Financing a sustainable blue economy: recommended exclusions list published

17 June 2021

Recognising the importance of a healthy ocean for achieving the UN Sustainable Development Goals, UNEP FI has developed a recommended exclusions list to help financial institutions to lead a sustainable blue recovery.

Based on the market-first practical guidance for financial institutions, Turning the Tide, UNEP FI’s recommended exclusions list for a sustainable blue economy provides financial institutions with an overview of activities to exclude from financing due to their damaging impact on the ocean and high risk. By examining various ocean-related activities, the document identifies unsustainable financial flows in the blue economy and covers five main sectors: seafood, ports, maritime transportation, marine renewable energy, and coastal and marine tourism.

The list has been developed to offer financial institutions an easy to use, at-a-glance overview of the activities to exclude from financing in order to rebuild ocean prosperity, regenerate ocean health and take part in a sustainable blue economy. It can be used as a tool and reference for assessing a company or financing activities, and for managing risks.

Verification is a critical step in assessing any financing activity, and indicators of critical actions or behaviour as well as ways to verify them are suggested in the document. These can be applied by financial institutions aiming to align their business practices and strategy with the Sustainable Development Goals, specifically goal 14: life below water.

Turning the Tide, from which the recommended exclusion list was developed, was written by UNEP FI in partnership with more than 50 leading financial and supporting institutions. Published in March 2021, it provides detailed guidance on sustainability in the blue economy for financial institutions. The full report can be downloaded here.

Download the recommended exclusions list

 

About the Sustainable Blue Economy Finance Initiative:

The UN-convened Sustainable Blue Economy Finance Initiative underpinned by the Sustainable Blue Economy Finance Principles helps financial institutions align their investment, underwriting and lending activities with the UN Sustainable Development Goal 14: life below water. It provides them with guidance and frameworks to ensure that each signatory takes part in rebuilding ocean prosperity and regenerating ocean health. Read more.

Financing a sustainable blue economy: recommended exclusions list

Published

UNEP FI’s recommended exclusions list for a sustainable blue economy presents an overview of activities to exclude from financing due to their damaging impact on the ocean and high risk. It examines multiple ocean-related activities and covers various sectors including seafood, ports, maritime transportation, marine renewable energy, and coastal and marine tourism.

Based on the market-first practical guidance for financial institutions Turning the Tide developed by UNEP FI and more than 50 leading financial and supporting institutions, the recommended exclusions list gives an easy to use, at-a-glance overview of the activities to exclude from financing for a sustainable blue economy. With indicators of critical actions or behavior and ways to verify them, it allows financial institutions to assess their ocean-related financial activities and to manage risks.

Download here

Practical Briefings on the EU Taxonomy

21 June - 19 July 2021 | Webinar Series

The EU Platform on Sustainable Finance presents the Practical Briefings on the EU Taxonomy. UNEP FI is happy to co-host this series of webinars examining the role of the Taxonomy, its implications for financial institutions and the future steps. Find out more about the programme and register below:

21 June | EU Taxonomy Usability: what’s the role of the Taxonomy?
Helena Vines Fiestas of Spain’s National Securities Market Commission and EU Platform co-Rapporteur of Usability & Data Workgroup, speaking with Sean Kidney, Climate Bonds.
 
28 June | EU Taxonomy Usability: what’s it mean for investors?
Case study with Nadia Humphries of Bloomberg and EU Platform co-Rapporteur of Usability & Data Workgroup, speaking with Sean Kidney, Climate Bonds.

5 July | EU Taxonomy Usability: what’s it mean for corporations?
Case study with Helena Vines Fiestas of Spain’s National Securities Market Commission and EU Platform co-Rapporteur of Usability & Data Workgroup, speaking with Sean Kidney, Climate Bonds.

12 July | EU Platform presentation on proposed “Social” Taxonomy
Antje Schneeweiß, EKD’s Church Investors Working Group, Rapporteur for this workgroup, speaking with Nathan Fabian, Principles for Responsible Investment & Chair of the EU Platform.

BONUS:
13 July | EU Platform presentation on proposed “Significantly Harmful” & “No Significant Impact” Taxonomies
Nancy Saich, European Investment Bank, Rapporteur for this workgroup, speaking with Nathan Fabian, Principles for Responsible Investment & Chair of the EU Platform.

19 July | EU Taxonomy Usability: Next
Nadia Humphries of Bloomberg and EU Platform co-Rapporteur of Usability & Data Workgroup, speaking with Sean Kidney, Climate Bonds.

Register here

The UN & TNFD: Stewarding Systems Change

10 June 2021

The market-led and UN-supported Taskforce on Nature-related Financial Disclosures (TNFD) was launched on 4 June 2021. It is designed to support a shift in global financial flows away from nature-negative toward nature-positive outcomes by providing a practical reporting framework for companies. In this blog, UNDP and UNEP FI, as the global Accelerator team bringing together the TNFD – as part of four founding partners including Global Canopy and WWF – reflect on the new initiative’s opportunity for business, why it’s needed and why the United Nations stands behind this key element of the global green transition.

UNEP Executive Director Inger Andersen notes, “Nature is a major global priority on par with climate and needs a similarly consolidated response from the financial and corporate sectors. The launch of the TNFD is a critical step in growing awareness and stimulating action on nature-related risks and opportunities. It will help in the redirection of global financial flows towards more nature-positive sectors and activities. UNEP is proud to see the TNFD come to fruition and stands ready to support the Taskforce in achieving its goals.” See growing TNFD endorsements here.

Why does the TNFD matter?

More than half of the world’s GDP is dependent on nature, which underpin billions of livelihoods. The world’s economy depends on a steady flow of ecosystem services, resources for consumption, pollination of crops[i], water filtration, waste decomposition, carbon sequestration and climate regulation worth around USD $125 trillion annually (WWF 2017). Instead of valuing this natural capital, humanity has wiped out 83% of wild mammals and half of all plants, and the past five years are among the highest in deforestation.

Our economies are impacted by financial institutions and corporations, where investment and supply chain risks are accounted for only when they are deemed ‘material‘ for business. A telling trend for example is that ‘grey’ finance outpaces investments in ‘green’ sustainable forest management by a factor of more than 100:1 – including private sector investments and government subsidies.

The materiality of nature-related risks is often invisible because the realized or potential costs associated with nature degradation, are transferred to consumers, society at large or other third-parties, rather than being built into the balance sheets of companies. Such costs are considered externalities to the economy under the current regulatory and fiscal systems. Underpricing nature-related risks by companies when forecasting returns has been business-as-usual. Most companies are unable to clarify uncertainties associated with nature, and so are unable to reflect this in balance sheets or investment risk assessments.

Existing reporting metrics on nature are either too cumbersome, too expensive or cannot be directly compared. A KPMG survey found that less than 25% of major companies have reported on impacts or dependencies on nature in their sustainability reporting.

Another market opportunity of note is the growing shift to ESG (environment, social, governance screened or themed) investments globally. According to the IMF, over the last decade the volume of ESG-tagged funds has grown $856 billion in assets: a 143% increase from 2010. Regulators too are stepping up: Indian regulator SEBI adopted mandatory sustainability reporting for listed firms in 2021. Yet, tagging investments as ‘green’ remains arbitrary for some asset classes, and nature-related risks are not routinely accounted for by ‘environment’ or ‘sustainability’ tags, which is of concern. As the number of sustainable and ESG-oriented indices rise, corporates are encouraged to adopt more sustainable and ESG strategies to increase their chances of index inclusion (Planet Tracker 2021).

