UNEP FI at COP25: Highlighting finance sector action to governments, boosting climate finance ambition

The annual gathering of governments, private sector and civil society will now take place in Madrid, Spain between 2 and 13 December to further action on climate change and implement the promises that were made under the Paris Climate Agreement. Find out what UNEP FI is doing at COP25 to bring the latest climate commitments made by UNEP FI members to the attention of policymakers. UNEP FI members can attend many of the events – check out the list below and get in touch if you have questions about accreditation.

During the UN Secretary General’s 2019 Climate Action Summit, UNEP FI launched two high-ambition initiatives that will be key drivers of finance sector action on climate change in the coming years. 33 of the banks who signed the new Principles for Responsible Banking also launched a collective commitment to climate action, and 12 very large institutional investors unveiled the UN-convened Net-Zero Asset Owner Alliance.

With these two pledges, financial heavyweights like Allianz, SwissRe, Calpers, Societe Generale, BBVA, as well as institutions from Latin America such as BFA and Produbanco are committing to fully align their financial portfolios with the mitigation objectives of the Paris Agreement with intermediate targets every 5 years.

These groups are a natural response to the now established recognition that more sophisticated management of climate-related risks and a more systematic disclosure of such risks by financial institutions might actually not lead to a ‘greening’ of these institutions’ practices. In fact, the contrary could conceivably be the case. UNEP FI is therefore now advocating for an evolution from a risk-based narrative in climate finance towards a norms-based one. This narrative will emphasise (measurable and traceable) outcomes and impacts as opposed to procedural aspects of financial institutions’ behaviour. The two initiatives are a first credible indication of the success of this advocacy.

At COP25, UNEP FI will be bringing the new ambition in climate change action born at the Climate Action Summit in New York to the attention of governments worldwide, building on our dialogue with the Coalition of Finance Ministries on Climate Action and reaching out to other parts of society to encourage more ambitious action.

As financial institutions move beyond an approach to climate change finance that is purely risk-based and towards an approach that is also normative, and focused on environmental outcomes and impacts, banks, insurers and investors will have to turn their attention to their business models, and ensure their portfolios are not only compatible with but also enable the climate mitigation objectives of the Paris Agreement.

This new ambition will require combining the financing of the decarbonization of the economy – to prevent the worst form of climate change – with financing the adaptation of socio-economic systems to the climate change that cannot be mitigated.

UNEP FI is implementing this new ambition through three platforms: the two afore-mentioned initiatives with banks and asset owners, and our adaptation work which cuts across all financial industries. Read more about our platform on adaptation here.

UNEP FI at COP25

For more information on these events and to find out if you can get accreditation through UNEP FI email climate@unepfi.org.

Date and TimeLocation/AccessDetailsUNEP FI Member Participants
5th December 10:00-13:00Roundtable Room (tbc)Pressing Record on Climate Action

The objective of this two-day workshop is to put into motion a framework towards establishing metrics for tracking progress. This will enable cooperative and individual climate actions to be tracked from going forward in such a way that they will ultimately appear on the Global Climate Action portal and be utilized by the broader analytical and research community.
(None)
9th December 10:30-12:00within the COP perimeter, COP accreditation requiredPanel discussion: “The role of public finance for climate action in context of a new climate finance goal”

Focusing on the key role of public finance to support climate goals in developing countries including through fiscal, economic, and financial policies to cut emissions and prioritize low-carbon growth.

Watch session recording here..
Guenther Thallinger, CIO, Allianz
9th December 18:30-20:00within the COP perimeter, COP accreditation requiredInvestors, companies and Governments stepping up climate ambition in 2020 for a net-zero future
An Investor Agenda official side event, co-convened by UNEP FI.
Divya Mankikar, CalPERS
(Aviva Investors CIO, Pending Accreditation)
10th December 15:00-16:30Pavilion'Aligning Financial Flows with the 1.5 Climate Goal'
• Asset owners have committed to align investments with the 1.5°C goal
• Examples of tools that asset owners can use to implement their 1.5°C commitment
• Asset owner view
• Closing remarks by Margaret Kuhlow
Thomas Liesch, Allianz
11th December 10:00-12:00within the COP perimeter, COP accreditation requiredCaring for Climate – Global Compact Event Odd Arild Grefstad, CEO, Storebrand
11th December 15:00-16:00within the COP perimeter, COP accreditation requiredPress Briefing - UNFCCC Climate Ambition Alliance Karin Greve-Isdahl, Storebrand EVP
11th December Afternoonwithin the COP perimeter, COP accreditation requiredHigh Level Event with SG on Climate Ambition AllianceAXA CIO for Spain (TBC)
11th December 16:45-18:15within the COP perimeter, COP accreditation requiredClimate Alignment in the Financial Sector: An official side event by UNEP FI & Partners

This event will provide participants with a deeper understanding of what climate alignment is and how leading public and private financial institutions are working towards it.

