Guidance on Resource Efficiency and Circular Economy Target Setting

Published December 2021

New | The Guidance on Resource Efficiency and Circular Economy Target Setting is a comprehensive, step-by-step guide for banks interested in increasing the sustainable use of resources such as energy, waste, water and raw materials and building a circular economy, where waste and pollution are eliminated, products and materials are kept in use at their highest value and natural systems are regenerated. The Guidance takes a practical approach, and includes a unique process for banks to define baseline and set targets in alignment with the Principles for Responsible Banking’s framework. The transition to a resource efficient and circular economy is a journey, hence the Guidance takes a progressive approach, to describe how to get started and in what direction to progress. An illustrative example is provided alongside real-life examples drawn from signatory banks’ experience. 

Banks are also invited to read the accompanying ‘Getting Started Guidance’ – a shorter piece for those just starting their journey.

 

Download the Guidance

Download the Getting Started Guidance

Our current linear economy is based on a take-make-waste model which relies on resource extraction and depletes natural capital. Such practices severely worsen the global challenges of climate change, biodiversity loss and pollution, and resource use is estimated to more than double by 2050. [1] A circular economy would significantly reduce emissions on the path to net zero, however according to a recent report, the global economy is currently only 8.6% circular. [2] Therefore, a transition to a circular economy plays a vital role in achieving the UN Sustainable Development Goals and the Paris Climate Agreement.

Resource efficiency was identified by signatory banks as one of the most significant impact areas in the 2021 Collective Progress Report of the Principles for Responsible Banking. Building on the Financing Circularity: Demystifying Finance for Circular Economies report published in October 2020, this Guidance is specially designed for PRB signatory banks who have identified resource efficiency or any closely related impact area as a significant impact area. In addition, it is also beneficial to any banks who are working on climate and / or biodiversity targets, as building a circular economy can significantly contribute to achieving these targets.

[1] Global Resources Outlook 2019: Natural Resources for the Future We Want, IRP (2019)

[2] The Circularity Gap Report, 2021, Circle Economy (2021)

28 banks collectively accelerate action on universal financial inclusion and health

2 December 2021

  • The Principles for Responsible Banking’s Commitment to Financial Health and Inclusion is a first-of-its-kind accelerator initiative of the banking sector to promote universal financial inclusion and health 
  • 28 signatory banks have joined the leadership group by signing the Commitment 
  • Targets are to be set and published within 18 months from signing, with annual reporting requirement thereafter 

Geneva, 2 December 2021 A group of 28 banks under the Principles for Responsible Banking (PRB) has founded a first-of-its-kind commitment to promote universal financial inclusion and foster a banking sector that supports the financial health of customers. This marks the start of a collective journey to accelerate action on financial health and inclusion, alongside some other critical topics of our times, such as climate change, nature loss and pollution.  

This comes also as a follow-up to the PRB Collective Progress Report released in October, in which financial inclusion was one of the top three sustainability challenges identified by signatory banks as areas in which they can have the most impact – after climate mitigation and adaptation. Through PRB working groups, banks will also define measurements of success, share current best practices and successful approaches to financial inclusion to see how they might be further improved and adopted more widely across the sector 

Accelerating action to ensure universal financial inclusion and financial health of all individuals is of paramount importance in the fight against inequalities exacerbated by the COVID-19 pandemic. Globally, around 1.7 billion adults are without a bank account, which means they are unlikely to be able to save securely or to have access to emergency creditSuch inaccessibility to financial products and services makes it more challenging to be financially resilient in times of difficulty. It excludes people from opportunities to secure and maintain their standard of living and prevents them from taking steps to improve their financial health, such as long-term financial planning, access to credit and insurance.[1]

Signatory banks joining this leadership group will set targets within 18 months of signingThe targets will be supported by measures that seek to drive the necessary changes in one or more of these areas: financial and non-financial products and services, internal processes, data analytics and partnerships. The changes could include affordable bank accounts, accessible ways of making payments, suitable credit offerings, financial education, as well as improved credit and risk policies to mitigate over-indebtedness, among many others. Banks will publish their targets within 18 months and report on them annually thereafter, ensuring a high level of transparency of their progress.  

The Commitment, which focuses on segments such as unbanked, formerly-banked and underbanked individuals, households, micro, small and medium-sized enterprises, will help banks contribute to creating and maintaining inclusive societies. In doing so, it will contribute to several United Nations’ Sustainable Development Goals, including addressing poverty (SDG1)gender equality (SDG5); decent work and economic growth (SDG8) and reduced inequality (SDG10).  One recent study indicated that improving the availability and accessibility of affordable financial products and services could increase GDP in developing economies by up to 14% and in frontier markets by 30% [2].

Eric Usher, Head of UNEP FI said:
“The Principles provide an accountable framework for banks to collectively accelerate action and this is the first time that banks have come together in this way to further drive financial inclusion. By developing an effective and consistent approach, they will be able to establish a pathway of best practice for others to follow worldwide. Amidst rising global inequalities, exacerbated by COVID-19, this commitment recognises the critical role of financial intermediaries in facilitating inclusive societies founded on human dignity, which are necessary for achieving shared prosperity for both current and future generations.” 

[1] Source: Global Fintex Database Report 2017, World Bank.
[2] Source: Innovation in Financial Inclusion: revenue growth through innovation inclusion (2018), EY.


List of committed signatory banks

Akbank, Turkey 

An Post, Ireland 

Banco Hipotecario de El Salvador S.A., El Salvador 

Banco Pichincha, Ecuador 

Bancolombia, Colombia 

Bank of Industry, Nigeria 

Bank of Ireland Group, Ireland 

Banco Bilbao Vizcaya Argentaria (BBVA), Spain 

Banco Compartamos, Mexico 

BNP Paribas, France 

CaixaBank, Spain 

Commercial International Bank (CIB), Egypt 

Coopeservidores, Costa Rica 

Credit Mutuel, France 

Desjardins Group, Canada 

De Volksbank, Netherlands 

Erste Group Bank AG, Austria 

Gatehouse Bank, United Kingdom 

Government Savings Bank, Thailand 

Industrial Bank of Korea, South Korea 

ING, Netherlands 

La Banque Postale, France 

Piraeus Financial Holdings, Greece 

Sovcombank, Russia 

Suncorp Bank, Australia 

UniCredit, Italy 

Vancouver City Savings Credit Union (Vancity), Canada 

Yapı Kredi, Turkey 

About the Principles for Responsible Banking 

The Principles for Responsible Banking are a unique framework for ensuring that signatory banks’ strategy and practice align with the vision society has set out for its future in the Sustainable Development Goals and the Paris Climate Agreement. The Principles were created in 2019 through a partnership between founding banks and the United Nations, and are designed to bring purpose, vision and ambition to sustainable finance. Signatory banks commit to embedding these Principles across all business areas, at the strategic, portfolio and transactional levels. Over 250 banks representing over 40% of banking assets worldwide have now joined this movement for change and embarked on their 4-year journeys of impact analysis, target setting and reporting. 

About the United Nations Environment Programme Initiative
United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between UNEP and the global financial sector to mobilize private sector finance for sustainable development. UNEP FI works with more than 400 members – banks, insurers, and investors – and over 100 supporting institutions – to help create a financial sector that serves people and planet while delivering positive impacts. UNEP FI aims to inspire, inform and enable financial institutions to improve people’s quality of life without compromising that of future generations. By leveraging the UN’s role, UNEP FI accelerates sustainable finance. 

About the United Nations Environment Programme (UNEP) 

UNEP is the leading global voice on the environment. It provides leadership and encourages partnership in caring for the environment by inspiring, informing and enabling nations and peoples to improve their quality of life without compromising that of future generations. 

For more information, please contact: 

Miranda Barham, Media Relations Consultant, +44 (0)7899 030304 

Getting started in nature, biodiversity and finance

Aimed at banks, institutional investors and insurers who are at the beginning of their journey in addressing nature loss, this webinar will introduce how nature is connected to climate change and finance, as well as introducing key concepts and initiatives.

This event is co-hosted by UNEP FI, the PRI, the Finance@Biodiversity Community and the Finance for Biodiversity Pledge.

Register here

Register for other events in the series:
New green shoots – the latest innovations in nature finance
6 January 2022 at 14:00 CET

New green shoots – the latest innovations in nature finance

6 January 2022 | Webinar

Join UNEP FI, PRI, the EU Finance@Biodiversity Community and the Finance for Biodiversity Pledge to hear about positive stories and the latest innovations for financing nature. Bringing together inspiration for the new year, we will be celebrating finance projects and mechanisms which aimed towards the protection, recovery and resilience of nature.

