Climate change is referred to by leading economists as the greatest market failure in human history, with potentially disruptive implications on the social well-being, economic development, and financial stability of current and future generations: conservative estimates see unabated climate change leading to global costs equivalent to losing in-between 5 to 20% of global gross domestic product (GDP) each year, now and forever.

As a result, public and private decision-makers around the world are faced with the dual imperative of:

  • Significantly – and rapidly – reducing greenhouse gas (GHG) emissions worldwide, by decarbonizing the global economy, in order to prevent the mean global temperature increase from reaching dangerous levels
  • Adapting global consumption and productions patterns, lifestyles, and the underlying supply-chains, to the physical – meteorological, hydrological – impacts of climate change that are now unavoidable

The finance sector, lying at the heart of today’s global markets, faces the same challenges, but it also is presented with the vast financial opportunities associated with overhauling economies towards climate-compatibility:

  • On the one hand, new risks – recently categorized into transition-, physical, and liability-risks –  need to be understood, identified, assessed, managed, and eventually disclosed on, by institutions across financial industries.
  • On the other hand will the transition to low-carbon and climate-resilient economies require additional investment at an order of magnitude of at least USD 60 trillion, from now until 2050; and that investment will require financing which, in part, will have to be provided by financial institutions: USD 35 trillion to decarbonize, through renewable energy and energy efficiency, the world’s energy system; another USD 15 trillion to adapt manmade infrastructure to changing meteorological conditions; and another 2 USD trillion to reorganize global land-use is ways that meet growing demands for agricultural commodities while stopping tropical deforestation.

For financial institutions to not only weather changing risk landscapes but for them to also become determined enablers and catalysts of the climate economic transition, a number of conditions need to be met: FIs need to understand the commercial risks and opportunities implied, and know how to act on them. Legislators and regulators, including financial regulators, on the other hand, need to understand the roles, potentials, and policy-needs, of financial institutions; they also need to know how they can help steer the finance sector to become an enabler, rather than inhibitor, of the climate economic transition.

As the interface between the financial industry and world Governments, UNEP FI is uniquely positioned to help meet those conditions. Join us.

Please contact Remco (Kai) Fischer  for more information.

25 November 2021

BLOG: COP26 – The moment private finance promised to lead

UNEP FI’s Climate Lead, Remco Fischer reviews the outcomes of COP26 and explains why ultimate climate success or failure depends on leadership from the private and the public sectors coming together, synergising, feeding and boosting each other to create a determined drive of economic decarbonisation. He also highlights the important role of the net-zero finance alliances…

11 November 2021

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

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…

11 November 2021

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…

2 November 2021

New research identifies remaining global carbon budget for twelve main industries

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,…

2 November 2021

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…

29 October 2021

BLOG: Eric Usher discusses what makes a credible net zero commitment

In the first two blogs in this series, I wrote about the UN Principles for Responsible Banking (PRB) and the ongoing dance between the private and public sector that is ratcheting up sustainability ambitions. Today, I finish up this pre-COP series by considering how significant the net-zero objective has become for the finance industry, and…

27 October 2021

UNEP FI delivers G20 input paper with recommendations for credible net-zero finance commitments

Ahead of the G20 Rome Summit this weekend, UN Environment Programme Finance Initiative (UNEP FI) today publishes its G20 input paper, ‘Recommendations for credible Net-Zero commitments from financial institutions’. UNEP FI is, for the first time, setting out a high-level framework for what a credible, transparent and comparable 1.5°C science-based commitment looks like and what…

20 October 2021

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

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,…

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6 December 2021 | Webinar

A Comprehensive Guide to Climate Stress Testing

UNEP FI’s TCFD programme is launching a Comprehensive Good Practice Guide to Climate Stress Testing. The report aims to provide a detailed user guide for financial institutions looking to understand the climate stress testing and develop plans for effectively executing them.

10 November 2021 | Hybrid

Driving Net-Zero Finance Integrity

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.

11 November 2021 | Virtual

COP26 event: Funding the Sustainable Blue Economy

This session focuses on how we can mobilise both public and private financial flows from banks, insurers and investors, towards a sustainable ocean industry that offers an immense potential for climate change mitigation and adaptation, using key frameworks and initiatives, including the Sustainable Blue Economy Finance Principles - to rebuild, renew and replenish the ocean - for people and planet.