In partnership with the Climate Policy Initiative, and the Rocky Mountain Institute
Paul Bodnar, Rocky Mountain Institute, Sylvain Vanston, AXA, Sarah Breeden, Bank of England, Barbara Buchner, Climate Policy Initiative, Remco Fischer, UNEP FI, Boitumelo Mosako, DBSA, Franco Piza, Grupo Bancolombia and Hubert Ruzibiza, Rwanda Green Fund.
12th December 10:00-12:00 outside of the COP perimeter, no accreditation required but invitation onlyUNEP FI’s official side event: New Climate Leadership

To clarify what climate leadership from financial institutions looks like today, showcase the new climate ambition from financial institutions and explore how to scale up this work.

In partnership with the Principles for Responsible Investment (PRI), the Corporacion Andina de Fomento (CAF), and Finisterrae University.
Nadia Calviño, Spanish Minister of the Economy and Business
Margarita Delgado, Central Bank of Spain
Inger Andersen, UNEP
Carlos Torres Vila, BBVA
José Antonio Álvarez, Santander

 

Find out more about COP25 here.

Axa, Aviva, CNP, FRR join UN-convened Asset Owner Alliance pushing for net-zero portfolios by 2050

27 November 2019

AXA, Aviva, CNP Assurances and Fonds de Réserve pour les Retraites (FRR) announced today they are joining the UN-convened Net-Zero Asset Owner Alliance, raising total assets under management targeting carbon neutrality by 2050 to more than $3.9 trillion.

The Alliance is a group of the world’s largest pension funds and insurers committing to fully decarbonise their portfolios to avoid a global temperature increase above 1.5°C. Launched in September at the Climate Action Summit, it was initiated by Allianz, Caisse des Dépôts (CDC), La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark, and Swiss Re, who were joined by Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand and Zurich as founding members.

Eric Usher, UNEP FI Head said: “The addition of four significant asset owners signals growing commitment by investors to align their portfolios with the ambitious 1.5°C target that goes beyond even the level of ambition reflected in the Paris Agreement. Concerted investor action led by the Alliance signals to financial markets that making entire portfolios net zero carbon is now clearly on the agenda.”

Now 16-strong, the Alliance actively encourages additional investors to join by committing to a net-zero portfolio by 2050 in support of a global economy that delivers emissions reductions in line with scientifically determined targets.

This is critical in light of recent evidence from UN Environment Programme’s Emissions Gap Report, published yesterday, which found collective ambition must increase more than fivefold over current levels to deliver the cuts needed over the next decade to achieve the 1.5°C goal. The Intergovernmental Panel on Climate Change (IPCC) has warned that going beyond 1.5°C will increase the frequency and intensity of climate impacts, such as the heatwaves and storms witnessed across the globe in the last few years. In the report, UNEP said the world must deliver deep cuts to emissions – over 7 per cent each year for the next decade.

Convener of Mission 2020 Christiana Figueres, former Executive Secretary of the UN Framework Convention on Climate Change (UNFCC), said: “Reaching net zero emissions by 2050 is a global imperative made clear by science, with huge benefits for all of society. “We are all better off when finance is flowing towards a liveable future, and today’s announcement makes clear that investors are committed to that pathway. That the world’s asset owners are collaborating unequivocally to limit warming to 1.5°C should be a real boost for all governments preparing to step up their own commitments under Paris in 2020,” she added.

 

PRI CEO Fiona Reynolds said: “Asset Owners have a key role to play in driving much needed ambition to address the climate emergency. In joining the Alliance, the new members stand alongside founding asset owners in committing to achieve carbon neutral portfolios by 2050. We hope that the leadership shown by members of the Alliance will compel other investors to act urgently to align their portfolios with a 1.5°C scenario and to play their role in meeting the Paris Agreement.”