Register here

Register for other events in the series:

Getting started in nature, biodiversity and finance

11 January 2022 at 14:00 CET

Responsible Investor USA 2021

7-9 December 2021 | Virtual Event

ESG regulatory changes are coming from all corners, proxy seasons becoming more bold, and financial institutions are grappling with diversity and inclusion within their own organisations at the same time as responding to fundamental change regarding racial equality and workplace equity in their portfolios.

Will these changes suffice for the US to align its ESG standards with the rest of the world, and protect the competitiveness of US responsible investors? And is the case for fiduciary ESG-related investing now clear?

Join us at the 13th RI USA 2021 conference and learn from the biggest institutional investors in the US on how they are addressing these developments in topical, relevant and output-driven panel discussions, case studies, and debates.

Register now

Strengthening collaboration between private and public banks to scale up finance for sustainable food systems

19 November 2021 | Webinar

This meeting convened by Good Food Finance Network, which will be held on 19 November 2021 between 13:00 and 15:00 CET is designed to kick-start a fruitful dialogue and collaboration between private and public banks to scale up finance for sustainable food systems. Our intention is that this event will mark the beginning of collaborative work to jointly formulate a roadmap and concrete solutions that will significantly contribute to financing a food transition that generates financial returns, is inclusive, environmentally friendly and respects basic human rights of access to nutritious and affordable food.

The development challenges coupled with the climate crisis, call for massive investments in climate-resilient and low-carbon food systems, which can guarantee food security and at the same time do not undermine the natural capital in the long run. Sustainable agricultural practices are more likely to generate long-term, positive financial returns compared to unsustainable practices that, with time, can lead to poor soil quality and lower yields, and increased vulnerability of producers to climatic shocks.

Nevertheless, agriculture is systemically underfunded in developing countries – disproportionately, relative to other sectors– and investments in sustainable, not business as usual agriculture are often perceived as particularly risky. Therefore, private investors are reluctant to increase exposure in this sector, while public development finance is too limited to finance the transition towards more sustainable food systems. In this context, de-risking through smart blended finance provides a pathway for scaling investment for food system transformation.

The UN Food Systems Summit and the COP26 in Glasgow have stressed how the development finance community needs to collaborate more with private financial institutions and investors to leverage limited public funding and increase investment. The PDBs “Platform for Green and Inclusive Food Systems” launched during the Finance in Common Summit in October ‘21 is a step in the right direction to scale up greener and more inclusive investments in agriculture and food systems.

This discussion paper provides the context and proposes an action plan, which will be discussed by the participants. Successful private-public partnerships also require that the finance and development community collaborate through multi-stakeholder working groups to develop a common understanding of sustainable food systems and to align on standardized and simplified environmental and social criteria built on sound scientific evidence. Discussions around this topic will also be encouraged during the event.

First ESRA Hybrid training in Chinese

12 November 2021

(English) Chinese text below

United Nations Environment Programme Finance Initiative (UNEP FI), Ecobanking Project/ INCAE Business School, and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, along with China SIF, SynTao Green Finance and RepRisk delivered the first ESRA hybrid training in Chinese. The course was held online from 15 September to 15 October, and a two-day in-person training took place on 14 and 15 October in Beijing.

The ESRA Chinese course aims to facilitate Chinese banks to establish and implement an effective environmental and social risk management system in China, and further promote sustainable development practices in China’s financial sector.

This year, the ESRA Chinese course format has been upgraded from a three-week online course into an “online + in-person” training, with additional peer sharing sessions. This “training + discussion” model promoted communication, knowledge and experience sharing among participants and built a bridge between participants and mentors. In the meantime, it also deepened participants’ understanding of methodologies related to environmental and social risk analysis and strengthened their practical skills.

——-ESRA Chinese in-person Training workshop introduction——

In the 2 days in-person training session, Dr Guo Peiyuan reviewed the content of the online course, explained the impact of environmental and social risks for financial institutions, and he introduced how to identify and classify environmental and social risks and common environmental and social risks assessment methods and practical tools.

Based on case studies, Ms Guan Rui, guided participants to work on how to use professional tools to identify various types of Environmental and Social risks, trying to establish an effective risk management system or improve the existing risk management system.

Several financial experts were invited to share their practice and experience in establishing environmental and social risk management systems from their organizations.

Mr Philipp Aeby, CEO of RepRisk, spoke with attendees via video call on how information technology can assist in risk diagnosis and assessment. In his video, he also explained how RepRisk combines high-level artificial intelligence with human intelligence to provide environmental and social risk information to over 80 banks and financial institutions, global clients, helping them analyze risks.

The in-person workshop also set up a discussion session, in which participants shared their own knowledge and views under ESRA architecture. Through the online course and two days of on-site learning, discussions and exercises, participants have systematically learned how to identify, assess and manage E & S risks in financial institutions, and mastered the practical tools for risk management.

Participants who complete the course will receive an ESRA training course certificate, which is jointly awarded by UNEP FI, Ecobanking Project/INCAE Business School, GIZ, in collaboration with China SIF. The Chinese ESRA training course will continue next year to give financial institution practitioners extensive practical support in enhancing their environmental and social risk management capabilities.

(中文版)2021 年 ESRA 中文培训线下研修在京举行

2021年10月14 – 15日,由联合国环境规划署金融倡议部 (UNEP FI), 德国国际合作组织(GIZ)INCAE 商学院共同开发的环境与社会风险分析(ESRA)中文培训线下研修部分在京举办。本期培训由UNEP FI、中国责任投资论坛(China SIF)和商道融绿联合举办,RepRisk提供了支持。来自全国多家银行、非银金融机构的学员参加了为期两天的线下研修学习,收获颇丰。

ESRA中文版课程的材料开发工作得到了China SIF的大力支持,并于2019年成功引入中国,旨在促进中国的银行建立和实施有效的环境和社会风险管理系统,并进一步推进中国金融业在可持续发展方面的实践。

2021年的ESRA中文课程由原三周的线上模式升级为“线上+线下”的培训方式,并增加了同业分享环节。学员从2021年9月15日开始线上学习,并参加10月的线下研修。这种“培训+讨论”的课程模式有助于促进学员间以及学员与导师间的交流与经验分享、加深学员对环境和社会风险分析相关方法论的理解、强化相关管理工具的使用技能。

—— ESRA中文课程北京线下研修介绍 ——

在本期线下研修中,UNEP FI中国顾问兼授权培训师、China SIF发起人、商道融绿董事长郭沛源博士首先为学员回顾了线上学习的内容,解释了环境社会因素对金融机构的影响、如何识别和对环境社会风险进行分类。在授课环节里,郭沛源博士结合国内外先进经验做了案例分析,并对常用的环境社会风险评估方法和工具做了生动讲解。

UNEP FI授权培训师、商道融绿副总经理关睿女士以案例分析为依托,引导学员从技术层面学习和演练如何使用专业工具识别各类风险、评估风险的实质性,尝试建立有效的风险管理体系,或评估改进现有的风险管理体系。

本次培训还邀请了多位业内专家分享了行业以及所在机构的环境社会风险管理体系、实践案例和解决方案。

ESG风险信息数据提供商RepRisk 公司的CEO Philipp Aeby先生通过视频连线的方式向学员分享了信息科技如何助力风险识别与评估,介绍了RepRisk如何结合人工智能、高阶机器学习和人工智慧,为全球80多家银行及金融机构客户提供环境社会风险信息,为业务尽调和风险评估提供依据。

UNEP FI 授权培训师和行业专家的引导下,各位学员通过两天的现场学习、讨论和演练,系统学习了金融机构环境和社会风险的识别、评估和管理,掌握了环境与社会风险分析及评估的框架方法以及风险管理的基本工具。完成全部学习的学员将得到由UNEP FIChina SIF联合颁发的ESRA培训课程结业证书。

UNEP FI环境与社会风险分析(ESRA)中文版培训课程将在明年继续举办,广泛切实地帮助金融机构从业人员提升环境社会风险管理能力。

Driving net-zero finance integrity at COP26 – Takeaways from UNEP FI’s blue zone event

11 November 2021

On the 10th of November 2021, UNEP FI co-hosted a discussion focused on the steps that financial institutions need to take to align their net-zero targets with credible 1.5-degree pathways, and on the implementation of those targets into business processes and operations.

Representatives of UNEP FI’s net-zero finance alliances, Guido Fürer – CIO of Swiss Re and member of the Net-Zero Asset Owner Steering Group, Tracey McDermott – Chair of the Net-Zero Banking Alliance and Group Head of Corporate Affairs, Brand & Marketing at Standard Chartered, and Remco Fischer – Climate Change Lead at UNEP FI – were among the speakers at the Driving Net-Zero Finance Integrity COP26 side event hosted with partners from the 2° Investing Initiative (2DII) and the Climate Policy Initiative (CPI).