28 October 2021 | Podcast

Podcast: Shaping a low carbon future – CEO dialogue

In this episode, Charles Emond, CEO of CDPQ and Guy Cormier, CEO of Desjardins address net zero targets, climate risks, greenwashing, systemic change, business opportunities and the energy transition with Nili Gilbert, Chair of the Investment Committee at the David Rockefeller Fund

31 October - 12 November 2021 | Hybrid

UNEP Finance Initiative at COP26: Watch the events you missed

The COP26 summit will bring governments, civil society and the private sector together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change (UNFCCC). Find out what UNEP FI is doing at COP26 to bring the latest climate commitments made by UNEP FI members to the attention of policymakers.

20 October 2021 | Virtual

Net-Zero Future: Credible Ambition and Pioneering Solutions

Ahead of the G20 Summit and COP26, hear from some of the most important net-zero pioneers who are acting now to decarbonize their portfolios and speaking out about the imperatives, challenges, opportunities and feasibility of doing so.

23 September 2021 | Virtual

From Venice to Glasgow: The road to COP26 for the Net-Zero Insurance Alliance

As risk managers, re/insurers and investors, the insurance industry plays a key role in supporting the transition to a resilient net-zero emissions economy. This global virtual event will gather experts in climate as well as industry practitioners who will unpack the concept of net-zero insurance.

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Good Practice Guide to Climate Stress Testing

UNEP FI’s Comprehensive Good Practice Guide to Climate Stress Testing is a detailed user guide for financial institutions looking to understand climate stress testing and develop plans for effectively executing them. It has been created to assist banks, investors and insurers in their climate stress testing journey and should be adapted to meet the needs…

Key Takeaways from the UNEP FI Leadership Council

Download the key takeaways from the inaugural meeting of the UNEP FI Leadership Council which convened 20 CEOs of banks and insurers across six continents in November 2021 to debate how to further mainstream sustainable finance and accelerate the pace and scale of action worldwide. The wide-ranging discussion focused on disclosure of risks and impacts, and…

Scaling Blended Finance

The UN-convened Net Zero Asset Owner Alliance released the Scaling Blended Finance discussion paper investigating obstacles to investing in climate solutions in emerging markets and arguing that blended finance vehicles can provide the necessary structures to help close the existing funding gaps in climate investment globally. Moreover, the paper lays out the potential solutions for…

Climate risk regulation in Africa’s financial sector and related private sector initiatives

This report highlights the state of climate risk regulation in Africa’s financial sector and presents an analysis of the financial stability architecture and climate risk initiatives in 12 selected deep-dive countries. It also highlights challenges hindering the integration of climate risk by financial sector authorities in Africa and offers potential areas of support for the key stakeholders in the finance ecosystem.

Credible Ambition, Immediate Action

This report summarises the actions, activities and achievements of the UN-convened Net-Zero Asset Owner Alliance and its members since its establishment in September 2019.

Liability Risk and Adaptation Finance

UNEP FI has partnered with MinterEllison to examine the impact of litigation in adaptation finance and address some of the challenges in scaling up adaptation capital identified in the GCA Adaptation Finance Paper published in 2019. This collaboration led to the publication of “The Forgotten Climate-related Financial Risk: Liability Impacts on Adaptation and Adaptation Finance“ in April 2021. 

Aligning Finance for the Net-Zero Economy: Thought Leadership Papers 5 & 6

UNEP FI has partnered with EIT Climate-KIC to bring the Thought Leadership Series, which presents papers from some of the world’s leading thinkers to help guide the financial sector towards a sustainable future. Our aim is to inspire financial actors worldwide to move from risk to alignment, challenge current assumptions around climate alignment and develop ideas…

The Climate Risk Landscape: Mapping Climate-related Financial Risk Assessment Methodologies

The Climate Risk Landscape: Mapping Climate-related Financial Risk Assessment Methodologies provides a summary of the key developments across third party climate risk assessment providers since May 2019, including new and updated scenarios, methodological tools, key guidelines, as well as an overview of the changing regulatory landscape and potential developments into 2021. This report covers both…

Pathways to Paris: A practical guide to climate transition scenarios for financial professionals

Pathways to Paris’ is a practical guide for financial practitioners looking to understand and apply climate scenarios. Co-authored with the Center for International Climate Research (CICERO), a world-renowned research institution on climate and climate finance, the report examines the driving assumptions and sectoral coverage of the models used to produce climate scenarios, as well as…

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