UNDP Administrator Achim Steiner explains, “Aligning global financial flows with nature is an essential path to protect biodiversity, support communities, meet climate targets and achieve the Sustainable Development Goals. Financial institutions and businesses are increasingly realizing that loss of nature has material impacts on a company’s operational costs, reputation, risk and profitability, and potential implications for financial stability at the macro-level. As the Task Force on Climate-related Financial Disclosures (TCFD) did for climate, the launch of the TNFD will aid in better understanding of nature-related risk and provide an opportunity for redirection of global financial flows towards more nature-positive and beneficial outcomes for society.

Why is the UN supporting the TNFD?

Achieving the Sustainable Development Goals is a fundamental driver for economic and business growth (PRI 2017). However, the accelerated loss of nature is putting our collective future at risk. Restoration of natural vegetation and afforestation are essential to meet international targets and crucial for a future that stays within 1.5 degrees of warming. Investing 0.1% of global GDP could avoid breakdown of ecosystems, explains a new UNEP FI report. In fact, action for nature-positive transitions could generate an additional US$10.1 trillion in annual business value by 2030 – a big opportunity for business notes the World Economic Forum.

As stewards of nature and global prosperity anchored by people and planet, the UN welcomes the 7 guiding principles that will serve as a compass for the TNFD and a catalyst to deliver the SDGs.

7 principles proposed as a compass for TNFD:

  1. Market Usability: Develop frameworks directly useful and valuable to market reporters and users, notably corporations and financial institutions, as well as policy and other actors.
  2. Science-based: Follow a scientifically anchored approach, incorporate well established and emerging scientific evidence and aim to incorporate other existing science-based initiatives.
  3. Nature-related Risks: Address nature-related risks that include immediate, material financial risks as well as nature dependencies and impacts and related organisational and societal risks.
  4. Purpose-driven: Be purpose driven and actively target reducing risks and increasing nature-positive action by using the minimum required level of granularity to ensure achievement of the TNFD goal.
  5. Integrated & Adaptive: Build effective measurement and reporting frameworks that can be integrated into and enhance existing disclosures and standards. Account for and be adaptive to changes in national and international policy commitments, standards and market conditions.
  6. Climate-Nature Nexus: Employ an integrated approach to climate- and nature-related risks, scaling up finance for nature-based solutions.
  7. Globally Inclusive: Ensure the framework and approach is relevant, just, valuable, accessible and affordable worldwide, including emerging and developed markets.

The G7-supported TNFD aims to provide a standardized and integrated approach to the disclosures of nature risks and opportunities, based on the financial materiality approach, that can be readily used by companies. Anchored in science-based evidence and committed to being globally inclusive, the TNFD will provide tested recommendations as tools to companies and regulators to embed nature in balance sheets and national accounts to accelerate the transition to a truly sustainable economy, acting as an effective bridge between “knowing and committing” and “doing and reporting”.

Here are proposed recommendations for the technical scope and operating model developed over 9 months by the 74 organizations of the Informal Working Group for the TNFD  and it’s 130+ its Observer Group that span influential financial institutions, corporates, governments, multilaterals, regulators, NGOs and consortia.

UNDP and UNEP FI look to further consolidate development dividends by connecting TNFD to aligned market enablers like the NGFS, FSB, IFRS, G20 and more. From linking to UNEP FI’s lessons learned from supporting TCFD pilots to shaping markets with leaders of the UN-convened Principles for Responsible Investment, Principles for Responsible Banking, Principles for Sustainable Insurance, Sustainable Insurance Forum to the Net Zero Asset Owners Alliance – totaling thousands of the most influential financial players. UNDP welcomes the opportunity to convene visionary governments, regulators, central banks, and multilaterals to expand the value and use of TNFD’s disclosure framework, and incentivize the global shift of financial flows to nature-positive outcomes.

The TNFD is an important element of the green transition that all countries have committed to via the Sustainable Development Goals. Developing countries may be disproportionately affected by this transition, without targeted measures for ensuring just transition for a nature-nurturing economy. Therefore, in parallel to the roll out of the TNFD, we invite governments to consider fiscal instruments, such as nature-positive subsidies, repurposing of nature-negative subsidies, or performance-based payments to assist in alleviating these side-effects and smoothing the transition for those least advantaged.

UNDP and UNEP FI welcome the ambition of the TNFD, the practical vision of the newly announced Co-Chairs and the opportunity to support the TNFD in its next phase.

 

Learn more about the TNFD here: https://tnfd.info

[i] 35% of all food depends on bees and other pollinator species

中国低碳转型与气候信息披露研讨会 Workshop on Decarbonization and Climate Disclosure in China

23 June 2021 | Virtual Event

English description available after the Chinese description

2021年6月23日 | 北京时间16:00-18:00 

UNEP FI、中国金融学会绿色金融专业委员会、PRI和中国责任投资论坛(China SIF)将举办研讨会,探讨中国低碳转型和快速发展的气候相关金融风险披露。对金融行业利益相关方和全球监管方来说,这些披露越来越重要。随着对当前和未来气候风险的关注,气候相关财务信息披露工作组(TCFD)的指导已成为讨论和披露这些风险的重要框架。

本次研讨会将涵盖TCFD披露的良好做法,并探讨国际金融机构如何开展这些披露。此外,参会者还将了解有关低碳转型的净零/碳中和目标设定。利用央行绿色金融网络(NGFS)的参考情景(scenarios),参会者将探讨这些情景对中国的低碳转型之路意味着什么。

欢迎报名并参与我们的讨论。

报名链接

语言:英文/中文(提供同声传译)

议程(北京时间)

16:00  欢迎致辞
             Eric Usher, UNEP FI负责人

16:10  国际银行业气候信息披露实践
            主持人:David Carlin, UNEP FI TCFD项目负责人

16:50  了解净零银行
             Sarah Kemmitt, UNEP FI 净零银行业联盟(NZBA)项目负责人

17:10  探讨中国气候情景
            David Carlin, UNEP FI TCFD项目负责人

17:50  闭幕致辞


Workshop on Decarbonization and Climate Disclosure in China

23 June 2021 | 16:00-18:00 Beijing Time

UNEP FI, the Green Finance Committee, PRI and China SIF invite you to a workshop to explore decarbonization and the rapidly evolving space of climate-related financial risk disclosures. These disclosures have taken on increased importance to financial stakeholders and global regulators alike. With this focus on current and future climate risks, the guidance of the Task force on Climate-Related Financial Disclosures (TCFD) has become a key framework for discussing and disclosing these risks.

This session will cover good practices around TCFD disclosures and explore how international financial institutions are making these disclosures. In addition, participants will also learn about net-zero target setting for decarbonization. Using the Network for Greening the Financial System’s (NGFS) reference scenarios, participants will explore what these scenarios say about low-carbon transition pathways in China.

We are excited to have you join us for this engaging workshop and are eager to answer any questions you may have.