The new paradigm shift, seen in the exclusive reliance on science-based target setting was emphasized by Remco Fischer, who also underlined the importance of using third-party modeling sources, such as the International Panel on Climate Change (IPCC) and the International Energy Agency (IEA). The choice of the scenario was also highlighted since focusing on no- or low-overshoot scenarios will lead to the most ambitious pathways, which is why this is what GFANZ members are asked to do.

In the context of credible 1.5-degree pathways, Fürer stressed the importance of setting ambitious and quantifiable interim targets. For Fürer and Swiss Re, when it comes to credibility and successful implementation of targets, “the first point is speed”. While the Swiss Re CIO applauded the efforts of 2DII and CPI to provide impact-tracking in the real economy, he reminded listeners that financial institutions cannot wait for perfect methodologies to start their net-zero transformation. One needs to start somewhere and Swiss Re, he said, “is learning by doing”.

The importance of simply getting started was also stressed by McDermott, Standard Chartered published in October 2021 their interim targets and methodology for pathway to net zero by 2050 in a publicly available white paper, precisely because “we know our methodology isn’t perfect”. But Standard Chartered also recognizes that “there is value in transparency, and we can share the learning.” McDermott also pointed out that the ability to exchange knowledge with like-minded institutions is one of the benefits of joining a net-zero alliance. The similar sentiment was expressed by Fürer, who said that “Swiss Re always tries to act as a role model in our industry. But we are also stronger when we are surrounded by similar minded peers.”

Acting as an industry role-model was underscored as crucial by all the speakers, as this position provides an opportunity for financial actors to be enablers of change in the real economy, both by engaging with their clients and meeting their targets, and by acting as an inspiration for other financial institutions, which in turn come to see the net-zero transformation as possible.

A replay of this event is now available online:

 

Semana de Finanzas Sostenibles de Paraguay

22-26 November 2021

UNEP FI, la Comisión Nacional de Valores (CNV) de Paraguay, el PNUD, WWF, la Alianza Público Privada de Finanzas Sostenibles de Paraguay y la Mesa de Finanzas Sostenibles (MFS) de Paraguay, organizan la “Semana de Finanzas Sostenibles”, a llevarse a cabo el 22, 24, y 26 de noviembre de 2021.

El evento contará con 3 webinars:

  • Webinar 1 – Coyuntura Global de las Finanzas Sostenibles
  • Webinar 2 – Tendencias de las Finanzas Sostenibles a nivel Global y Nacional
  • Webinar 3 –  Contribución de los Mercados Financieros al Desarrollo Sostenible

Objetivo

Proponer un debate acerca de las estrategias y acciones que los agentes del sistema financiero pueden tomar para acelerar el proceso de transición hacia una economía más sustentable, gestionando más adecuadamente los actuales riesgos y barreras, e identificando oportunidades.

Público objetivo:

La actividad estará orientada hacia los diversos actores del mercado financiero, incluyendo a ejecutivos de entidades financieras (áreas de riesgos, comerciales, desarrollo de productos, mercado de capitales, etc.), inversores institucionales, compañías de seguros y representantes de organismos gubernamentales, reguladores y supervisores del mercado financiero y empresarios interesados en explorar los distintos mecanismos a través de los cuales el mercado financiero puede contribuir al desarrollo sostenible y a la lucha contra los impactos del cambio climático. Si bien se busca que los temas a tratar en estos webinars interesen al público de América Latina y España, el foco principal estará puesto en el mercado paraguayo.

Los principales temas a tratar serán:

  • Financiamiento para la recuperación post-pandemia
  • Finanzas para la transición a una economía baja en emisiones
  • Innovación de mecanismos e instrumentos financieros sostenibles
  • Programas y proyectos con potencial de financiamiento sostenible

Entregaremos un certificado de asistencia a quienes participen en los 3 webinars. 

Agenda Webinar 1

Horario

Paraguay

Webinar 1: Coyuntura global de las Finanzas Sostenibles:

Lunes 22 de noviembre, 2021

17.30– 17.45 Palabras de apertura

  • Joshua Daniel Abreu Boss, Presidente CNV Paraguay
  • Silvia Morimoto, PNUD Representante Residente en Paraguay
  • Lucy Aquino, Directora y Representante País, WWF, Paraguay
17.45 – 18.00 COP 26: temas centrales de la agenda global y que podemos esperar como resultado de los debates y los planes de acción que se han fijado. ¿Qué impactos tendrán en nuestras economías y cómo aprovechar el momento?

  • Las Alianzas Financieras en la carrera hacia Cero Neto en emisiones
  • Innovaciones y cambios en productos y servicios financieros sostenibles

Expositora:

  • Carolina López, Representante en Chile y Coordinadora a nivel mundial de Capacitaciones de UNEP FI
18.00 – 18.15 TNFD: El alcance de la naturaleza. Marco necesario para que las organizaciones informen y gestionen los riesgos vinculados con el Capital Natural

Expositor:

  • Gustavo Portaluppi, Consultor especializado en Finanzas Sostenibles, UNEP FI
18.15 – 18.30 Agenda 2030: La promoción de un futuro basado en el desarrollo sostenibles post COVID 19. ¿Cómo aprovechar las lecciones aprendidas durante la pandemia? El Plan Estratégico de PNUD 2022 – 2025

  • Direcciones del cambio
  • Soluciones emblemáticas
  • Catalizadores del cambio
  • Financiamiento sostenible: Gestión y certificación de impactos

Expositor:

  • Marcos Mancini, PNUD
18.30 – 18.45 ¿Pueden los mercados de capitales salvar al planeta? ¿Cómo pasar de las buenas intenciones a las acciones de manera efectiva?

  • Cambios necesarios para una verdadera transición hacia Cero Neto en Emisiones
  • ¿Cómo frenar el deterioro del capital natural y la pérdida de biodiversidad?
  • Mensajes de los Índices de Daño Significativo en las Entidades Bancarias

Expositor:

  • Fernando Díaz de Vivar, Director de Finanzas y Mercados Sostenibles, WWF Paraguay
18.45 – 18.55 Preguntas y Respuestas
18.55 – 19.00 Palabras de Cierre

Presentaciones:

Agenda Webinar 2

Horario

Paraguay

Webinar 2: Tendencias de las Finanzas Sostenibles a nivel Global y Nacional

Miércoles 24 de noviembre, 2021

17.30– 17.35 Palabras de apertura
17.35 – 17.55 Las Finanzas Sostenibles y la recuperación post-pandemia. Cambios en los mercados financieros de la región.

  • Cambios en las estrategias de negocios: inclusión social y financiamiento de infraestructura.
  • Innovación de mecanismos e instrumentos financieros sostenibles.
  • Incorporación de los temas ASG y Cambio Climático.

Expositor:

  • Juan Ignacio Roldán, Syndicate, Banca Financiera, Trading & Global Markets, Banco Galicia, Argentina
17.55 – 18.15 NGFS: El sector público y las finanzas sostenibles. Experiencias regionales en materia de cambios regulatorios

  • Integración de los impactos del Cambio Climático en los marcos regulatorios en América Latina
  • Reporte y divulgación de riesgos y oportunidades climáticas: su impacto en el sector financiero y en las empresas
  • Taxonomía de la sostenibilidad: ¿debemos tener una taxonomía global o nacional? ¿Debe ser voluntaria u obligatoria?

Expositora:

  • Patricia Moles Fanjul, Banco de México
18.15 – 18.35 El rol de los bancos multilaterales en la recuperación post-pandemia.

  • Financiamiento de obras de infraestructura
  • Transporte y urbanización sostenible
  • Alimentos y Gestión de Recursos Naturales
  • Financiamiento de la transición energética. Nuevos proyectos de energías renovables.

Expositor:

  • Álvaro Pino, Senior Investment Officer, FMO
18.35 – 18.50 Preguntas y Respuestas
18.50 – 19.00 Palabras de Cierre

Presentaciones:

 

 

Agenda Webinar 3

Horario Paraguay

Webinar 3: ¿Cómo pueden contribuir los mercados financieros para alcanzar el desarrollo sostenible y aumentar la resiliencia frente a los desafíos actuales?

