. This new guidance can help financial institutions invest in good ocean governance at local, regional and global levels. In a nutshell, making sustainable blue economy opportunities too hard to resist”.  – Leticia Carvalho, Head of the Marine and Freshwater Branch, UNEP

About the Sustainable Blue Economy Finance Initiative: UNEP FI convenes a global financial community on Sustainable Blue Finance, focused on the ocean and sustainable use of marine resources which supports the implementation of the Sustainable Blue Economy Finance Principles. The initiative works across the financial community to provide guidance and frameworks to ensure investment, underwriting and lending activities are aligned to the UN Sustainable Development Goal 14, ‘life below water’ enabling financial institutions to rebuild ocean prosperity, restore biodiversity and regenerate ocean health.

Turning the Tide: How to Finance a Sustainable Ocean Recovery

Published March 2021

A practical guide for financial institutions to lead a sustainable ocean recovery

This seminal guidance is a market-first practical toolkit for financial institutions to pivot their activities towards financing a sustainable blue economy.

Designed for banks, insurers and investors, the guidance outlines how to avoid and mitigate environmental and social risks and impacts, as well as highlighting opportunities, when providing capital to companies or projects within the blue economy. 

Five key ocean sectors are explored, chosen for their established connection with private finance: seafood, shipping, ports, coastal and marine tourism and marine renewable energy, notably offshore wind. 

Download the Guide & Recommendations

Accompanying the guidance is a set of easy-to-follow recommendations on how to approach financial activity in ocean sectors, allowing financial decision-makers to take immediate action.

The download is a compressed zip folder that includes a useful Excel file with a sector-by-sector breakdown of sustainable blue finance recommendations.

Combined, the guidance and recommendations provide a road map with a detailed breakdown of which client activities to seek out as best practice, which activities to challenge, and which activities to avoid completely due to their damaging nature.  

The guidance leverages best practice based on input from over 50 pioneering institutions and experts. It supports the implementation of the Sustainable Blue Economy Finance Principles, which are a keystone in the market for financing a sustainable blue economy. The Guidance is a follow-up to the Rising Tide report which was launched in February, which mapped the ocean finance space and provided an entry point for financial institutions. 

If you are looking to easily implement sustainable ocean finance strategies and learn best practice from 50+ finance organisations, download the guide today.

Download the executive summary in English | French | German | Chinese

Find the cover notes for Banking PRB | Insurance PSI | Investment PRI

Recommended exclusions list

Based on the market-first practical guidance Turning the Tide, UNEP FI developed a recommended exclusions list for a sustainable blue economy. The document provides financial institutions with an overview of activities to exclude from financing due to their damaging impact on the ocean and high risk. 

Download the recommended exclusions list

 

 

Critical tools and recommendations for managing the climate transition for the banking industry

17 February 2021

Geneva, 17 February 2021 – Transition risk poses a significant near-term threat to the economy. This is one of the findings released today in the latest set of three UNEP Finance Initiative reports on climate risk management tools for financial institutions. The latest guidance is the result of a leading-edge project that convened 39 banks to pilot the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) building on previous UNEP Finance Initiative work. The package of reports also includes guidance on understanding how the impacts of climate change and the low-energy transition may impact our society and economy and an overview of the various tools and analytics available, as well as the potential technological and regulatory developments that may shape climate risk tools in the future.

Climate scenario analysis is a key tool in measuring and managing climate risks. Climate scenarios produced by Integrated Assessment Models (IAMs) are increasingly being used by financial institutions to identify and assess climate risks. UNEP FI’s report, ‘Pathways to Paris’ is a practical guide for financial practitioners looking to understand and apply climate scenarios. Co-authored with the Center for International Climate Research (CICERO), a world-renowned research institution on climate and climate finance, the report examines the driving assumptions and sectoral coverage of the models used to produce climate scenarios, as well as the benefits and limitations of using these pathways. As the report argues, deeper collaboration and dialogue between financial institutions and scenario developers is essential to linking climate-related risk drivers to financial impacts.  Over the course of the past year, UNEP FI has piloted its transition risk methodology with 39 banks. This paper outlines the lessons learned and a series of recommendations for enhancing the development and application of IAMs by financial institutions. Reflecting these views, a North American bank explained that greater granularity, additional consideration of sectoral dynamics, and shorter time-horizons would help financial institutions more effectively use these scenarios. In CaixaBank’s case study, they highlighted a need for greater transparency in the models’ “underlying assumptions” and the treatment of “reputational risks” and “stranded assets,” within the scenarios.