Register here

Language: English/Chinese (Simultaneous translation to be provided)

Agenda

All times Beijing

16:00- Introductory remarks
             Eric Usher, UNEP FI Head

16:10- Global bank panel on climate disclosure practices
             Moderated by David Carlin, UNEP FI TCFD Programme Lead

16:50- Understanding net-zero banking
             Sarah Kemmitt, UNEP FI NZBA Programme Lead

17:10- Exploring climate scenarios in China
            David Carlin, UNEP FI TCFD Programme Lead

17:50- Concluding remarks

Launch: UNEP FI Investment Portfolio Impact Analysis Tool

30 June 2021 | Virtual Event

30 June 2021 | 13:00 – 14:30 CEST | Register for launch now!

The Investment Portfolio Impact Analysis Tool was developed to enable signatories to the Principles for Responsible Banking (PRB) to meet their requirements under Principle 2 on impact analysis, namely as a basis for meeting their subsequent requirements under Principle 3 on target-setting. It complements the Bank Portfolio Impact Analysis Tool which focuses on Consumer, Business, Corporate and Investment Banking.

Features of the Tool include:

  • Enables Fund or Portfolio level analysis
  • Asset classes covered include fixed income, equity and real estate, among others
  • Includes new mappings, including an asset class/impact map and several asset class-specific mappings
  • Uses the Principles for Responsible Investment asset class classification & enriched GICS sector classification
  • Includes an in-built Indicator Library

The methodology was derived from UNEP FI’s unique holistic approach to impact and the Sustainable Development Goalss, 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 Investment Portfolio Impact Analysis Tool is a live resource, designed to evolve over time in order to constantly improve user experience and benefits.

Register for launch now!

UNEP FI and PRI launch joint programme to boost leadership in responsible investing

1 June 2021

Geneva, Tuesday 1 June. The UN Environment Programme Finance Initiative (UNEP FI) and the Principles for Responsible Investment (PRI) are today launching a joint programme that will accelerate leadership in responsible investment.

The Investment Leadership Programme (ILP) will bring together groups of responsible investors to work on initiatives that are considered ambitious, but not yet ready for mainstream investment adoption. They will bring these to a point where they can be taken forward by the wider investment community. PRI and UNEP FI have agreed criteria that initiatives within the programme will have to meet ensuring each one exemplifies responsible investment leadership and best practice.

“This new programme is our response to the urgent need for stronger, collaborative and accelerated action on sustainable development” said Eric Usher, UNEP FI Head. “We are taking our close relationship with PRI a step further and together providing the platform for leading responsible investors to move faster than the mainstream on delivering the UN Sustainable Development Goals (SDGs) and the Paris Climate Agreement.”

 

UNEP FI and PRI have already collaborated on a number of initiatives that are setting the norms for sustainable finance practitioners and driving ambition across the industry. For more than 15 years, they have worked closely together including on the landmark project, Fiduciary Duty in the 21st Century – funded by the Generation Foundation – which clarified the legal responsibility investors have to include ESG matters in their decision-making. This project has contributed to the growing momentum of the sustainable finance movement, prompting a shift from a legal case to a regulatory case, with ESG being clarified in law and regulation in major jurisdictions, such as the UK and EU.

The UN-convened Net-Zero Asset Owner Alliance – a collective of some 40 insurers and pension funds with nearly US$6 trillion in assets which UNEP FI and PRI co-launched in September 2019 – is already demonstrating leadership and spurring action across the finance industry. The Alliance is driving real-world change by using their ownership in companies across the world to advocate and request decarbonisation targets from these companies. The group sparked the development of other net-zero alliances, demonstrating how investor leadership can catalyse action across the financial industry including the Net-Zero Asset Managers Initiative , the UN-convened Net-Zero Banking Alliance and UN-convened Net-Zero Insurance Alliance.

“Leading investors can better effect change if they speak to policymakers and their investee companies with one powerful voice, “said PRI’s CEO, Fiona Reynolds. “The ILP will enable a collaborative, ambitious style of engagement from responsible investors and, by developing guidance and thought leadership on policy and regulatory change, it will inform investor action to help realise a truly sustainable global economy.”

 

Bringing together PRI and UNEP FI investment leadership initiatives consolidates action by the investment industry on sustainability and amplifies the voice of responsible investors. The ILP will also aim to connect investors to policy makers and inform policy change that will enable investors to play a key role in transforming investor behaviour. In the first instance, this will occur in five key jurisdictions of the new Legal Framework for Impact project in partnership with the Generation Foundation. Engagement with policymakers on key ‘reform areas’ will be a main objective of the 3-year project. The ability to readily bring together recognized leaders in the investment space with key policymakers will enable bold action across a range of sustainability issues. The Legal Framework for Impact and the Net-Zero Asset Owner Alliance are the first two initiatives that will be part of the ILP.

Working with UNEP FI’s network of banks and insurers through collaborative working groups or developing joint tools, will enable leading investors to work with others to catalyse change across the entire finance industry.

The ILP will be managed by a dedicated secretariat under the shared oversight of the two parties. It will encourage further knowledge transfer across the banking and insurance sectors with the aim of contributing to building a financial system that is equipped to act on sustainability challenges.

Visit the website.

 

About the Investment Leadership Programme

The Investment Leadership Programme is a joint initiative from UNEP FI and PRI that builds on a 15-year history of collaboration. Initiatives within the Programme will bring together groups of responsible investors to work on projects that are considered ambitious, but not yet ready for mainstream investment adoption. They will bring these to a point where they can be taken forward by the wider investment community. The Programme will play a key role in issuing guidance and policy recommendations to drive leadership and best practice for responsible investors.

For more information and to arrange interviews, please contact:

Duncan Smith, at PRI or Sally Wootton at UNEP FI.

 

Tailored ESRA online course for the Association of Public and Private Banks of Argentina (ABAPPRA) and Savings and Credit Cooperatives of Ecuador

31 May - 16 July 2021 | Online

El Programa de Capacitación de Análisis de Riesgos Ambientales y Sociales (ARAS) ha sido desarrollado a lo largo del tiempo por UNEP FI, INCAE Business School / Proyecto Ecobanking y GIZ para ofrecer a profesionales del sector financiero en todo el mundo un conjunto completo de capacitaciones sobre cómo establecer e implementar efectivos sistemas de gestión de riesgos ambientales y sociales en sus bancos.

Estructura y contenido del curso:

Cada curso está constituido por cinco módulos consecutivos:

  1. Introducción a la Finanzas Sostenibles
  2. Identificación de Riesgos Ambientales y Sociales
  3. Categorización
  4. Evaluación de Riesgos Ambientales y Sociales
  5. Administración de Riegos Ambientales y Sociales

CURSO VIRTUAL DE ARAS ADAPTADO A LAS COOPERATIVAS DE AHORRO Y CRÉDITO DE ECUADOR (31 mayo – 18 junio)

En respuesta a las necesidades de los funcionarios que integran las cooperativas de ahorro y crédito de Ecuador, numerosas instituciones se unen a la propuesta de capacitación de UNEP FI y sus Socios en el Curso Virtual de Análisis de Riesgos Ambientales y Sociales (ARAS), en colaboración con la Red de Integración Ecuatoriana de Cooperativas de Ahorro y Crédito – ICORED, Finanzas Inclusivas y Gobernanza (FIG) y la Confederación Latinoamericana de Cooperativas de Ahorro y Crédito (COLAC).