By joining the Alliance, members hold themselves accountable on progress by setting and publicly reporting on intermediate targets in line with the Paris Agreement. The Alliance has already begun the process of establishing a work plan for 2020.

Members will ramp up engagement with the companies in which they are invested, working together with initiatives such as the UN Global Compact Business Ambition for 1.5°C, the Investor Agenda, the Science Based Targets initiative and Climate Action 100+.

Convened by UNEP’s Finance Initiative and the Principles for Responsible Investment (PRI), the Alliance is supported by WWF and is part of the Mission 2020 campaign, an initiative led by Ms. Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC).

 

Comments from the new Alliance members:

 

Maurice Tulloch, Aviva CEO: “Contributing to a more sustainable world is at the heart of our purpose. We’re investing with sustainability in mind, are engaging with companies through active stewardship and have been lowering our footprint for some time now. We want to accelerate our efforts. It makes good business sense, and it matters to our customers, partners, and the communities we work in. We will continue to make positive changes and are therefore proud to join the Net-Zero Asset Owner Alliance.”

Thomas Buberl, AXA Group CEO: “Our target is to contain the ‘warming potential’ of our investments to 1.5°C by 2050. But because we operate in a business environment which is not ‘Paris-aligned’, our investment universe is far above 1.5°C today. This is why we undertake this commitment with the expectation that governments and the actors of the ‘real economy’ will also take and implement meaningful climate commitments which we are keen to support. That is also why we have decided to join the Net-Zero Asset Owner Alliance, which is precisely designed to push this agenda. As part of this Alliance, we are notably looking forward to contributing to the development of common metrics and methodologies”

Yves Chevalier, Executive Director, FRR: “FRR is proud to be part of this asset owners’ initiative, which is aligned with our Responsible Investment Strategy. Given the urgency in climate issues, this strategy ushers in a new phase that will drive ambition further by increasing accountability at all portfolio levels and involving the entire financial management ecosystem to underline the leadership role assumed by the FRR over many years. Through this initiative, FRR will work with its peers in a realistic and efficient approach.”

Antoine Lissowski, Chief Executive Officer, CNP Assurances: “We are pleased to contribute, together with the other members of the Alliance and under the aegis of the United Nations, to this remarkable initiative to limit global warming and meet the objectives of the Paris Agreement. We want to work with all French asset-owners to create a real dynamic and achieve carbon neutrality in our portfolios by 2050.”

 

For more information on the UN-convened Net-zero Asset Owner Alliance visit the website here.

 

For press enquiries, please contact the following:

Oliver Wagg

oliver.wagg@UN.org

Mobile: +44 (0) 7885 377264

Sally Wootton

sally.wootton@UN.org

Tel: +41 (0)22 917 8591
Mobile: +41 (0)79 855 5355

33 banks announce a collective commitment to climate action

23 September 2019

33 banks commit to immediate action towards aligning with global climate goals

23 September/New York To coincide with the UN Secretary-General’s Climate Action Summit, one day after the launch of the UN Principles for Responsible Banking , 33 of their Signatories with over $13 trillion in assets have today announced a Collective Commitment to Climate Action. With this groundbreaking pledge, Founding Signatories of the Principles are taking tangible steps towards putting their commitment to align their business with international climate goals into practice. The commitment was announced during a full-day event on the implementation of the Principles for Responsible Banking, hosted by the thirty banks that led their development.

The Collective Commitment to Climate Action sets out concrete and time-bound actions that banks will take to scale up their contribution to and align their lending with the objectives of the Paris Agreement on Climate, including:

  • aligning 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;
  • taking concrete action, within a year of joining, and use their products, services and client relationships to facilitate the economic transition required to achieve climate neutrality;
  • being publicly accountable for their climate impact and progress on these commitments.

This is the farthest-reaching commitment to climate alignment by the banking sector to date. Speaking at the launch of the commitment, Eric Usher, Head, UNEP FI said, “By announcing their historic pledge on the day of the United Nations Climate Action summit these banks have shown the importance the private sector places on their continued commitment towards building a low-carbon, climate-resilient economy. They are demonstrating the constructive power of the banking industry through collective action to make a global impact.”

The Collective Commitment builds on the Katowice Commitment announced by five leading banks in 2018 and was formulated by a group of banks that had been working on the development of the Principles for Responsible Banking since their inception. They have now invited other banks to sign up to the commitment to rapidly grow this coalition in the next few months until the upcoming Santiago Climate Change Conference (UNFCCC COP 25).

