Five years after the Paris Agreement, along with IPCC’s call for urgent action to prevent climate change catastrophe in the coming decade, 2020-21 has been billed as a key year for climate action. The COVID-19 crisis this year has marked a point of transformation for our economy and society by demonstrating how remarkable and rapid systems change can be. This global pandemic has given us a clear opportunity to pave the way for building back better and establishing new norms, as well as learning the lessons on how we might face the unabated climate crisis and future climate shocks.

A paradigm shift is needed if we are to move towards a limited or no-overshoot climate scenario. Stakeholders in financial markets, capital and investment represent important levers of change, as they have a key allocative role in our society and can enable investment into a net-zero low-energy future. Financial intermediaries can effectively support and mobilise the investment required for the systems change needed to transition our economy and society onto a net-zero carbon pathway that is compatible with 1.5°C by 2100.

UNEP FI has partnered with EIT Climate-KIC to develop a series of thought leadership papers that aims to inspire financial actors worldwide to move from risk to alignment, challenge current assumptions around climate alignment and develop ideas and concepts on how alignment can best be achieved. We hope to convey to stakeholders that a proactive climate response is not only about disclosing risks, but also about investing in green opportunities that can enable the low emissions societies of the future. This series convenes innovators and industry experts to provoke discussion, challenge the status quo and guide the transformation of business and finance towards a sustainable future.

The papers in this series will respond to a number of key questions :

  • What economic system transformation is actually required to deliver the Paris Agreement?
  • How do financial institutions achieve alignment with the Paris Agreement and how does it differ from transition risk transparency as captured in the TCFD?
  • What is the future of financial institutions as a result of these changes?
  • What are the various strategies and action tracks through which financial institutions can enhance and achieve full portfolio alignment?
  • What are the pathways and choices needed for financial institutions and the financial system to drive an active transition to a net-zero carbon economy?

The first two papers were launched on 2 September 2020:

1. Dr Ben Caldecott (University of Oxford): Achieving Alignment in Finance explores what climate alignment means for financial institutions.

2. Dennis Pamlin (Research Institutes of Sweden): Transformations Required for 1.5°C Alignment and Global Sustainability takes a look at the actions needed to deliver a 1.5°C society.


The third and fourth papers were launched on 9 February 2021:

3. Richard Roberts & John Elkington (Volans): Innovation and Transformation: What it will take to finance net zero looks at how finance and the economy can transform to meet the Paris Agreement, with a particular focus on the 1.5°C Low Energy Demand (LED) scenario, as outlined in the IPCC’s Special Report on Global Warming of 1.5°C.

4. Jakob Thomä & Anne Schönauer (2DII): Finance 2030: A Time Travel Exercise looks into the key characteristics that will shape the global finance sector in 2030.


Two final papers were launched on 13 April 2021, addressing two key elements of the finance sector and how they can help deliver a low carbon economy:

5. Massamba Thioye (UNFCCC): Making Green Bonds Serve the Climate Goals proposes a reform of the current green bond framework to incentivize mainstream financiers to buy green bonds.

6. James Vaccaro (Re:Pattern) & David Barmes (Positive Money): Financial Stability in a Planetary Emergency: the Role of Banking Regulators in a Burning World explores the leadership roles of regulators and the implications for financial institutions to accelerate the transition towards a resource-efficient and inclusive economy.

    For more information, please contact Remco Fischer or Paul Smith.

    *N.B.  The Thought Leadership Series is intended to provoke discussion and debate. It reflects the views of the authors but not necessarily those of EIT Climate-KIC, UNEP FI, or those of the Advisory Panel participants and their organisations.