Viernes 26 de noviembre, 2021

17.00– 17.10 Palabras de apertura
17.10 – 17.25 Conversando con la Mesa de Finanzas Sostenibles de Paraguay

  • Alianzas estratégicas – Sector público y privado;
  • Avances y desafíos en el desarrollo de productos financieros sostenibles,
  • Desafíos en materia de inclusión financiera en Paraguay y
  • Perspectivas para el Sector Financiero en 2022? Expositor: Representante de la Mesa de Finanzas Sostenibles

Panelista: Pedro Acosta, Síndico Titular, Mesa de Finanzas Sostenibles, Paraguay

17.30– 17.50 Los Principios de Banca Responsable y aplicabilidad en el mercado financiero local

  • Integración de los impactos del Cambio Climático en la gestión de riesgos y oportunidades en la banca comercial
  • Innovación de mecanismos e instrumentos financieros sostenibles.
  • Los PRB y su impacto en la estrategia de negocios de las entidades financieras. Compromisos y beneficios esperados

Expositor:

  • Darío Colman, Gerente de Calidad y RSE, Visión Banco, Paraguay
17.50 – 18.10 El financiamiento de las medidas de adaptación climática y los modelos de producción sostenible

  • Su impacto en el potencial de crecimiento económico y generación de empleos a nivel local
  • Cómo aprovechar el capital natural de forma sostenible: Programa Green Commodities del PNUD
  • Sectores y áreas de oportunidad de inversión vinculadas a los ODS en Paraguay: SDG Investor Map.
  • Certificados de Servicios Ambientales: situación actual y perspectivas para extender su uso.
  • Estándares y certificación en la gestión de impacto: SDG Impact Tool

Expositor:

  • Andrew Bovarnick, Director Global del Programa Green Commodities
18.10 – 18.25 Proyecto PROEZA: financiamiento para reforestación – FAO – Fondo Verde del Clima

Expositor:

  • Adilio Celle, Vice Ministro de la Secretaría Técnica de Planificación, Paraguay
18.25 – 18.45 El rol del sector público en las Finanzas Sostenibles en Paraguay

  • Financiamiento de la recuperación económica post pandemia
  • La situación del Mercado de Capitales a nivel local: perspectivas para el año 2022
  • Cambios previsibles en la marco regulatorio a partir de las iniciativas globales en materia de reporte y divulgación de los impactos del Cambio Climático
  • Importancia de la participación público privada y la complementación entre el sector financiero y la economía real

Expositores: 

  • Luis Carlos Berino Díaz de Bedoya, Director de Estudios Económicos y Análisis Financiero, Comisión Nacional de Valores (CNV) Paraguay
  • Marcelo Echagüe Pastore, Director de Relaciones Institucionales, Comisión Nacional de Valores (CNV) Paraguay
18.45 – 18.55 Preguntas y Respuestas
18.55 – 19.00 Palabras de Cierre

  • Representante de entidad co-organizadora

Presentaciones:

Para más información, por favor contactar a:

Carolina Yazmín López
carolina.lopez@un.org

II CONGRESO HISPANOAMERICANO DE INVERSIÓN RESPONSABLE

16-19 November 2021

10:00 A. M. A 11:30 A. M. COLOMBIA – 12:00 A. M. A 1:30 P. M. CHILE – 4:00 P. M A 5:30 P. M. ESPAÑA

El 16, 17, 18 y 19 de noviembre, con la colaboración de UNEP FI, tuvo lugar el segundo Congreso Hispanoamericano de Inversión Responsable.

La inversión responsable es la incorporación de los factores ASG en las estrategias de inversión, promoviendo el desarrollo sostenible de todos los actores del mercado.

El II Congreso Hispanoamericano de Inversión Responsable, fue un espacio de diálogo para inversionistas y organizaciones, con el fin de promover el desarrollo sostenible de todos los actores del mercado. Se congregaron líderes empresariales, quienes profundizaron en temáticas claves para la Agenda de Inversión Responsable en Hispanoamérica.

 

Agenda 16 noviembre

 

Agenda 17 noviembre

 

Agenda 18 noviembre

 

Agenda 19 noviembre

Si desea recibir más información visite la página web del evento o póngase en contacto con Caroline Berthod (caroline.berthod@governart.com)

 

Net-Zero Asset Owner Alliance reacts to the draft COP 26 decision text

Upon the release of the draft COP26 decision, Guenther Thallinger, Chair of the UN-convened Net-Zero Asset Owner Alliance, made the following statement:

“COP26 can be the start of a multi-year platform for accelerating policy action. The new Glasgow pledges and initiatives do represent progress, yet these are not sufficient to avoid dangerous climate change.

Asset owners support the COP26 presidency proposal for countries to revisit and strengthen 2030 emission reduction targets by the end of next year. Countries should go further and develop together with the private sector transformation plans with energy provision in 2025 and 2030 at the core.

The private sector must continue to elevate ambitions and should commit to 5-year climate impact reduction targets. 2030 targets are important but 2030 is already the next decade.”

Leading banking institutions launch the Banking for Impact on Climate in Agriculture (B4ICA)

8 November 2021

Leading banking institutions with total assets of USD $10.1 Trillion join forces at COP26 to support the decarbonization of the agriculture and land use sector

Geneva, 8 November 2021 – Today at COP26, the World Business Council for Sustainable Development (WBCSD) announced the Banking for Impact on Climate in Agriculture (B4ICA) initiative in partnership with the United Nations Environment Programme Finance Initiative (UNEP FI), the Partnership for Carbon Accounting Financials (PCAF) and the Environmental Defense Fund (EDF). Including Rabobank and Santander, and with support from the Wells Fargo Foundation, the initiative has already signed on leading banks with a combined total assets of USD $10.1 Trillion to develop best-in-class technical data-solutions to support them and their clients to align their financial portfolios in the food, agriculture and land use space towards Net Zero and Paris Agreement goals.

The agriculture and land-use sector contribute to a quarter of greenhouse gas (GHG) emissions, and COP26 annoucements on combatting agriculture-driven deforestation and reducing global methane demonstrate the increased role of the sector for achieving 1.5 degrees. Banks are in a crucial position to support the decarbonization of the sector while incentivizing practices that strengthen resilient rural livelihoods, protect and regenerate nature, maintain food security and ultimately drive towards sustainable food systems.

As more and more banks recognize the need to decarbonize their portfolios and set commitments such as joining the Net Zero Banking Alliance, banks need to be able to measure and set targets for GHG emissions. However, the agriculture and land use sector is a sector that faces significant challenges when it comes to measuring GHG emissions, especially at the producer level. There are data gaps, accounting complexity, and low digitalization of GHG emissions across different regions and agriculture products and practices. This makes the measurement and target setting of banking portfolios and the offering of farming financial innovations in this sector particularly challenging.

B4ICA will enable banks to more accurately account for agricultural sector GHG emissions, enable methodology and framework consistency, leverage best in class data and transparency tools and ultimately accelerate the drive towards financial farming solutions for net zero, climate-smart agricultural practices in critical commodity supply chains and regions.

The collaboration of agri-banks is needed to develop climate technical solutions.  

With the complexity and data gaps in the agriculture and land use sector and the need to align with industry standards and commitments, B4ICA provides a unique space for pioneering banks to collaborate in the pre-competitve space, together with technical experts and other critical stakeholders. In addition to banks like Rabobank and Santander and support from the Wells Fargo Foundation, it is expected that B4ICA will engage many additional  to join us and tackle this challenge at scale.

“To enable food and agriculture system transformation the finance sector plays a critical role to enable the solutions needed to reduce emissions. This WBCSD initiative alongside our partners meets the banks need for a collaborative approach for efficient and effective development of data-driven tools to support agriculture and food system transformation.” – Diane Holdorf, Executive Vice President, WBCSD

“Agriculture is one of the sectors with the highest GHG emissions, yet also one of the most challenging for banks to decarbonise. Under the UN-convened Net-Zero Banking Alliance, a major portion of the global banking industry by assets is now committed to set robust and science-based targets for agricultural loan and investment portfolios. UNEP FI is pleased to be working with partners on the B4ICA initiative, a unique platform which aims to overcome current data and methodological gaps for measuring GHG emissions in agricultural portfolios and support banks in aligning with ambitious decarbonization pathways” – Eric Usher, Head of UNEP FI

“We can’t manage what we can’t measure. Helping banks understand the greenhouse gas emissions associated with the agriculture and land use sector will accelerate agriculture decarbonization. PCAF is partnering with the B4ICA initiative to help build the tools, methodologies and frameworks so that we can properly account for financed greenhouse gas emissions and support the sector’s decarbonization.” – Giel Linthorst, Executive Director, PCAF

“The finance sector has a critical role to play in supporting farmers’ transition to climate-smart agriculture. This initiative is essential to ensure that financial institutions are aligning their portfolios with the science showing viable pathways to reduce emissions and boost resilience on farms and in rural communities.” – Britt Groosman, Vice President of Climate-Smart Agriculture, EDF

Driving Net-Zero Finance Integrity

10 November 2021 | Hybrid

                   Watch via UNFCCC Webcast                                                      Watch via Youtube

While many financial sector initiatives make commitments to align finance with the Paris Agreement and Sustainable Development Goals, the sum total of commitments almost certainly does not add up to a net zero sustainable trajectory. The pace of change and impact on the real economy is likely too slow, locking-in high carbon assets and serious unmitigated climate risks far before 2050 and paying too little attention to other environmental and social issues such as biodiversity and just transition.