Asimismo, el número de personas a capacitar será de 23, las cuales provienen de las siguientes Cooperativas de Ahorro y Crédito:

  • Financoop
  • Cooperativa Kullky Wasi
  • Finanzas Inclusivas y Gobernanza (FIG)
  • Cooperativa de Ahorro y Crédito Policía Nacional
  • Cooperativa de Ahorro y Crédito Maquita Cushunchic Ltda
  • Cooperativa Cacpeco
  • Cooperativa 23 de Julio
  • Cooperativa de Ahorro y Crédito Virgen del Cisne
  • Cooperativa de Ahorro y Crédito Previsión, Ahorro y Desarrollo
  • Cooperativa Jardín Azuayo
  • ERCO Cooperative
  • Cooperativa de Ahorro y Crédito Fernando Daquilema
  • Banco VisionFund

CURSO VIRTUAL DE ARAS ADAPTADO A INSITUCIONES DE ABAPPRA (28 junio – 16 julio)

En respuesta a las necesidades de los funcionarios que integran las comisiones de Responsabilidad Social,  Sostenibilidad, Normativa y Riesgo Crediticio de la Asociación de Bancos Públicos y Privados de Argentina (ABAPPRA), UNEP FI junto con sus Socios ofrecen un Curso Virtual de Análisis de Riesgos Ambientales y Sociales (ARAS), el cual tomarán 26 profesionales, los cuales provienen de las siguientes instituciones bancarias:

  • Banco Provincia de Córdoba
  • Banco de Formosa
  • Banco Tierra del Fuego
  • Banco de la Nación Argentina
  • Banco de la Provincia de Buenos Aires
  • Banco de la Ciudad de Buenos Aires
  • Banco de la Provincia de Neuquén

Además, muchas de estas instituciones forman parte del Protocolo Verde de Argentina de Finanzas Sostenibles.

Estas capacitaciones son impartidas por una combinación de expertos independientes altamente calificados de todo el mundo y profesionales experimentados de instituciones miembros de UNEP FI. Además, en todas las capacitaciones se entrega un certificado una vez se ha completado la formación con éxito.

Página web de ARAS: https://www.unepfi.org/training/capacitacion/aras/spanish/

Un producto de:

Desarrollado gracias al apoyo de:

Para más información, por favor contactar a:

Carolina Yazmín López
carolina.lopez@un.org

Insurance supervisors and climate action

14-15 June 2021 | Webinar

Co-hosted by the UN-convened SIF, UN PSI and the IAIS.

Climate change, as well as the global response to the threats of climate change, is having wide-ranging impacts on the structure and functioning of the global economy and financial system. The challenges related to climate change present both risks and opportunities for the insurance sector. To support supervisors in their efforts to integrate climate-related risks into supervisory frameworks, the International Association of Insurance Supervisors (IAIS) and the UN-convened Sustainable Insurance Forum (UN SIF) have jointly developed an Application Paper on the Supervision of Climate-related Risks in the Insurance Sector.

The Application Paper provides background and guidance on how the IAIS supervisory material can be used to manage the challenges and opportunities arising from climate-related risks. Application Papers do not establish standards or expectations, but instead provide additional guidance to assist implementation and provide examples of good practice. This Paper thereby also aims to promote a globally consistent approach to addressing climate-related risks in the supervision of the insurance sector. The following topics and Insurance Core Principles (ICPs) are in scope:

  • Supervisory Review and Reporting (ICP 9)
  • Corporate Governance (ICP 7)
  • Risk Management (ICP 8 and 16)
  • Investments (ICP 15); and
  • Disclosures (ICP 20).

Session 1: 14 June 2021 | 3:30 pm CEST | Register here
Session 2: 15 June 2021 | 10:00 am CEST | Register here

Net-Zero Asset Owner Alliance adds 5 new members managing $900 billion

27 May 2021

The UN-convened Net-Zero Asset Owner Alliance announced the addition of five new members managing nearly one trillion US dollars of assets between them.

UK-based joiners include the country’s largest long-term savings and retirement business, Phoenix Group, the country’s largest life insurer, L&G Group, and Rothesay, the UK’s largest pensions insurance specialist.

Germany’s largest pension group under public law Bayerische Versorgungskammer (BVK) and Asia and Africa-focused insurance group Prudential plc also join today, expanding Alliance membership to 42 asset owners managing a combined US$6.6 trillion of assets.

Alliance members commit to transitioning investment portfolios to net-zero greenhouse gas emissions by 2050, consistent with a maximum temperature rise of 1.5°C above pre-industrial levels, considering the best available scientific knowledge, including the findings of the IPCC. Members will establish and report on intermediate targets every five years.

By joining, the new members support the Alliance’s contributions to the Glasgow Financial Alliance for Net Zero (GFANZ) and the Race to Zero campaigns, convened by UN Special Envoy on Climate Action and Finance Mark Carney.

Alliance Chair and member of the board of Allianz Guenther Thallinger says: “We welcome the significant commitment this cohort of new asset owner members are making and the example they are setting. We hope they will encourage other investors to act urgently to align their investment portfolios with a 1.5°C scenario and to play their role in meeting the Paris Agreement.”

Phoenix Group CEO Andy Briggs says: “We are delighted to have become a signatory to the UN-convened Net-Zero Asset Owner Alliance. In becoming a member, we have joined a global group of asset owners who are committed to setting and reporting regularly on targets to ensure we achieve UN aligned net-zero emissions.

“As the UK’s largest long-term savings and retirement business we understand the role that our business needs to play in creating a sustainable and green future, which is why we were among the first large UK insurers to make a clear commitment to help tackle climate change in line with science-based targets, pledging to be net-zero carbon by 2025 in our operations and by 2050 for our investment portfolio. Whilst Phoenix is the largest UK asset owner making this commitment today, we are pleased to be doing this alongside four other financial organisations today and we stand ready to collaborate across our industry to achieve our net-zero goals.”

Nigel Wilson, CEO at L&G CEO, says: “Joining the Net Zero Asset Owners Alliance is important to Legal & General. We are committed to net zero by 2050 and to key quantifiable reductions to our carbon footprint along the way. The financial sector needs to move from pledges to actions, and NZAOA will play an important role in that process.”

Addy Loudiadis, CEO at Rothesay says: “It is vital that the insurance industry works together to deliver a clear pathway to net zero and that we champion the regular reporting needed to keep our efforts on track. We are pleased to join the Net Zero Alliance and support its work which we see as a fundamental part of our commitment to providing our policyholders with security for the future.”

André Heimrich, CIO at Bayerische Versorgungskammer – the first pension group to join from Germany – says: “Given the urgency with which climate change is to be tackled, asset owners such as ourselves want to use their investment strategies on a worldwide scale to help limit global warming to a maximum of 1.5 °C in accordance with the Paris Climate Agreement. For us, sustainability has long been a key focus, and we will render our contribution to achieving a climate-neutral economy.”

Prudential plc CEO Mike Wells says: “Any future climate crisis will disproportionately affect the communities we serve in Asia and Africa. As a steward of long-term capital and a protector of people’s lives, we need to use our scale and expertise to drive decarbonisation at pace – and to do so in a way which is just and fully inclusive, is engaged with our stakeholders and delivers green growth which benefits everyone. Prudential intends to play the fullest possible role in the transition to the net-zero future which is essential if global temperature rises are to be controlled.”

(Prudential plc is not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America, nor with the Prudential Assurance Company Limited, a subsidiary of M&G plc, a company incorporated in the UK.)

About the Net-Zero Asset Owner Alliance

The 42 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).

Aligning financial portfolios with biodiversity goals: discover the new addition to the ENCORE tool

26 May 2021

In a critical decade for climate and nature, banks and investors can now explore their portfolio’s impact on species extinction risk and ecological integrity, and take immediate action to reverse biodiversity loss.