In addition to the Collective Commitment to Climate Action for banks, asset owners from around the world are today also launching an important alliance regarding climate. Please see details on this complementary initiative, a coalition convened by UN Environment Programme Finance Initiative (UNEP FI) and partners here.

Please see the latest version of the Collective Commitment to Climate Action and all participating banks here. This document also includes quotes from CEOs and senior representatives of all banks announcing their Collective Commitment to Climate Action today.

About the Principles for Responsible Banking

The Principles for Responsible Banking were developed by a core group of 30 Founding Banks through an innovative global partnership between banks and the UNEP Finance Initiative (UNEP FI). UNEP FI is the UN-private sector collaboration that includes membership of more than 250 finance institutions around the globe.

For more information, including infographics and videos, please visit  https://www.unepfi.org/banking/bankingprinciples/

For more information and to arrange interviews, please contact:

Simone Dettling
Banking Team Lead, UNEP FI
Simone.dettling@un.org, +41 229178721

130 banks holding USD 47 trillion in assets commit to climate action and sustainability

22 September 2019

PRB Signing Group

New York, 22 September 2019 – In a massive boost for climate action and sustainability, leading banks and the United Nations today launched the Principles for Responsible Banking, with 130 banks collectively holding USD 47 trillion in assets, or one third of the global banking sector, signed up.

In the Principles, launched one day ahead of the UN Climate Action Summit in New York, banks commit to strategically align their business with the goals of the Paris Agreement on Climate Change and the Sustainable Development Goals, and massively scale up their contribution to the achievement of both.

By signing up to the Principles, banks said they believe that “only in an inclusive society founded on human dignity, equality and the sustainable use of natural resources” can their clients, customers and businesses thrive.

With global leaders coming together to share the actions they are taking to attain the Sustainable Development Goals and address climate change this week in New York, UN Secretary-General António Guterres said at the launch event, attended by the 130 Founding Signatories and over 45 of their CEOs, that “the UN Principles for Responsible Banking are a guide for the global banking industry to respond to, drive and benefit from a sustainable development economy.  The Principles create the accountability that can realize responsibility, and the ambition that can drive action.”

The Principles are supported by a strong implementation framework that defines clear accountabilities and requires each bank to set, publish and work towards ambitious targets. By creating a common framework that guides banks in growing their business and reducing risks through supporting the economic and social transformation required for a sustainable future, the Principles pave the way for the transformation to a sustainable banking industry.

“A banking industry that plans for the risks associated with climate change and other environmental challenges can not only drive the transition to low-carbon and climate-resilient economies, it can benefit from it,” said Inger Andersen, Executive Director of the United Nations Environment Programme (UNEP). “When the financial system shifts its capital away from resource-hungry, brown investments to those that back nature as solution, everybody wins in the long-term.”

While action on climate change is growing, it is still far short of what is needed to meet the 1.5°C target of the Paris Agreement. Meanwhile, biodiversity continues to decline at alarming rates and pollution claims millions of lives each year.

More ambition, backed by a step change in investment from the private sector, is needed to tackle these challenges and ensure that humanity lives in a way that ensures an equitable share of resources within planetary boundaries.

The banking and private sectors can benefit from the investment they put into backing this transition. It is estimated that addressing the SDGs could unlock USD 12 trillion in business savings and revenue annually and create 380 million more jobs by 2030.

“To transit to low-carbon and climate-resilient economies that support the goals of the Paris Agreement requires an additional investment of at least USD 60 trillion from now until 2050,” said Christiana Figueres, Convener, Mission 2020, who is credited as the architect of the Paris Agreement in her role formerly as Executive Secretary of the UN Framework Convention on Climate Change. “As the banking sector provides over 90 per cent of the financing in developing countries and over two thirds worldwide, the Principles are a crucial step towards meeting the world’s sustainable development financing requirements.”

About the Principles for Responsible Banking

The Principles for Responsible Banking were developed by a core group of 30 Founding Banks through an innovative global partnership between banks and the UNEP Finance Initiative (UNEP FI). UNEP FI is the UN-private sector collaboration that includes membership of more than 240 finance institutions around the globe.

For a complete list of all banks that have become the Founding Signatories of the Principles for Responsible Banking today and quotes from CEOs please click here.

For photos of the 22 September Official Signing and Global Launch Event, please click here.

Watch the signing ceremony here.