This COP26 side event will bring together leading experts in the net zero and sustainable finance space to discuss what is needed to align all finance flows with Paris Agreement goals and ensure impact in the real economy, including how to: strengthen net zero commitments to avoid “greenwashing”; address methodologies and data/reporting/analytical gaps to guarantee impact beyond commitments; mainstream sustainability in operations, including finance and portfolio transition priorities; and examples of how leading institutions are moving with urgency and integrity.

Joint presentation

  • Thibaut Ghirardi,  Managing Director, 2DII France
  • Raphaël Lebel, Head of the Sustainable Finance Observatory, Finance For Tomorrow (F4T)
  • Bella Tonkonogy, Associate Director, Climate Policy Initiative

Roundtable discussion

  • Moderator: Bella Tonkonogy, Associate Director, Climate Policy Initiative
  • Pierre Ducret, Special Advisor for Climate Change & COP21 at Caisse des Dépôts Group (Net-Zero Asset Owner Alliance member)
  • Guido Fürer, Swiss Re CIO and member of the UN-convened Net-Zero Asset Owner Steering Group
  • Tracey McDermott, Chair, UN-convened Net-Zero Banking Alliance and Group Head, Corporate Affairs, Brand & Marketing at Standard Chartered
  • Eric Usher, UNEP FI Head
  • Christopher Hurst, Director General, Projects Directorate at the European Investment Bank. 

Should you have the Blue Zone accreditation (a blue badge) and you are watching through the COP26 platform, please join the Q&A at the end.

New research identifies remaining global carbon budget for twelve main industries

2 November 2021

For the first-time sector allocations of the global carbon budget have been provided for both hard to abate and all other sectors – 12 main macro industry sectors in total reporting scope 1, 2 and 3 breakdown.

Scientists from the University of Technology Sydney (UTS) have developed energy-related carbon budgets for industries including the aluminum, steel, and chemical industries and the car and aviation industries.The research shows that it is still possible to limit global warming to 1.5˚C and implement the Paris Climate Agreement. This, however, requires timely climate action by the energy-intensive industries supported by the finance sector, backed by reliable and long-term policies from governments.

The global carbon budget to limit global warming to +1.5°C with 67% certainty is 400 GtCO2 until 2050. The steel industry would have a share of 19 Gt CO2 remaining (5.0%), the cement industry 9 Gt CO2 (2.4%), and the aluminum industry 6 Gt CO2 (1.6%). The largest carbon budgets are calculated for buildings (climatization and electricity) with 88 Gt CO2 (22.6%) and road transport with 82 GtCO2(21.1%).

This research has been supported and financed in parts by the UN-convened Net-Zero Asset Owner Alliance, the Rockefeller Foundation, and the European Climate Foundation (ECF).

Associate Professor Sven Teske, who led the research at UTS said: “It is crucial to have a science-based carbon budget for specific industries to implement climate targets for all parts of these industries. We found that power utilities have by far the greatest responsibility: They have to provide enough renewable electricity for the energy-intensive chemical, steel, cement, and aluminum industries and for electric vehicles that no longer need oil.”

Those specific industry emission budgets were further subdivided into so-called Scope 1, 2, and 3 emissions, which define the responsibility for those emissions. So far, this system has only been applied to companies, but not to an entire branch of industry or a region in a very granular way. For investment portfolio steering in line with a net-zero emission pledge, the finance industry needs one holistic model for a 1.5°C low/now overshoot path. The UTS scientists developed a model – the OneEarth Climate Model (OECM) – to fill the gap for industry sector-specific decarbonization pathways.

Emission targets for a specific branch e.g. the steel industry sector and emissions by ‘Scope’ can be used as a benchmark and guidance for investment portfolio decision making.  It is possible now to develop emission paths for industry classifications, which are then captured in one consistent model in line with the net-zero ambition level. Members of the UN-convened Net Zero Asset Owner Alliance (the Alliance) have already started using the model.

The twelve analyzed main industry and service sectors are: Aluminium, chemical, cement, steel and textile & leather industry, power& gas utilities, agriculture, forestry, the aviation and shipping industry, road transport, and the real estate & buildings.

Günther Thallinger, Chair of the UN convened Net-Zero Asset Owner Alliance said: The OneEarth Climate Model’s sector pathway work is important to inform the financial industry for portfolio decision making as the model is based on a holistic integrated approach. It also shows the granularity that is needed to feed into investors’ analysis.  The information details on sector budgets and scope, on interconnections and responsibilities, are exceptional.

As a first major use case sending a strong signal to the UNFCCC COP negotiations, the UN-convened Net-Zero Asset Owner Alliance is supporting the further development of the OECM and applying the latest UTS findings and data for informing the investor group’s net-zero target setting protocol and reporting framework. The Alliance is an international group of 60 institutional investors committed to transitioning their investment portfolios of about USD  10tr Assets under Management (AuM) to net-zero emissions by 2050 on a low/no overshoot path

The following recommendations derive from this new UTS research:

  1. Setting and implementing investment, lending, and underwriting portfolio decarbonizations targets in line with 1.5˚C no/low overshoot
  2. Stop investing in new oil, coal, and gas projects
  3. Ensure coal phase-out by 2030 in OECD countries, between 2030 and 2040 all regions should phase out coal
  4. Manufacturing stop for passenger cars with oil-fuelled internal combustion engines by 2030
  5. Governments to provide detailed transitions plans to net-zero
  6. Companies to disclosure climate mitigation strategy, mid-term target setting, target achievements, and investments in renewable energies and climate solutions

An executive summary is available here.

Research Background

The UTS ‘One Earth Climate Model’ (OECM) is an integrated energy assessment model to develop net-zero targets based on science for all major industries in granularity and with the key performance indicators (KPI) needed to make short-, mid-and long-term investment decisions. The 1.5˚C emission pathways developed by UTS are no/low overshoot scenarios (SSP 1) as defined by the IPCC: this means that a carbon budget overshoot is avoided and that already released CO2 is not assumed to be ‘removed’ by unproven technologies still under development such as carbon capture and storage (CCS). The OECM does take negative emissions into account, but only ‘natural carbon sinks’ such as forest, mangroves, or seaweed to compensate for process emissions that are currently un-avoidable such as from cement production.

The OECM remains within an energy-related carbon budget of 400 Gt CO2 while the recently released Net Zero scenario of the International Energy Agency (IEA NZ) leads to “(…) cumulative energy‐related and industrial process CO2 emissions between 2020 and 2050 of 460 Gt CO2.” In August 2021, the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change, identified the global carbon budget to achieve 1.5˚C with 67% likelihood as 400 GtCO2 and 50% likelihood at 500 GtCO2 between 2020 and 2050.

The One Earth Climate Model (OECM) has been developed under the leadership of the Institute for Sustainable Futures (ISF) at the University of Technology (UTS) in order to develop 1.5˚C compatible climate and energy pathways for countries, regions or globally. The OECM-derived net-zero pathways have been invited to peer-review by a number of climate modeling organizations including the Energy Transition Commission, Potsdam Institute for Climate Impact Research, Science-Based Targets Initiative, Rocky Mountain Institute (RMI), CRREM (Carbon Risk Real Estate Monitor) and WWF. Initial work by the University of Technology Sydney and the University of Melbourne, Australia, as well as the German Aerospace Centre (DLR) has led to published the first joint One Earth Climate Modell (OECM) in February 2019 as an open access book with Springer Nature.

The first phase of the research from 2017 to 2019 has been financed by the Leonardo DiCaprio Foundation. Since 2019, the OECM has been further developed toward no/low overshoot sectorial pathways for 12 industry sectors. This research has been supported and financed in parts by the UN-convened Net-Zero Asset Owner Alliance, the Rockefeller Foundation, and the European Climate Foundation (ECF).

The latest OECM research methodology, assumptions and data are scheduled to be published in the scientific literature in late 2021 / early 2022. The full datasets will be made available as open-source usage to the public, esp. for academics and researchers, civil society organizations, financial industry, companies, and policymakers.

Net-Zero Asset Owner Alliance responds to Reclaim Finance report

In response to the Reclaim Finance report, “It’s Not What You Say, It’s What you Do”, the Chair of the UN-convened Net-Zero Asset Owner Alliance Günther Thallinger says:

“The Alliance is looking for active and constructive dialogue with civil society so that its members can enable the implementation of the crucial transition to a 1.5°C pathway, as required by the 2015 Paris Agreement.”

“Asset owners themselves must raise ambition to achieve robust interim emission targets for which they are accountable. While civil society has a crucial role in helping get more financial service providers to commit to net-zero by pushing those who are already running to go faster and push those who remain standing.”

“Alliance members are already changing their investment decision-making, enabling them to work effectively with others on the transformation at the beginning of this decisive decade. With science-based short-term targets for portfolio emission reductions; sector emission intensity reductions; company engagement; and financing the transition, plus neutral target-monitoring established in the form of an UN-led secretariat, we have made robust first steps.”