  • New UN-backed ENCORE biodiversity module has been launched, enabling financial institutions to explore to what extent their financial portfolio indirectly drives species extinction risk and impacts ecological integrity. 
  • Focused on the mining and agriculture sectors which are particularly exposed to biodiversity risks, the tool includes guidance for engagement, enabling financial institutions to take immediate action to transition these sectors towards a nature-positive future.
  • Analysis using the new module suggests that:
    • Over 40% of mining activity globally occurs in ecoregions with strong declining trends in ecological integrity. 
    • 50% of the mining sector’s potential for reducing species extinction risk lies with just over 2% of mines globally. Ambitious biodiversity management within these locations is crucial for avoiding species extinctions.
    • Over 60% of the global potential for reducing species extinction risk across all land area falls within cropland. 
  • The module allows financial institutions to identify pathways to increase positive impacts within agricultural and mining portfolios, as well as transition mining portfolios to a low energy future.
  • Over 30 financial institutions have taken a pioneering role in the development and testing of the module (full list in ‘notes to editor’).

Geneva, 26 May 2021: New ENCORE biodiversity module launched today by the Natural Capital Finance Alliance a collaboration between the UN Environment Programme World Conservation Monitoring Centre, the UN Environment Programme Finance Initiative and Global Canopy, enables banks and investors to analyse the potential impact of their financing and investment activities in agriculture and mining on biodiversity loss, in particular species extinction and the loss of ecological integrity. 

Financial institutions face escalating risks from nature loss. US$44 trillion of economic value generation, over 50% of global GDP, is moderately or highly dependent on nature and its services, but the world’s ecosystems have declined by 47% globally on average compared to their earliest estimated states, with 1 million species at risk of extinction. This creates material risks and opportunities for banks, asset owners and asset managers, as they invest in and lend to companies facing increasing physical, market, regulatory and reputational threats associated with biodiversity loss.

Biodiversity loss is fast rising up the global policy agenda with an ambitious post-2020 global biodiversity framework expected to be agreed by governments in Kunming in October 2021. Momentum is building and leading financial institutions are increasingly taking biodiversity into account, seeking ways to align financial flows to global biodiversity goals. Over 30 financial institutions took a pioneering role participating in the development of the ENCORE biodiversity module.

The new module lies at the cutting-edge of sustainable finance, allowing financial institutions to take immediate action, activate stakeholder engagement, and transition their portfolios towards a nature-positive future. Banks and investors can use the module to map their current exposure, and explore future scenarios, identifying potential pathways to increase positive impacts within agricultural and mining portfolios, as well as transition mining portfolios to a low energy future. The module provides guidance on company engagement, enabling financial institutions to work with stakeholders in high-priority areas to adapt production practices with the aim of making them nature-positive. 

The ENCORE biodiversity module is an extension of the free-to-use, online ENCORE tool (‘Exploring Natural Capital Opportunities, Risks and Exposure’) which assists the finance sector in visualising the links between the economy and nature. ENCORE allows banks, investors and insurers to identify nature-related risks, opportunities and exposure in their activities by setting out how each industry and sub-industry depends and impacts on nature. The ENCORE tool and biodiversity module are available by signing up here.

 

Corli Pretorius, Deputy Director, UN Environment Programme World Conservation Monitoring Centre said:

“Financial institutions are increasingly aware that biodiversity loss is an urgent issue they must tackle. The challenge has been to gain a more granular understanding of how biodiversity risks and opportunities show up in specific portfolios. Now, financial institutions can use the new module to understand the biodiversity risks and opportunities in their portfolios; they can prevent or account for the negative impacts on nature, while directing investments to better outcomes for people and planet.” 

Eric Usher, Head of the United Nations Environment Programme Finance Initiative said:

“The ENCORE biodiversity module lies at the cutting edge of sustainable finance, allowing financial institutions to take material action to pivot the real economy towards a nature-positive future. Replenishing and rebuilding biodiversity is an urgent global priority and those financial institutions which show market leadership by being early movers may have a considerable competitive advantage.”

Niki Mardas, Executive Director of Global Canopy, said:

“Data is key to unlocking finance sector action on biodiversity loss, and the missing link that financial institutions tell us they urgently need to shift their financing and investment away from nature-negative activities and towards nature-positive ones. The ENCORE tool has already been used by key finance sector players, like the Dutch Central Bank, to explore nature-related risks across entire markets. Now the new ENCORE biodiversity module enables individual financial institutions to take further targeted action in sectors like agriculture and mining which have high impacts and dependencies on nature.”

Karine Siegwart, Vice-Director of the Swiss Federal Office for the Environment, said: 

“Switzerland is committed to becoming a leading sustainable financial market place. With the ENCORE tool the financial sector globally is provided a unique tool with a powerful lever for halting biodiversity loss. We are proud to be supporting such critical efforts towards aligning financial flows with biodiversity targets“.

 

NOTES TO EDITOR

 

Media Contact: Miranda Barham |  miranda@mirandabarham.com |  +44 (0)7899 030304

 

Financial Institutions which participated in the development of the ENCORE biodiversity module:

 

Access Bank, AMERRA Capital Management LLC, APG AM, Bank of Montreal (BMO), Banque Socredo, Barclays, BNDES, BNP Paribas Asset Management, BT Financial Group, Citi, Credit Suisse, Development and Investment Bank of Turkey (Türkiye Kalkınma ve Yatırım Bankası A.Ş.), Development Bank of Southern Africa (DBSA), First Rand, Fondaction, GLS Bank, Hermes, ING, Jyske Bank, Kasikornbank, Land and Agricultural Development Bank of South Africa (Land Bank), NAB, National Bank of Canada, Natixis, NatWest Group, Nedbank, Piraeus Financial Holdings, Scotiabank, Sudameris Bank S.A.E.C.A., Swiss Re, UBS

 

This module uses goal-relevant metrics, but does not currently provide an explicit link to the potential post-2020 global biodiversity framework, as this is currently being deliberated and will be formally agreed at the 15th Conference of the Parties to the Convention on Biological Diversity (CBD COP-15). This module will be updated in accordance with the final negotiated text of the post-2020 global biodiversity framework once available.

 

About the ENCORE tool

The ENCORE tool (‘Exploring Natural Capital Opportunities, Risks and Exposure’) is a free, online resource which helps global banks, investors and insurance firms assess the risks that environmental degradation, such as pollution or destruction of forests, causes for financial institutions. The tool was developed by the Natural Capital Finance Alliance, and has been made possible with funding initially from the Swiss State Secretariat for Economic Affairs (SECO) and the MAVA foundation, and subsequently from the Swiss Federal Office for the Environment (FOEN), which has funded the development of the ENCORE biodiversity module. Work to support the development of ENCORE has also been undertaken by PricewaterhouseCoopers LLC and the Norwegian University of Science and Technology (NTNU).