For more information, including infographics and videos, please visit
https://www.unepfi.org/banking/bankingprinciples/

For more information and to arrange interviews, please contact:

Simone Dettling
Banking Team Lead, UNEP FI
Simone.dettling@un.org, +41 229178721

Guidance developed on an impact-based approach to finance for real estate investors and asset managers

12 February 2019

The UNEP FI Property Working Group, in collaboration with RICS, PRI, and members of the Global Investor Coalition on Climate Change, have produced a practical, action-oriented framework to accelerate a new financing paradigm for the delivery of the global SDGs.

The 25 leading institutional investors and asset managers of the UNEP FI Property Working Group – alongside partners RICS, PRI, IIGCC, AIGCC, and IGCC[1] – have published a new guide for developing and executing an impact-based approach in real estate finance and management. The Positive Impact Real Estate Investment Framework responds to finance sector interest in investment outcomes for productive, equitable, healthy, and resilient economies and societies.

Positive Impact posits a holistic approach to finance, requiring an appraisal of both positive and negative impacts; consideration of all three dimensions economy, society and environment; and transparency and assessment of methodologies and impact achieved. The Positive Impact Real Estate Investment Framework offers a process tool for institutions to identify impact ‘areas of influence’ and corresponding investment opportunities, measure ex-ante and ex-post impact, and ultimately re-orient institutional capacities and capital for intentional delivery of outcomes that support the Sustainable Development Goals (SDGs). It draws upon the UNEP FI Impact Radar, guidance that translates the SDGs into meaningful terms for businesses and financing impact assessment.

For dissemination and uptake of the Positive Impact Real Estate Investment Framework, UNEP FI and its collaborating partners will run a series of webinars and events targeting real estate investors in several global regions in the first half of 2019. Further activities for 2019 will include a call for case studies for investments that have applied the Positive Impact Real Estate Investment Framework. For more information, please contact Matthew Ulterino, Property Investment Project Coordinator at UNEP Finance Initiative: matthew.ulterino@un.org.

Quotes from investors and collaborators:

“The real estate framework is a must-read for all property lenders and investors looking to increase their impact. It’s also a testament to the power of collaboration between institutions advancing sustainable finance.” Eric Usher, Head, UNEP Finance Initiative

“Through impactful investment frameworks real-estate investors can intentionally deliver social and environment outcomes that support the delivery of the UN Sustainable Development Goals’ target. We do this in Hermes by focusing on selected impactful investment themes – place making, climate and resource efficiency, health & well-being. The Real Estate Impact Framework is a useful tool for investors to map and select the most relevant actions they can take to support the SDGs suiting their specific investment strategies.” Tatiana Bosteels, Director Responsibility, Hermes Investment Management and chair UNEP FI Investment Commission

 “The real estate and built environment sector more broadly can absolutely implement the UN Sustainable Development Goals. We will only get results on sustainability if we help the sector prioritise looking at investments by both their positive and negative impacts, and initiatives like this framework are a tangible way we are supporting professionals to do so.” Sean Tompkins, CEO Royal Institution of Chartered Surveyors (RICS)

“As a long-standing member of the UNEP FI Property Working Group, PRI is pleased to have contributed to the development of this report. It provides a useful guide for any real estate investor looking to implement an impact-based strategy. “ Fiona Reynolds, CEO, Principles for Responsible Investment

“We welcome the publication of this guide, which will be an important tool for investors looking to increase the impact of their real estate investments in supporting the implementation of the Sustainable Development Goals and in contributing to a low carbon future.” Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGCC)

“Investors in Asia are increasingly looking to align their portfolios to the SDGs, and this framework is an essential tool helping investors readily identify where they can add impact to their strategies in real estate.” Rebecca Mikula-Wright, Director, Asia Investor Group on Climate Change

“This Framework provides a useful tool for Australian investors looking to better assess the impact of their capital allocation decisions and really drive sustainable outcomes in real estate.  We need new ways of thinking to better tackle the challenges we face. Guides like this will support greater investor action and ambition”, Investor Group on Climate Change (IGCC) Emma Herd, CEO, Investor Group on Climate Change

Notes to Editors

The Real Estate Investment Framework was published alongside other Model Frameworks from the Positive Impact Initiative, covering financial products for corporates with unspecified use of funds, as well as for project-related finance. For more information about the Positive Impact Initiative please contact, Careen Abb or Jérôme Tagger: careen.abb@un.org / Jerome.tagger@un.org

 

About United Nations Environment Programme – Finance Initiative.

