UNEP FI Regional Roundtable Europe 2019: Highlights

5 December 2019

The UN Environment Programme Finance Initiative (UNEP FI), Luxembourg for Finance (LFF) and Global Landscapes Forum (GLF) joined forces for three days to welcome over 500 sustainable finance professionals to Luxembourg on 28-30 November 2019.

The events, co-hosted by the Luxembourg Ministry of Finance and Ministry of the Environment, Climate and Sustainable Development, created a platform for financial sector leaders to demonstrate shifts to a sustainable global economy. Speakers included Valdis Dombrovskis, Vice President of the European Commission, HE Carole Dieschbourg, Luxembourg Minister for the Environment, Climate and Sustainable Development, Dr Werner Hoyer, President of the European Investment Bank and Eric Usher, Head of UNEP FI.

 “This is a man-made crisis. We can be the actors of change and turn this crisis into an opportunity.” – HE Carole Dieschbourg, Luxembourg Minister for the Environment, Climate and Sustainable Development

The keynote speech by Valdis Dombrovskis, Vice-President of the European Commission, highlighted that the financial sector has a great potential to drive change. The push for green technologies and shifts in consumer and green investment preferences is leading to policy change at EU level. He shared progress on the EU Action Plan and the new Commission’s proposed “New Green Deal for Europe”, which they hope to approve in the first 100 days.

Dr. Werner Hoyer, President, European Investment Bank (EIB) highlighted the bank’s latest commitments to phasing out lending for all fossil fuel projects due to climate change concerns. The EIB will not take on any new fossil fuel investments from 2022. “We will stop financing fossil fuels and we will launch the most ambitious climate investment strategy of any public financial institution anywhere,” said EIB President Werner Hoyer. This strategy includes unlocking €1 trillion in climate- and environment-related investments in the decade leading up to 2030, and comes with a commitment to align the EIB’s financing activities with the goals of the Paris Climate Agreement by the end of 2020.

“If financial service providers deliver the right products, it is possible to go from the billions to the trillions.” – HE Pierre Gramegna, Luxembourg Minister of Finance in his speech during a dinner hosted by Luxembourg for Finance and the Government of Luxembourg

During a high-level dialogue on climate commitments, Gunther Thallinger, Board Member of Allianz and one of the architects of the Net Zero Asset Owner Alliance, along with José Manuel González-Páramo, Executive Board Member and Head of Global Economics & Public Affairs, BBVA spoke about why investors and banks need to make ambitious climate commitments. Founding members of the UN-convened Alliance made a bold commitment at the UN Secretary-General’s Climate Summit in New York in September: to transition their investment portfolios to net-zero GHG emissions by 2050. Last week, AXA, Aviva, CNP Assurances and Fonds de Réserve pour les Retraites (FRR) joined the Alliance, raising total assets under management targeting carbon neutrality by 2050 to nearly USD 4 trillion. As a complimentary initiative, the Collective Commitment to Climate Action for banks was also launched in September. 34 banks representing USD 13 trillion have so far joined the Collective Commitment to align their portfolios to reflect and finance the low-carbon, climate-resilient economy required to limit global warming to well-below 2, striving for 1.5 degrees Celsius.

During the panel on the Principles for Responsible Banking, the CEOs of Banque Raiffeisen and Banque et Caisse d’Épargne de l’État (BCEE) announced that they had become the first banks in Luxembourg to sign up to the new banking framework. The panel also consisted of representatives from Barclays, Santander and the European Banking Authority as well as ShareAction, an NGO that has endorsed the Principles and promises to hold the banks accountable for their activities. Now that the Principles have launched, efforts are now focused on implementing them across the banking sector. Banks are required to report publicly on their positive and negative impacts, their contribution to society’s goals and their progress in implementing the Principles, and to engage with key stakeholders on their impacts – signatories now have 18 months to publish the first reporting and self-assessment which will be publicly available from 2021.

Financial centre roadmaps and strategies to advance sustainable finance were a focus of a plenary led by Stephen Nolan, Managing Director of the UN Environment hosted Financial Centres for Sustainability (FC4S). The session explored how roadmaps and strategies are being developed and implemented, some of the challenges and barriers, and the implications of leadership provided by governments versus market actors. Last year, Luxembourg launched a Sustainable Finance Roadmap with UNEP FI, which touched on many facets of the financial market, such as the development of financial products for sustainable finance, the development of training and education programmes, or the promotion of innovation to finance sustainable development.

“We must improve quickly. We are up against the clock. The next few years will be critical and while States are encouraged to upgrade their pledges under the Paris Agreement, the financial sector will also see benefits and play its societal role by fostering change, adaptation and transformation in the private and public sectors, to the benefit of all and for the good of future generations.” – Bruno Pozzi, Europe Director, UN Environment Programme

The event included several official launches, including the Sustainable Blue Economy Finance platform. This initiative will create a community of practice to bring together financial institutions, scientists, stakeholders in the ocean economy and other experts to support implementation of the Sustainable Blue Economy Finance Principles developed by the European Commission, WWF, the Prince of Wales’s International Sustainability Unit (now embedded into the World Resources Institute) and the European Investment Bank. The Initiative’s aim is to accelerate financing of economic activities from ocean-based industries, resources and ecosystem services that are in balance with the long-term capacity of the assets, goods and services of marine ecosystems.

The event also saw the launch of the TCFD pilot project report and investor guide to scenario-based climate risk assessment in real estate portfolios. Twelve institutional investors from eight countries, convened by UNEP FI and supported by Carbon Delta, have worked throughout 2018–2019 to analyse, evaluate, and test, state-of-the- art methodologies to enable 1.5°C, 2°C, and 3°C scenario-based analysis of their direct property investment portfolios in line with the recommendations of the FSB’s Task Force on Climate-related Financial Disclosures (TCFD).

A new report titled “Unwrapping the risks of plastic pollution to the insurance industry” was also launched at the Principles for Sustainable Insurance Market Event, which ran alongside the Regional Roundtable. This report shows that plastic pollution risks can affect insurance and investment portfolios in the form of physical, transition, liability and reputational risks. These range from threats to human health to evolving liability claims connected to marine litter and plastic pollution should be closely monitored by insurers in coming years.

A highlight for the event included a high-level dialogue on mobilising finance against slavery and trafficking, which was highlighted in a report released during the United Nations General Assembly in New York in September 2019. The Financial Sector Commission on Modern Slavery and Human Trafficking Chair Fiona Reynolds, who is also the CEO of the Principles for Responsible Investment (PRI) joined James Kofi Annan, a Global Financial Sector Commissioners for Modern Slavery who was a survivor of human trafficking and child slavery, for a discussion on stage.

Other sessions focused on portfolio alignment with the Paris Agreement, climate adaptation, mainstreaming impact in investment, impact analysis in corporate finance, the Taskforce for Climate-Related Financial Disclosure Recommendations, energy efficiency, setting science-based biodiversity targets and the role of finance in reducing deforestation.

UNEP FI would like to thank the Government of Luxembourg, Luxembourg for Finance, Global Landscapes Forum and all event partners, speakers and delegates for making the events such a huge success.

You can view photos from the events here.

For media enquiries please contact Mustafa Chaudhry.

Facebooktwitterlinkedin