 

About the Natural Capital Finance Alliance

The Natural Capital Finance Alliance (NCFA) is a finance sector led initiative, providing expertise, information and tools on material aspects of natural capital for financial institutions, including ENCORE. The NCFA secretariat is run jointly by the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC), the UN Environment Programme Finance Initiative (UNEP FI) and Global Canopy.

https://naturalcapital.finance

Twitter: @NatCapFinance | Linkedin: Natural Capital Finance Alliance

 

About UNEP-WCMC:

The UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) is a global Centre of excellence on biodiversity. The Centre operates as a collaboration between the UN Environment Programme and the UK-registered charity WCMC. Together we are confronting the global crisis facing nature.

https://www.unep-wcmc.org

Twitter: @unepwcmc | Linkedin: UNEP-WCMC

 

About UNEP FI:

The UN 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 350 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.

https://www.unepfi.org

Twitter: @UNEP_FI | Linkedin: UN Environment Programme Finance Initiative

 

About Global Canopy:

Global Canopy is a data-driven think tank that targets the market forces destroying nature by providing innovative open-access data, clear metrics, and actionable insights to companies, financial institutions, governments and campaigning organisations worldwide. 

www.globalcanopy.org

Twitter: @GlobalCanopy | LinkedIn: Global Canopy 

Webinars on Principles for Responsible Banking (PRB), Principles for Sustainable Insurance (PSI) & Principles for Responsible Investment (PRI)

24 June - 2 August 2021 | Webinar

Frente a la actual crisis sanitaria, el rol de las entidades financieras es aún más relevante pues no solo deben facilitar el proceso de recuperación económica, sino que además deberían asegurar el adecuado alineamiento con los Objetivos de Desarrollo Sostenible (ODS) a mediano y largo plazo y los compromisos del Acuerdo de París. Esa tarea debe materializarse en estrategias de negocios responsables y que impulsen el desarrollo y la implementación de productos y servicios financieros que colaboren en la búsqueda de los ODS y en la lucha contra el cambio climático.

UNEP FI junto con la Red de Instituciones de Apoyo de Chile, que incluye a la Universidad Finis Terrae (UFT), GOVERNART, la Asociación Chilena de Administradoras de Fondos de Inversión (ACAFI), la Cámara de Comercio de Santiago, FinteChile, ACCIÓN CLIMÁTICA, la Federación Interamericana de Empresas de Seguros (FIDES), y la Federación Internacional de Administradoras de Fondos de Pensiones (FIAP), y también junto con los Principios de Inversión Responsable (PRI), organizan una Serie de Webinars los cuales tendrán un enfoque fundamentalmente práctico donde se compartirán las recientes experiencias en la implementación de los Principios de sostenibilidad y su aplicabilidad en el sector bancario, de seguros e inversión. 

Se contará con la participación de invitados provenientes de entidades financieras que han participado activamente en las diversas iniciativas promovidas por UNEP FI en materia de sostenibilidad, quienes compartirán sus experiencias y recomendaciones para la facilitar la implementación de los Principios en las instituciones financieras.

Además, se otorgará un certificado a todas las personas que participen en los 3 webinars.

 

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 saber más sobre los Principios de Banca Responsable (PRB), los Principios de Seguros Sostenibles (PSI) y los Principios de Inversión Responsable (PRI).


WEBINAR 1: Los Principios de Banca Responsable (PRB) (24/06/2021; 9:30 Chile / 15:30h Madrid).

 

 
Los temas a abordarse en el evento serán:
  • Los 6 principios de Banca Responsables: Objetivos, impactos y su aplicación en la práctica.
  • Compromisos que asumen los Signatarios, definición de metas e involucramiento con los clientes.
  • Análisis de impactos generados por los productos y servicios financieros y cómo se pueden medir.
  • El Compromiso Colectivo de Acción por el Clima: bancos signatarios, objetivos, áreas claves y cronograma de implementación.
 

WEBINAR 2: El Sector Asegurador, Los Principios de Seguros Sostenibles (PSI) y los Impactos del Cambio Climático (02/08/2021; 9:30 Chile / 15:30h Madrid).

Los temas a abordarse en el evento serán:

  • Cómo evaluar desde el punto de vista de seguros los riesgos físicos: alcance, análisis de escenarios, modelos de análisis y bases de datos disponibles. Tipos de eventos  
  • Los riesgos de transición y el sector de seguros: análisis de escenarios de transición, modelos de evaluación y la importancia del horizonte de tiempo, pruebas de estrés. 
  • Los riesgos de litigación: alcances, perspectivas, cómo gestionar adecuadamente este riesgo y las pruebas de estrés. El riesgo de reclamos legales, responsabilidad legal potencial y costos de remediación. 
  • Lecciones aprendidas  en el manejo de los riesgos climáticos. Riesgos y oportunidades en un entorno de cambio climático 

Agenda (hora Chile) 

 

WEBINAR 3: El sector de inversiones, los Principios de Inversión Responsable (PRI) y los avances en la integración de factores ASG en Latam (08/09/2021; 9:30 Chile / 15:30h Madrid).

Los temas a abordarse en el evento serán:

  • Avances de la inversión responsable en Latam 2018 al 2021: Se acelera el interés en la región
  • Estrategia de PRI 2021 al 2024: De la integración ASG al logro de resultados de sostenibilidad en el mundo real
  • Experiencias signatarios: definición de políticas y experiencias de integración ASG en activos de renta variable y fija

 

Agenda (hora Chile) 

 


Organizadores:

Para más información, por favor contactar a: 

Carolina Yazmín López
carolina.lopez@un.org

Banks are finally out of the blocks in the race to net-zero – Eric Usher on Financial News

21 May 2021

The following op-ed was published in Financial News on 17 May 2021.
You can view the original article here.

BANKS ARE FINALLY OUT OF THE BLOCKS IN THE RACE TO NET ZERO

New net-zero commitments by leading banks can help carve the way to a green global economy

The financial sector is finally picking up the pace in its response to the climate emergency. Central banks are taking steps to better assess climate-related risks, and asset managers responsible for over a third of the world’s assets, including giants like Vanguard and BlackRock, committed to set a net zero path. Similarly, through the UN-convened Net-Zero Asset Owner Alliance, Wespath (US) and the Church Commissioners for England laid out plans to reduce the carbon intensity of their investment funds by 35% and 25% respectively by 2025, adding to the likes of insurance heavyweights Allianz and AXA and bringing to  a total  20 of the 37 member asset owners that have set targets.

However, the banking sector has risked falling behind in the race to net zero by 2050. One report in March showed that less than half (45%) of banks took action to align lending portfolios last year.

Now, the global banking community has taken a significant step in catching up. Convened by the UN, the industry-led Net-Zero Banking Alliance (NZBA) was founded in late April by 43 banks from 23 countries across 5 continents, with assets of US$28.5 trillion – and the membership ranks continue to swell. This is an unprecedented commitment by banks to play their important role and do their part in decarbonising the real economy in line with the scientific call for action to limit global average temperature increase to maximum 1.5°C over pre-industrial levels by the end of the century. The NZBA is joining the UN Race to Zero campaign, and forms an integral part of the new Glasgow Financial Alliance for Net Zero, chaired by UN Special Envoy on Climate Action and Finance, Mark Carney. 40 of the NZBA founding members are also signatories to the UN Principles for Responsible Banking – the leading framework establishing the norms for sustainable finance.

Tougher standards

From lending to investment portfolios, this new commitment will see rapid decarbonisation, based on robust, science-based methodologies, across banking assets. Given the urgency required for climate action it also, importantly, binds signatories to set and report against interim targets in line with the science for 2030 or sooner and so make a significant contribution to this critical decade of action.

The commitment is designed to ensure that banks engage with their clients’ decarbonisation reforms, promoting real economy transition across multiple high-emissions sectors. To this end, signatory banks will set transparent goals which account for their areas of most significant climate impact – the most GHG-intensive and GHG-emitting areas in their portfolios – within 18 months of joining the coalition. Within 36 months, they will set targets for all, or a substantial majority of nine carbon-intensive sectors: agriculture; aluminium; cement; coal; commercial and residential real estate; iron and steel; oil and gas; power generation; and transport.