UNEP FI is a partnership between United Nations Environment and the global financial sector created in the wake of the 1992 Earth Summit with a mission to promote sustainable finance. More than 230 financial institutions, including banks, insurers, and investors, work with UN Environment to understand today’s environmental, social and governance challenges, why they matter to finance, and how to actively participate in addressing them.

UNEP FI’s work also includes a strong focus on policy – by facilitating country-level dialogues between finance practitioners, supervisors, regulators and policy-makers, and, at the international level, by promoting financial sector involvement in processes such as the global climate negotiations. For more information, see https://www.unepfi.org/

About the Asia Investor Group on Climate Change.

AIGCC is an initiative to create awareness among Asia’s asset owners and financial institutions about the risks and opportunities associated with climate change and low carbon investing. AIGCC provides capacity for investors to share best practice and to collaborate on investment activity, credit analysis, risk management, engagement and policy. For more information, see http://aigcc.net/

About the Investor Group on Climate Change.

IGCC is a collaboration of 60 institutional investors and advisors, managing over $1 trillion and focusing on the impact that climate change has on the financial value of investments in Australasia. The IGCC aims to encourage government policies and investment practices that address the risks and opportunities of climate change, for the ultimate benefit of superannuate and unit holders. One of IGCC’s streams of work is focussed on climate change risk and opportunities in the built environment, as well as considerations around climate change adaptation and resilience. For more information, see www.igcc.org.au

About the Institutional Investors Group on Climate Change.

The Institutional Investors Group on Climate Change (IIGCC), is the pre-eminent European forum for investor collaboration on climate action and the voice of investors taking action for a prosperous, low carbon, future. It has 153 mainly mainstream investors across 12 countries with over €21 trillion assets under management (including nine of the top ten largest European pension funds or asset managers). IIGCC’s mission is to mobilise capital for the low carbon transition by working with business, policy makers and investors to encourage public policies, investment practices and corporate behaviours that will address the long-term risks and opportunities associated with climate change. Members consider it a fiduciary duty to ensure stranded asset risk or other losses from climate change are minimised and that opportunities presented by the transition to a low carbon economy – such as renewable energy, new technologies and energy efficiency – are maximised. For more information, see www.iigcc.org and @iigccnews

About the Principles for Responsible Investment (PRI).

The PRI works with its international network of institutional investor signatories to put the six Principles for Responsible Investment into practice. Its goal is to understand the investment implications of environmental, social and governance issues and to support signatories in integrating these issues into investment and stewardship decisions. The six Principles were developed by investors and are supported by the UN. There are over 2,100 signatories from over 50 countries representing US $ 81.7 trillion of assets (as of April 2018). The six Principles are voluntary and aspirational, offering a menu of possible actions for incorporating ESG issues into investment practices. In implementing the Principles, signatories contribute to developing a more sustainable global financial system. For more information, see www.unpri.org

About the Royal Institution of Chartered Surveyors (RICS).

RICS promotes and enforces the highest professional qualifications and standards in the valuation, development and management of land, real estate, construction and infrastructure. The RICS name promises the consistent delivery of standards – bringing confidence to markets and effecting positive change in the built and natural environments. For more information, see www.rics.org

 

[1] United Nations Environment Program Finance Initiative; Royal Institution of Chartered Surveyors; Principles for Responsible Investment; Institutional Investors Group on Climate Change; Asia Investor Group on Climate Change; Investor Group on Climate Change

New Guide Launched In Zurich Empowers Banks To Assess Natural Capital Risk

16 January 2019

A week before the World Economic Forum in Davos, where global financial leaders will discuss society’s most pressing issues, the Natural Capital Finance Alliance (NCFA) has launched the world’s first step-by-step guide to help financial institutions conduct a rapid natural capital risk assessment.  The Natural Capital Finance Alliance engaged with PwC to produce the guide.

The guide has already been piloted by five banks, including First Rand in South Africa who said it “enabled us to look at our portfolio in a new way”. It promotes the use of the recently launched ENCORE tool (Exploring Natural Capital Opportunities, Risks and Exposure), which enables financial institutions to understand and assess their exposure to natural capital risks.