“The transformation away from fossil energy is driven by these science-based pathways. Such an approach allows for not only a viable but also a just transition. A simple ‘no investment in fossil energy – especially oil and gas’ would create social and economic inequities, and thus would ultimately slow down the crucial transition into renewable energy.”

The Alliance has produced the following FAQ to guide stakeholders through the complexities of transitioning investment portfolios to net-zero GHG emissions by 2050

Why isn’t the Alliance acting right now to reduce emissions and alleviate the climate emergency?

Alliance members have set strict deadlines on target-setting: 29 of AOA’s 60 members have already set 2025 targets. The net-zero AOA is thus one of the few, if not the only, globally active group of companies (not only financial institutions) who have set 2025 targets. They will begin reporting against these targets next year. Reporting is monitored by the UN.

Members have 12 months from joining the Alliance to set their interim targets, with the cut-off point for inclusion in the Progress Report being 30 June 2021. The Progress Report aggregated the intermediate emissions reductions targets set by members as part of the 2025 Alliance Target Setting Protocol. The Protocol guides how individual members will set science-based emission reduction targets, achievable in the next five years, informed by IPCC 1.5°C no and low overshoot pathways.

Surely any meaningful action on climate change must require immediate coal phase-out

Alliance targets must be set on scientific no and low overshoot pathways, that include several technological phase-outs over time, certainly including coal. In addition, the Alliance has an explicit Position on Coal phase-out, which members are adopting into their own policies, a process that is ongoing and that the Alliance will accelerate.

Why doesn’t the Alliance require members to bring an immediate halt to fossil fuel funding?

Alliance targets must be set on scientific (IPCC) no and low overshoot pathways that are clear on fossil fuel-related pathways. A viable and just transition must be ensured to allow for acceleration of the transition. The Alliance wants to work with governments on long-term plans to guide the transition, and then speedily retire fossil energy assets.

Why doesn’t the Alliance prohibit the use of carbon offsets?

Nearly all low and no overshoot models used by the IPCC require negative emissions technologies (NETs), as does the IEA’s NZE 2050 pathway. The Alliance’s Position on NETs was published in September.

Why doesn’t the Alliance forbid its members from supporting Carbon Dioxide Removal?

The Alliance believes that asset owners’ immediate efforts must foster the rapid and deep cutting of GHG emissions as a priority, so that fewer emissions enter the atmosphere, requiring less Carbon Dioxide Removal (CDR) in the future. The Alliance prioritizes abatement, natural sinks, and then, where necessary, CDR technologies, but also acknowledges that without CDR at all, 1.5 will be near impossible.

The Alliance sees divestment as incompatible with engagement strategies. They are complementary — divestment must be used as a threat to ensure that the demands from the asset owner are taken seriously.

The Alliance agrees the two approaches are complementary. It does see engagement as the clear starting point because only through engagement (and not through divestment), can real-world impacts be achieved, and real-world emissions are reduced swiftly. If engagement over time remains futile, however, then certainly the Alliance sees divestment and other forms of portfolio-level capital reallocation as a valid measure of last resort.

Would the Alliance delist a member if it did not set targets or comply with the Protocol?

To date, all members are fulfilling the commitments they agreed to when joining the Alliance. If this were to change, then the Alliance, guided by its governing and multi-stakeholder Steering Group, would work closely with the member in question to meet the requirements of membership. As a last resort, and after a suitable grace period, the member would be delisted.

Contact

Oliver Wagg, UNEP FI: +44 7885 377264; oliver.wagg@un.org

About the UN-convened Net-Zero Asset Owner Alliance

The 60 members of the UN-convened Net-Zero Asset Owner Alliance have committed to: i) transitioning their investment portfolios to net-zero GHG emissions by 2050 consistent with a maximum temperature rise of 1.5°C above pre-industrial levels; ii) establishing intermediate targets every five years; and iii) regularly reporting on progress. The Alliance is convened by UNEP’s Finance Initiative and the Principles for Responsible Investment (PRI). The Alliance is supported by WWF and Global Optimism, an initiative led by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC).

 

Are you ready for the TNFD framework?

27 October 2021

To read Part I of this article, please click here.

How to get involved with the TNFD development?

There are various ways to get involved in the TNFD development and to engage as banks, insurers and investors.

  1. Join the TNFD Forum

Organisations who share the vision and mission of the TNFD, and are willing to make themselves available to contribute to the work and mission of the Taskforce, should express their interest in joining the TNFD Forum by emailing the team at membership@tnfd.global

  1. Offer your expertise as part of the TNFD knowledge hub

Organisations or individuals interested in providing particular technical expertise can express interest to participate in the TNFD Knowledge Hub— an interdisciplinary group of technical contributors and knowledge partners available to support the Taskforce Members and the technical work of the Secretariat.

  1. Start asking the right questions

The first step in understanding nature-related risks and opportunities is by asking the right questions to the companies you invest in. For example, as an asset manager, the proposed technical scope of TNFD can be used to evaluate the biodiversity impact of your portfolio. Existing tools such as ENCORE can help assess the risks that environmental degradation, such as the pollution of oceans or destruction of forests, cause.

  1. Train your teams

Although there is a growing recognition that nature is a rising concern among financial services providers, there is a limited understanding of the topic and how to translate the impact on nature in the business process. UNEP FI is helping its members understand and develop action. For example, the Nature Positive Insurance series – a leadership series convened by UNEP FI’s Principles for Sustainable Insurance Initiative and the UN Convention on Biological Diversity (CBD) – highlights the key role of the insurance industry in addressing nature-related issues, and supports understanding of the disclosure and emerging regulatory and supervisory thinking.

  1. Join Testing of the TNFD framework

The testing of the draft TNFD framework, which is expected to commence in early 2022, provides the financial service provider with the opportunity to test the framework, whilst at the same time support the framework development, receive technical support in its application and ensure that it is realistic, robust, and practical. Participants will be asked to provide feedback on the key dimensions of scope and the pros and cons of different options, or on principal data, issues found when applying the framework.

  1. Influence global policy

The fifteenth meeting of the Conference of the Parties to the Convention on Biological Diversity (CBD COP15) will take place virtually from 11 to 15 October 2021. As a financial service provider you can join efforts to call on governments to protect and restore biodiversity. For example by joining the Finance for Biodiversity pledge, which to date has already 75 signatories from 17 countries with a total AUM of 12 trillion Euros.[1].

How can UNEP FI help?  

UNEP FI works with members and partners to embed sustainable decision-making into mainstream finance. We provide technical research and guidance, working with the financial community on cutting-edge innovations and frameworks, and developing industry-wide tools linking science, policy, economics and finance, bringing nature to the heart of financial decision-making.

The Nature team supports the development of the TNFD and is available to support you:

[1] https://www.financeforbiodiversity.org/

Are you ready for the TNFD framework?

22 October 2021

On 6 October the Taskforce on Nature-related Financial Disclosures (TNFD) held its first Plenary meeting, bringing together the TNFD Co-Chairs, Elizabeth Maruma Mrema, Executive Secretary of the United Nations Convention on Biological Diversity (CBD), and David Craig, former CEO of Refinitiv and Group Leader of Data & Analytics Division at London Stock Exchange Group (LSEG), and the current 33 Taskforce Members. With the announcement of the composition of the taskforce in late September and the first meeting now completed, the process of developing the TNFD risk management and disclosure framework for the finance and business sector to better report on and manage their nature-related risks has now officially started.

The combined PRB, PSI and PRI membership has taken an active role in the TNFD membership with 13 out of the 14 members of the TNFD from financial services. UNEP FI has been one of the founding partners of the TNFD together with Global Canopy, UNDP, and WWF, and continues to support the development of the TNFD framework through their network and technical expertise with a focus on testing the framework with financial institutions.

TNFD Development Process

The TNFD will go through five phases of work from 2021 to 2023: Build, Test, Consult, Disseminate and Uptake.

During the Build phase, TNFD members will draft a practical Framework, using a data-centric, sectoral and staged approach to ensure it is actionable, accessible and built on cutting edge research and innovation from all regions. This will be based on among others UNEP FI’s and financial services experience in TCFD programs from 2017. In the Test phase, the draft TNFD Framework will be tested with financial institutions and corporates, in close collaboration with relevant financial regulators. Balanced representation across geographies from banks, investors, insurers, public finance institutions and corporates will be sought from high impact and high dependency sectors.