Careful consideration has been given to establishing realistic and constructive timeframes with the founding members. The model is designed to avoid disincentivising banks which are at an early stage of their decarbonisation journey, while respecting the scientific decarbonisation scenarios to limit global temperature increase to 1.5°C by the end of the century. Inevitably, some banks have already set comprehensive targets, while others have made little progress as yet towards decarbonisation. A bank just now embarking on this journey needs time to undertake their portfolio assessment, build an emissions profile of their lending portfolios and investment activities, establish a baseline and develop realistic targets, while aligning with all other UN Sustainable Development Goals to the extent possible. Allowing a period of up to 18 months from signing to set targets makes the commitment accessible to banks that are just out of the starting blocks on their journey to reduce operational and attributable emissions across their balance sheet.

Tackling fossil fuels

The Alliance does not go as far as some campaigners might like and demand an immediate divestment from the fossil fuel sector, however it does compel members to prioritise high-emitting sectors, and immediately begin aligning their lending and investment portfolios with science-based pathways to net-zero by 2050 or sooner. They will do so according to the Guidelines for Climate Target Setting for Banks, which has been developed by banks who signed the Collective Commitment to Climate Action and underpins the Alliance. Based on the science, these guidelines require all NZBA members to set scenario-based intermediate targets for 2030 at the latest, across multiple carbon-intensive sectors of the economy. This is expected to lead to significantly reduced lending to those GHG-intensive and high emissions industries which do not have an accelerated decarbonisation transition plan in place.

Decade of action

We are at the start of the decade of action where setting and achieving demanding climate targets will accelerate the transition to a net-zero economy and lead to transformational real world impact. A study of 300 large corporates that committed to science-based targets in the last five years found they were reducing emissions at an even faster rate than that demanded by a 1.5°C pathway.

The global pandemic has shown how quickly industries can adapt when faced with disruption. It’s time for the banks and the wider finance sector to play their critical role in mobilising the trillions of dollars needed to transition to a global zero emissions economy and deliver the Paris climate goals.

Eric Usher is Head of the UN Environment Programme Finance Initiative, which convenes the Net-Zero Banking Alliance, the UN-convened Net-Zero Asset Owner Alliance and has announced its intention to convene the Net-Zero Insurance Alliance.

New ICAP framework drives investor action on climate crisis, accelerating transition to net-zero

20 May 2021

The founding partners of The Investor Agenda released today a new tool to enable institutional investors to step up action to tackle the climate crisis and accelerate the transition to a net-zero economy.

The Investor Climate Action Plans (ICAPs) Expectations Ladder and Guidance provides investors with clear expectations for issuing and implementing comprehensive climate action plans, including steps investors can take to support the goal of a net-zero emissions economy by 2050 or sooner. The framework aims to help investors navigate existing expectations and initiatives on climate change. It is inclusive and unique in that it sets out expectations for investors wherever they may be on their climate journey.

The release of the ICAPs Expectations Ladder and Guidance comes amid increasing global momentum of investors committing to work with their portfolio companies and policymakers to reach net zero emissions by 2050 or sooner, and to set interim reduction targets for 2025 and 2030.

The founding partners of the Investor Agenda, which are AIGCC, CDP, Ceres, IIGCC, IGCC, PRI, and UNEP FI, have been mobilizing investors to make net-zero commitments through a number of Investor Agenda-endorsed initiatives including the Net Zero Asset Managers initiative, Paris Aligned Investment Initiative, Science Based Targets initiative and United Nations-convened Net Zero Asset Owner Alliance. A net-zero emissions economy by 2050 or sooner is necessary to deliver on the goals of the Paris Agreement and limit average global temperature rise to no more than 1.5-degrees Celsius.

Eric Usher, Head of the UNEP Finance Initiative, said:

“We have seen tremendous growth in net-zero commitments from investors, however we need to move past commitments to concrete action and targets. UNEP FI is working with leading investors through the United Nations-Convened Net-Zero Asset Owner Alliance to cascade net-zero progress throughout the financial system and real economy, as well as with large investors who are just starting their climate action journey. The ICAPs Expectations Ladder and Guidance will help all investors take meaningful action, whether it is their first step or an additional enhancement, across sustainability, engagement and asset allocation.”

The ICAPs Expectations Ladder

The ICAPs Expectations Ladder summarises the key climate actions investors can take right now in the four interlocking areas of the Investor Agenda: investment, corporate engagement, policy advocacy, and investor disclosure. Governance is a cross-cutting theme across all four areas. The areas include: 

  • Investment: Manage climate risks in investor portfolios and shift capital to value-creating businesses set to succeed in a net-zero future.
  • Corporate Engagement: Engage companies to drive climate action and demonstrate real progress in line with a 1.5-degree Celsius future. 
  • Policy Advocacy: Advocate for policies aligned with delivering a just transition to a net-zero economy by 2050 or sooner. 
  • Investor Disclosure: Enhance investor disclosure to help stakeholders track investor climate action in line with a 1.5-degree Celsius pathway. 

Investors can use the ICAPs Expectations Ladder in several ways including: 

  • Assessing their current approach to managing climate change risk and opportunity
  • Publishing a standalone ICAP
  • Embedding elements of the ICAPs into their climate change strategies and disclosures.
  • Communicating their current activities and future plans to stakeholders

The accompanying ICAPs Guidance enables investors to interpret the ICAPs Expectations Ladder. It can be used by  investors to self-assess where they are on the ladder to understand the specific climate actions they can take to strengthen their approach and make further progress.

The Investor Agenda will measure progress on how many investors are developing and implementing climate action plans aligned with the Expectations Ladder, with the hope that at least 50% of all major investors will issue an ICAP or incorporate elements of the Expectations Ladder into their plans, reports and strategies in the next year and that all major investors have an ICAP with net-zero targets in the next five years. 

Partner CEO quotes

Rebecca Mikula-Wright, Executive Director of the Asia Investor Group on Climate Change and member of the global Steering Committee of the Investor Agenda, said: “The ICAPs Expectations Ladder and Guidance sets out a clear pathway for investor integration that leads to an ultimate goal of net zero that must be reached, wherever an investor may be on that journey. It will assist Asian investors on how they can take meaningful action to reduce their climate risk exposure and increase their allocations to the transitional investment solutions that are needed to address the climate crisis. By publishing a clear and robust climate action plan using the ICAPs framework, and acting on it, Asian investors can be better positioned to seize the enormous investment opportunities that are being created by the transition to net zero.”

Paul Simpson, CEO of CDP and member of the global Steering Committee of the Investor Agenda, said: “It is crucial for the business world to demonstrate leadership on climate action and readiness for bolder policy in the run up to COP26 and beyond. This means setting ambitious and credible science-based targets and seizing the power of transparency and disclosure. The ICAPs Expectations Ladder and Guidance is forward-looking. It provides clear information to the capital markets for aligning their investment portfolios with the goal of net zero emissions by 2050 or sooner. We are thrilled that this new tool is now available to investors around the world.”

Mindy Lubber, CEO and President of Ceres and member of the global Steering Committee of the Investor Agenda, said: “We call on all investors to publish climate action plans and join investors around the world in building a more just and inclusive net-zero economy.  The ICAPs Expectations Ladder and Guidance will drive a positive climate ambition loop by sending a clear signal to investors, companies, governments and regulators that investors support ambitious climate action plans and policies, which can in turn unlock further climate action.”