Decarbonisation and Disruption’ highlights the ways in which many sectors are exposed to transition risk. If not properly managed, a disorderly transition could have major ramifications for financial stability. Financial institutions need to not only prepare for the transition along with their counterparties but must have the right tools for risk assessment. Insert example from case study here if poss. This paper was supported with analysis from Oliver Wyman, a leading global management consultancy with deep risk expertise. The paper includes bank case studies that affirm greater economic risks associated with disorderly transition scenarios compared with orderly transition scenarios. Banco Bradesco’s case study highlighted the usefulness of the assessment exercise, stating that “transition risk analysis tools are important allies to identify subsectors that are most resilient to policies aimed at a low carbon economy, as well as those that are most exposed to these risks.”

There is a burgeoning market for physical and transition risk tools which may be difficult to navigate. UNEP FI’s report, ‘The Climate Risk Landscape’ provides an overview of the various tools and analytics available, including an assessment of their key characteristics. The report also looks at the potential technological and regulatory developments that will shape climate risk tools over the coming years. In comparing the methodologies and coverage across tools, UNEP FI offers financial users a view of the relative benefits and limitations of each approach.
Reflecting on the guidance and experiences showcased in the two reports, UNEP FI Head, Eric Usher said, “as these scenario reports indicate, deeper collaboration and dialogue between scenario developers and financial practitioners is essential for linking climate-related risk drivers to financial impacts. Over the past year, UNEP FI has repeatedly brought together these parties (along with regulators and supervisors) to support the adoption of climate scenarios in financial decision-making.”

These three reports on climate risk analysis complement previous guidance on this topic which also covered climate risk disclosure practices as well as high-level transition-risk heatmapping and sectoral analysis.

In 2021, UNEP FI launched its latest TCFD programmes for banks and investors, building on the key learnings and achievements of prior pilots. These new programmes will bring new joiners up to speed on the fundamentals of climate risk assessment, while exploring such topics as climate scenario analysis, integrating physical and transition risk analysis and road-testing some of the commercially available climate risk tools identified in ‘The Climate Risk Landscape’. By leveraging the convening power of the United Nations, UNEP FI’s TCFD programme will engage regulators, climate experts, and financial practitioners to empower the financial sector to manage its climate risks and play a positive role in the low-carbon transition.

Further Resources

Download a copy of ‘Decarbonisation and Disruption

Download a copy of ‘Pathways to Paris

Download a copy of ‘The Climate Risk Landscape


Notes to Editors

About UNEP FI’s TCFD Programmes for banks, insurers and investors

The Task Force on Climate-Related Financial Disclosures (TCFD) was created in 2015 by the Financial Stability Board (FSB) to develop consistent climate-related financial risk disclosures for use by companies, banks, and investors in providing information to stakeholders. Increasing the amount of reliable information on financial institutions’ exposure to climate-related risks and opportunities will strengthen the stability of the financial system, contribute to greater understanding of climate risks and facilitate financing the transition to a more stable and sustainable economy.

Following the publication of the final recommendations by FSB’s TCFD in June 2017, UNEP FI began a series of ‘TCFD Pilot Projects’ for banks, investors, and insurers. Participants in these pilots explored physical and transition risks (and litigation risks for insurers) and also pioneered practical approaches for evaluating these risks using climate scenario analyses. Almost 100 financial institutions (banks, investors, and insurers) from all around the world have participated in these pilots. These institutions have been supported by nearly a dozen technical partners from climate modelers to climate risk experts.

These experiences have allowed UNEP FI to take a leadership role in developing good practices regarding climate risk in the financial sector. The pilot programmes have created numerous tools, frameworks, and guides to empower both participating institutions and those throughout the financial industry to better manage and disclose their climate risks.

By systematically engaging global stakeholders, UNEP FI’s newest TCFD programmes (starting Q1 2021) will help financial institutions add depth, granularity, and nuance to their climate risk assessments, consolidate best practices in climate risk management, and help standardize climate disclosures across the industry.

Read more about UNEP FI’s work implementing the TCFD Recommendations.

About UNEP FI’s collaborating partners

CICERO is Norway’s foremost institute for interdisciplinary climate research. CICERO delivers new insights that help address the climate challenge and strengthen international climate cooperation by predicting and researching society’s climate challenges. They are a globally recognized leader in assessing climate transition scenarios and exploring the implications of climate on finance and society.

Oliver Wyman is a leading global management consultancy. The firm combines deep industry knowledge with specialized capabilities in strategy, operations, risk management, and organization transformation. Oliver Wyman has been a leader in climate risk assessment, working with UNEP FI on its Phase I TCFD Programme for Banks and helping clients around the world to address physical and transition risks.