Then, the TNFD will conduct a consultation of the Framework informed by the testing experiences in the Consult phase. The consultation should help facilitate widespread adoption of the Framework in relevant sectors and geographies via strategic external consultations, and will actively build on recommended tools, measurement systems and reporting protocols among FIs, corporates and public authorities. The Disseminate phase will start with the launch of the TNFD Framework (expected during the second half of 2023) and support by strategic advocacy campaigns. In addition to increasing awareness, it will also assist with the application of the Framework and its wider uptake. The development and launch of the TNFD Framework will be the first step in assessing approaches for physical and transition risks and opportunities. It is expected that more detailed guidance will follow after 2023, including practical approaches for evaluating these risks using nature scenario analyses during the Uptake phase.

Readiness of the Financial Sector for TNFD Framework

Nature is moving from niche to norm. The ‘Paris’ moment for nature is underway with the pledge of over 50 countries to protect at least 30% of the world’s land and oceans by 2030 and the postponed 15th meeting of the Conference of the Parties (COP 15) to the Convention on Biological Diversity (CBD) taking place in October 2021 and April 2022. According to early movers from the sector, nature is the next big issue to be addressed after climate change. It is expected that the TNFD will mirror the TCFD development, and will become the de facto standard on nature-related risk disclosure.

However today, the financial sector is still a long way from effectively mainstreaming nature in the business. Despite rising public concern and recognition by businesses of the dramatic implications of biodiversity erosion, nature-related risks and opportunities are not yet systematically considered in the business strategies and asset allocation processes of financial institutions. In the next years, nature is becoming a material issue to financial institutions through:

  • A shifting regulatory framework, from the 2020 report “Indebted to nature” by De Nederlandsche Bank, Central Banks are considering nature-related risk as a material risk, and financial regulators and governments are exploring regulation in the field.
  • Significant portfolio exposure in sectors and/or geographies with high impacts or dependencies on nature (e.g. agribusiness-related value chains), or already suffering from the combined consequences of ecosystems overexploitation and climate change (e.g. scarcity of quality water resources, desertification and loss of vegetation cover, etc);
  • Opportunities to invest in nature-related opportunities. Research by the WEF[1] has shown that transitioning to a nature-positive economy could generate up to $10 trillion in additional annual business revenue and cost savings and create 395 million new jobs by 2030.

[1] https://www3.weforum.org/docs/WEF_The_Future_Of_Nature_And_Business_2020.pdf


The Nature team supports the development of the TNFD and is available to support you:

Towards a TNFD framework: testing nature-related risk reporting in the consumer staples sector

21 October 2021

To support the Taskforce on Nature-related Financial Disclosures (TNFD) with developing a robust framework for nature-related risks, Global Canopy and UNEP FI are testing TNFD core concepts and an exploratory disclosure framework with organisations operating or investing in soy supply chains

Companies and financial institutions are increasingly aware that they may be exposed to nature-related risks, but currently lack a comprehensive framework to assess and manage them. The market-led Taskforce on Nature-related Financial Disclosures (TNFD) aims to solve this challenge by delivering a risk management and disclosure framework for nature-related risks by 2023, ensuring alignment with the most widely-used frameworks and standards currently in the market. 

Delivering on this ambition will require extensive research, market-led testing and wider consultation over the next two years. Much will be done centrally through the TNFD itself, which recently announced its initial 33 Members and kicked off their work. But other market players and stakeholders are encouraged to contribute with aligned research and testing. Crowding in insights from a broad pool of players and sectors will help ensure the final TNFD framework is practical and usable for market participants. With its particularly high nature-related risk exposure, the food system is a good place to start. At the Food System Summit last month, the UN Secretary General highlighted that “food systems [are] responsible for up to 80 percent of biodiversity loss”.

Prioritising sectors with high impact and dependencies on nature

Global Canopy and UNEP FI, two of the founding partners of the TNFD, are currently undertaking the first TNFD-aligned testing project. The project will develop and test an exploratory framework for nature-related risks in the consumer staples sector with a group of select financial institutions and corporates, including McDonalds, Rabobank, Santander, Tesco and Vitasoy. WWF is providing additional technical input.

The project focuses on selected sub-industries within the consumer staples sector: food retail, packaged food and meats, food distribution and agricultural products. Data from ENCORE highlights that these sub-industries can have significant impacts and dependencies on nature, which in turn can lead to financial risks. 

Agricultural production for example can impact both freshwater and terrestrial ecosystems, but is also highly dependent on soil quality. Packaged food and meats companies both heavily impact and depend on water availability.

Within the consumer staples sector, the project focuses on soy supply chains in particular. Soy supply chains are chosen for their particularly high nature-related financial risks, and the relatively good availability of relevant data. Soy is one of the four main commodities linked to deforestation, and the loss of tropical forests is a significant driver of biodiversity loss.

Testing definitions, data and metrics

The project aims to explore the ability of organisations operating in, or financing, soy supply chains to assess, measure, and disclose nature-related risks in line with the proposed technical scope of the TNFD, which was released in June. 

A first step of testing an exploratory framework for nature-related risks involves assessing in a real-world context the concepts, definitions and recommendations set out in the TNFD’s proposed technical scope.

A key concept to test is the TNFD’s initial definition of nature-related risks. In addition to shorter-term financial risks, the TNFD proposes to include longer term risks represented by an organisation’s impact and dependencies on nature. This means organisations should consider not just how nature may positively or negatively impact the organisation’s immediate financial performance, but also how the organisation positively or negatively impacts nature  as a predictor of longer term risks to the business. Global Canopy and UNEP FI will assess how companies and financial institutions currently define nature-related risks, and the extent to which this aligns with the definition laid out in the TNFD’s proposed technical scope.

Another priority recommendation to assess are the four proposed pillars of the TNFD framework – governance, strategy, risk management, metrics and targets. The pillars are intended to structure and guide the disclosure of nature-related risks. They replicate the framework used by the Task Force on Climate-related Disclosures (TCFD). By aligning closely with the TCFD framework, the TNFD intends that over time, the two frameworks will be complementary and provide a comprehensive picture of climate- and nature-related risks.

A second step of developing and testing an exploratory framework involves assessing what data (including third-party data) and commonly used metrics are available, and which of these may be suitable for assessing and reporting on nature-related risks in the context of soy supply chains. This involves systematically reviewing the quantitative and qualitative nature-related metrics set by global standard setting bodies, as well as determining what relevant nature-related metrics financial institutions and corporates are currently using. 

Throughout, the project will explore more broadly the possible challenges and opportunities that participants may face in assessing, measuring, and disclosing nature-related risks.

Towards a global framework

Lessons learned from the development and testing of an exploratory framework in the consumer staples sector will be presented to the TNFD later this year. The findings will provide inputs into the various Working Groups of the Taskforce, in particular the groups focusing on definitions, data, standards and metrics, and the beta version of the TNFD framework. The findings will also help inform future TNFD-aligned testing projects, which will take place across a wide range of sectors and geographies throughout the duration of the TNFD framework development, until the final framework is released in 2023. 


Learn more: Join live streamed workshop 4 November

Join us virtually on 4 November at COP26 for a live-stream of an in-person workshop that will present the project, ‘TNFD Aligned Research and Testing: Nature-related risk reporting in soy supply chains’. The session will highlight the initial lessons learnt during testing and serve as an opportunity for audience members to ask questions and provide feedback on the project.

Register here.

For more information or questions please contact:

Net-Zero Asset Owner Alliance members to cut portfolio emissions 25-30% by 2025

20 October 2021

Less than two weeks away from COP26, the UN-Convened Net Zero Asset Owner Alliance launches its inaugural, biennial Progress Report, highlighting that 29 of its member investors have committed to reducing portfolio emissions by 25-30% by 2025 across three asset classes. This range is higher than the targets set by the inaugural Target Setting Protocol, published in January (-16 to -29% by 2025).

The Alliance also welcomes six new members for a total of 56: Japan’s Nippon Life, Sumitomo Life, and Meiji Yasuda Life Insurance announced membership on 15th October 2021, while the Netherlands’ Pensioenfonds Detailhandel, Germany’s SparkassenVersicherung, and Austria’s UNIQA announced today. The Alliance has grown in just two years from 12 members managing US$2.4 trillion to a membership of 56 investors, collectively managing US$9.3 trillion in assets. With further new members in the pipeline, it is on track to reach US$10 trillion assets under management (AUM) by COP26.

The three new Japanese insurance companies joining the Alliance come after Dai-ichi Life Insurance Company joined in March, marking a significant expansion into Japan. The Alliance welcomed its first Africa-based member last month, when African Risk Capacity Ltd, a specialized agency of the African Union, joined.

Only asset owners that commit to achieving net-zero portfolios by 2050, and that establish intermediate targets every five years in line with the Paris Agreement’s goal of limiting warming to 1.5°C, can participate in the Alliance. This represents a rapid growth in asset owners leading by example, and not asking of real economy companies what they aren’t already asking of themselves.