Stephanie Pfeifer, CEO, Institutional Investors Group on Climate Change and member of the global Steering Committee of the Investor Agenda, adds: “Climate change poses a serious financial risk for investors. Moreover, they have a key role to play in driving the transition to a net zero economy and helping avoid the otherwise devastating impacts the climate crisis entails. All investors need to take action. The ICAP Expectations define the practical steps required to set and deliver on clear plans to achieve their goals, whether they are just getting started or well on the way to being aligned with the goals of the Paris Agreement.”

Emma Herd, Chief Executive Officer of the Investor Group on Climate Change and member of the global Steering Committee of the Investor Agenda, said: “Investors across Australia and New Zealand are currently grappling with how to best move from the ambition to the implementation required to reach net zero emissions across their portfolios in a way that ensures ongoing sustainable returns to their beneficiaries and clients. The ICAPs Expectations Ladder and Guidance is a critical guide for that journey that will help accelerate meaningful action to reduce climate risks, while also providing clarity and transparency.”

Fiona Reynolds, CEO of the Principles of Responsible Investment, said: “Just as it is not enough for governments and business to sign net-zero commitments without also setting out the details of how they plan to get there, investors must also step up and demonstrate the actions they are taking to address climate risk both in the near term and longer term to 2050. The Investor Agenda’s ICAPs Expectations provides a framework for investors to develop robust plans for how they will transition their portfolios to net-zero and in doing so, investors can demonstrate real leadership. Ambition across the board is critical – but without commitment and action it won’t be enough to move the needle on net-zero.” 

The ICAPs Expectation Ladder and the Guidance publications are made possible by a grant from the ClimateWorks Foundation, a funding partner of The Investor Agenda.

About The Investor Agenda
The Investor Agenda is a common leadership agenda on the climate crisis that is unifying, comprehensive, and focused on accelerating investor action for a net-zero emissions economy. The founding partners of The Investor Agenda are seven major groups working with investors: Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative. For more information, visit theinvestoragenda.org and follow @InvestorAgenda

The ASCOR Project: Assessing Sovereign Climate-related Opportunities and Risks

14 May 2021

Asset owners, BT Pension Scheme and the Church of England Pensions Board, alongside the UN-convened Net-Zero Asset Owner Alliance (AOA), the Coalition for Environmentally Responsible Economies (Ceres), the Institutional Investors Group on Climate Change (IIGCC), the Principles for Responsible Investment (PRI), the Transition Pathway Initiative (TPI) are, supported by Chronos Sustainability, joining forces to create a practical tool to support investors in their assessment of sovereign climate-related risks and opportunities.

Target setting frameworks have been evolving, including IIGCC’s Net Zero Investment Framework and the AOA’s Target Setting Protocol. In addition, the PRI has recently published guides specifically focussing on ESG incorporation and engagement for sovereign bondholders.

These frameworks all need a robust approach to assessing sovereign carbon performance. The project partners agree that there is a critical need for an investor-led tool that can provide a common lens to understand sovereign exposure to climate risk and to understand how governments plan to transition to a low-carbon economy.

The project goal is to develop an assessment framework that enables the current and future climate change governance and performance of sovereigns to be fairly and appropriately measured, monitored and compared. This assessment framework will then be used to produce an annual public assessment of the climate change governance and climate change performance of sovereigns.

These annual assessments will provide insights that investors can use in their investment research and decision-making, and provide a sound and cohesive starting point for investors to engage with sovereign officials and policymakers on this topic.

Get involved

The project is currently at the scoping stage. We intend to commence the work in June 2021, and to complete and pilot the assessment framework by the end of 2021.

We are inviting expressions of interest from investors who would like to be involved in this project, e.g. being part of the project advisory committee, contributing financially to the project’s funding. If you are interested in being involved, please write to Joanne Lewis at joanne.lewis@unpri.org

AOA, Ceres, IIGCC, PRI and TPI will be consulting their members at key points during the project to ensure the framework aligns with respective initiatives and to maximise the opportunity for a consolidated unified approach amongst investors.

A New Investor Consensus: The Rising Demand for Healthy Buildings

Published May 2021

UNEP FI’s Property Working Group has partnered with the Center for Active Design and BentallGreenOak (BGO) to conduct the largest health and wellness study of global real estate investment managers. Building on literature showing financial benefits to owners and occupiers of healthy buildings and a global survey of owners and asset managers, the study highlights the momentum and expectations for health and wellness in property investment and management. It also put forward three major recommendations on how the sector might better incorporate health and wellness initiatives into its ESG strategies.

Click here to download the report.

Guidance on Financial Inclusion and Financial Health Target Setting

Published

<<Back to the guidance list

New | The Guidance on Financial Inclusion and Financial Health Target Setting supports signatory banks in their efforts to set targets in line with the requirements of the Principles for Responsible Banking.

Banks with ambitious targets for financial inclusion and/or financial health can drive positive outcomes for individuals, entrepreneurs, the whole society and the wider economy.

Download the Guidance

 

 

 

About the Guidance

By taking a systemic approach to financial inclusion and health, and working with partners and stakeholders to achieve these targets, banks can lead and enable significant positive impacts for millions of people across the world.

Using this guidance, banks can understand how to align their core business with the Sustainable Development Goals (SDGs), including SDG 1 (No Poverty), SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, innovation and infrastructure), SDG 10 (Reduced inequalities) and SDG 17 (Partnerships for the goals).

This guidance outlines the key steps for setting targets to drive increasing economic and social inclusion, followed by two illustrative examples of targets in financial inclusion and financial health.

This guidance was developed jointly by a working group of banking signatories of the Principles for Responsible Banking, the United Nations Environment Programme – Finance Initiative (UNEP FI) Secretariat, with support from Global Social Inclusion Consultant Leigh Smyth.

Aligning Financial Portfolios with Biodiversity Goals

26 May 2021 | Online

The new, ground-breaking biodiversity module within the ENCORE tool enables financial institutions to identify risks and opportunities, in order to align their activities to a goal of no net biodiversity loss globally. Two sessions of the webinar “Aligning Financial Portfolios with Biodiversity Goals” will be held virtually on Wednesday, 26th May 2021 to introduce this exciting new module.

Date: Wednesday, 26th May 2021
Session 1: 10:00 CEST | Register here
Session 2: 16:00 CEST | Register here

 

Guidelines for Climate Target Setting for Banks

Published April 2021

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The Guidelines for Climate Target Setting for Banks outline key principles to underpin the setting of credible, robust, impactful and ambitious targets in line with achieving the objectives of the Paris Agreement.

The guidelines outline four principles for target-setting:

  1. Banks shall set and publicly disclose long-term and intermediate targets to support meeting the temperature goals of the Paris Agreement.
  2. Banks shall establish an emissions baseline and annually measure and report the emissions profile of their lending portfolios and investment activities.
  3. Banks shall use widely accepted science-based decarbonisation scenarios to set both long-term and intermediate targets that are aligned with the temperature goals of the Paris Agreement.
  4. Banks shall regularly review targets to ensure consistency with current climate science.

The guidelines were drafted by the signatories to UNEP FI’s Collective Commitment to Climate Action, a leadership group of banks accelerating the commitment all Principles for Responsible Banking signatories have made to align their portfolio with the goals of the Paris Agreement. These guidelines also underpin the UN-convened Net-Zero Banking Alliance where banks have committed to a timeline of net-zero by 2050. The guidelines will be reviewed at least every three years, and sooner when required.

Download the Guidelines