Members’ first ever short-term decarbonization targets

The Progress Report, to be launched later today at the Net Zero Future: Credible Ambition and Solutions roundtable with Selwin Hart and UN Climate Envoy Michael Bloomberg, outlines the intermediate emissions reductions targets set by investors as part of the 2025 Alliance Target Setting Protocol. The Protocol guides how individual members will set science-based emission reduction targets, achievable in the next five years, informed by IPCC 1.5°C no and low overshoot pathways.

These interim targets have been submitted by 29 Alliance members, as newly joined members in the last 12 months are yet to record their targets. Members have 12 months from joining the Alliance to set their interim targets, with the cut-off point for inclusion in the Progress Report being 30 June 2021.

Günther Thallinger – Allianz SE Board Member & Chair UN-Convened Net-Zero Asset Owner Alliance said:

“The Alliance was formed because we believe asset owners have a unique role in the global economy and financial systems. We want to signal that we are ready to work on the development of assets. We are willing to bring sustainability targets at the level of financial targets and are ready to work on the long-term transformation of the economy. We also want to show that we are prepared to lead the way by first changing ourselves and then reaching out to others to join us. We encourage all asset owners to join us in our commitment to align our portfolios with a 1.5°C no/low overshoot trajectory, to set interim targets, and to work together towards a sustainable future.”

Inger Andersen Executive Director of the United Nations Environment Programme (UNEP) said:

“Today, 61% of the world’s countries and one-fifth of major corporations have some kind of net-zero commitment. This signals a real appetite for change from both private and public sectors. But now, the ask is for us to move to 100% net-zero and translate commitments into immediate actions thereby delivering actual, measurable decarbonization and economy-side transformations. Asset owners are in a strategic position to make that happen by scaling up finance solutions, engaging with corporates and policymakers and shifting capital towards the sustainable solutions of tomorrow. This report provides a clear framework for how asset owners can play their part in the urgent challenges in front of us. I look forward to the actions that arise from it.”

Fiona Reynolds, CEO at the Principles for Responsible Investment, said:

“As COP26 rapidly approaches, increased investor commitment and action in the race to net zero is critical. The release of the Asset Owner Alliances’ progress report highlights the initiative’s continued growth. Members are not just calling on others to act but are starting to pave the way, by aligning their own portfolios and practices with net-zero – including by publishing 2025 interim targets. This focus on near-term goals is vital in driving timely action on net-zero and ensuring targets are hit by 2050. This work can serve as a clear example of emerging good practice and is well placed to provide a blueprint for firms across the investment landscape on how to effectively report their progress. However, we need to go further faster, and hope the momentum of the Asset Owner Alliance will help to inspire greater action from investors as well as businesses and governments at COP26.”

Michael R. Bloomberg, UN Secretary General’s Special Envoy for Climate Ambition and Solutions and Founder of Bloomberg LP and Bloomberg Philanthropies, said:

“Just days away from the G20 Summit and COP26, more major investors are stepping up to set bold short-term targets and accelerate the urgently needed transition to clean energy. The Asset Owner Alliance is growing because firms recognize that building strong economies and fighting climate change really do go hand in hand. And the more that nations collaborate with the private sector in raising their climate ambitions, the faster the world can achieve both the economic and health benefits of net-zero emissions.”

The 29 out of 56 Alliance members have committed to:

• Reducing emissions by 25-30% by 2025 across all listed equities, corporate bonds, and real estate, all three asset classes currently covered in the Alliance’s sub-portfolio target methodologies.
• Reducing emissions by an average of 24% for real estate when set as a stand-alone target on the asset class or in line with what is required by the national grid using CRREM pathways, which is sometimes less than required by global average reductions depending on the efficiency of the grid, etc.

Financing change, engagement, and policy tracks
In addition, as part of the Alliance’s Financing Transition track, the Alliance requires members to report progress in the amount of financing they have provided to climate solutions. The Progress Report reveals asset owners are currently invested in climate solutions an average 4% of AUM.

The report also gauges progress against other tracks covered by the Alliance’s work:

• Within its Engagement track, asset owners plan to support an average of 34 collaborative engagements by 2025. Members also say they expect on average 123 of their investees to have an SBTi-approved target following their engagement or have committed to a 2050 net-zero goal.
• In a progress update on the Alliance’s Policy track, the Alliance has provided recommendations for governmental carbon pricing, suggesting current carbon prices need to almost treble by 2030 to achieve net-zero, while also considering the imperative of a just transition.
• As part of the Monitoring, Reporting, and Verification (MRV) track, the Alliance continues to advance its Target Setting Protocol on an annual basis by adding additional asset classes such as infrastructure and sovereign debt, achieving greater granularity in metrics and specification of approach to the asset classes already in scope. The Alliance is conducting until 29 October a public consultation on the Target Setting Protocol, bringing complete transparency to how the members set interim targets

To download a copy of the full report, please click here.

About the UN-convened Net-Zero Asset Owner Alliance

The 56 members of the UN-convened Net-Zero Asset Owner Alliance have committed i) to transitioning their investment portfolios to net-zero GHG emissions by 2050 consistent with a maximum temperature rise of 1.5°C above pre-industrial levels; ii) to establishing intermediate targets every five years, and iii) to regularly reporting on progress. The Alliance is convened by UNEP’s Finance Initiative and the Principles for Responsible Investment (PRI). The Alliance is supported by WWF and Global Optimism, an initiative led by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC).

About UNEP FI

United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between UNEP and the global financial sector to mobilize private sector finance for sustainable development. UNEP FI works with more than 400 members – banks, insurers, and investors – and over 100 supporting institutions – to help create a financial sector that serves people and the planet while delivering positive impacts. UNEP FI aims to inspire, inform and enable financial institutions to improve people’s quality of life without compromising that of future generations. By leveraging the UN’s role, UNEP FI accelerates sustainable finance.

About the UN Environment Programme (UNEP)

UNEP is the leading global voice on the environment. It provides leadership and encourages partnership in caring for the environment by inspiring, informing, and enabling nations and peoples to improve their quality of life without compromising that of future generations.

Japanese insurers join UN-convened Net-Zero Asset Owner Alliance; adding $1.4 trillion to AUM

15 October 2021

Three Japanese insurance companies joined the UN-convened Net-Zero Asset Owner Alliance, adding a combined US$1.4 trillion to total assets under management (AUM) and total membership of 53.

Japan’s Nippon Life, Sumitomo Life, and Meiji Yasuda Life Insurance announced their membership, committing to net-zero portfolios by 2050 and establishing interim targets every five years in line with the Paris Agreement’s goal of limiting warming to 1.5°C. This represents a rapid growth in asset owners leading by example.

The news comes ahead of the launch of the inaugural Progress Report on Wednesday 20th October and the Net Zero Future: Credible Ambition and Solutions Roundtable with Selwin Hart, Special Adviser and Assistant Secretary-General for Climate Action at UN, and Michael Bloomberg, UN Special Envoy on Climate Ambition and Solutions.

The Progress Report, which includes individual Alliance members’ 2025 targets, will be a stake in the ground ahead of the COP26 Summit in Glasgow next month.

The Alliance has grown in just two years from 12 founding members managing US$2.4 trillion to a membership of 52 asset owners, collectively managing nearly US$9 trillion in assets.

The three new Japanese insurance companies joining the Alliance come after Dai-ichi Life Insurance Company joined in March, marking a significant expansion into Japan. The Alliance welcomed its first Africa-based member last month, when African Risk Capacity Ltd, a specialized agency of the African Union, joined.

Akiko Osawa, Chief Investment Officer, Nippon Life Insurance Company, said:

“Nippon Life has put emphasis on engagement with investee companies over the course of decades and built trust in the relationship. The pathways to carbon neutrality vary depending on each country, region, industry, and company. Through the long-term patient engagement based on trust in the relationship with investees in various situations, we boost their efforts toward decarbonization and aim to meet our net-zero target by 2050.We feel very encouraged to work on these ambitious and tenacious initiatives together with the Alliance members.”

Iwao Matsumoto, CIO at Sumitomo Life Insurance Company said:

“Sumitomo Life is delighted to join the Net-Zero Asset Owner Alliance. As a responsible asset owner, we are committed to net-zero GHG emissions by 2050 and regularly reporting on progress. Our efforts to contribute to the realization of a sustainable society will be intensified by joining the Alliance, and it is a great pleasure to work together with other asset owners.”

Masao Aratani, Director, Deputy President Meiji Yasuda Life Insurance Company said:

We strongly believe that we can enhance to work on ESG issues with a global network and gather information by joining the Net-Zero Asset Owner Alliance. This initiative enables us to contribute to the promotion of information disclosure globally and reduce greenhouse gas. In addition, we also believe that this commitment will contribute to the advancement of our responsible investment framework and correspondence for the achievement of our goal to net-zero CO2 emissions in our investment portfolio by 2050.”