The guide aims to fully unlock the power of ENCORE and, as part of the Advancing Environmental Risk Management (AERM) project, helps global banks to better understand how the pollution of oceans or destruction of forests, for example, may affect their financial future. AERM is a wider project by NCFA to help financial institutions understand and integrate the risks they face because of environmental degradation into their risk assessment methods and decision-making tools.

The guide has two core elements:

  • Rapid Natural Capital Risk Assessment, which allows an institution to quickly identify the areas of highest natural capital risk.
  • Sector/Asset Analysis, which uses data on drivers of environmental change and the state of natural capital assets, to assess the likelihood of disruption of relevant ecosystem services. This could help financial institutions in their climate scenario analyses as recommended by the TCFD.

By combining a comprehensive knowledge base with environmental scenarios and location-specific asset data, financial institutions can assess and manage their natural capital risk in qualitative and quantitative terms. This insight can be incorporated into existing risk processes, for example, by combining internal data on client location with environmental data to improve strategic scenario planning and credit risk management.

Attendees at today’s event, held in Zurich and co-organised by Swiss Sustainable Finance (SSF), will receive an overview of ENCORE, as well as an introduction to the broader AERM project, both funded by the Swiss State Secretariat for Economic Affairs (SECO) and the MAVA Foundation. The guide also includes case studies of how financial institutions globally are using the power of ENCORE to assess their dependence on nature.

Liliana de Sá Kirchknopf, Head of Private Sector Development Division, State Secretariat for Economic Affairs in Switzerland (SECO), said:

“The degradation of natural ecosystems poses a material threat to future economic growth. Until now, the financial community was not able to systematically assess and manage such risksThat is changing thanks to our collaboration with the NCFA to create a natural capital framework for financial institutions.  Practical tools like ENCORE define the link between environmental change and economic consequences, so market players are empowered to make sustainable financing decisions.” 

Niki Mardas, Executive Director at Global Canopy, said:

“This timely report sends a powerful message that when financial leaders consider the environment at Davos next week they must consider not just greenhouse gases, but also how to build wider ecosystem resilience from rainforests to coral reefs. If we are to build more sustainable capital markets, financial institutions must be able to easily integrate their dependence on nature into existing risk management. That’s why today’s launch of NCFA’s natural capital risk assessment framework is so important. Using it alongside the ENCORE tool, financial institutions can now systematically identify natural capital risks and act on them.”

Madeleine Ronquest, Head of Environmental and Social Risk, Climate Change at FirstRand Limited, said:

“The South African economy has a deep dependence on nature, and is particularly vulnerable to extreme climatic events, which are becoming more frequent and intense. The severe challenges around the availability and supply of drinking water in Cape Town is just one example of this. The AERM project enabled us to look at our portfolio in a new way, looking at thresholds and exposure, especially in the case of water-related risk. It can help us forecast and has opened up potential new opportunities. It has brought our teams together in a valuable learning journey. We are very happy with the outcomes of the testing phase and got far more out of it than expected.”

Jon Williams, sustainability and climate change partner at PwC UK, said:

Our work with NCFA and its partners makes a further and material advance in environmental and social risk management in banks. The report provides practical guidance and tools for managing natural capital risks, present in many banking portfolios but often hard to identify, assess and mitigate. By piloting the approach with the banks involved in this project, we believe this provides a tested risk management framework that can be adopted by other financial institutions. Given the increasing erosion of natural capital and the increasing risks that businesses and their financiers face, this report is a timely addition to the tools available to risk managers.”

 

Produced by the Natural Capital Finance Alliance (NCFA) in collaboration with PwC, the guide is the second phase of the Advancing Environmental Risk Management (AERM) project. Download the report here.

The report from the first phase can be found here.

 

About NCFA

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. It works to support these institutions in integrating natural capital considerations into their risk management processes and products as well as helping them to discover new opportunities. The NCFA secretariat is run jointly by the UN Environment Finance Initiative and Global Canopy.

About Global Canopy

Global Canopy is an innovative environmental organisation that targets the market forces destroying tropical forests. Our mission is to accelerate progress towards a deforestation-free global economy – through improved transparency, innovative finance and strategic communications. Since 2001, we have catalysed new thinking and action by leading governments, companies and investors worldwide. For more information, see www.globalcanopy.org.

About UNEP FI

The United Nations Environment Finance Initiative (UNEP FI) is a unique global partnership between United Nations Environment and the global financial sector founded in 1992. UNEP FI works closely with over 230 financial institutions who have signed the UNEP FI Statements as well as a range of partner organisations to develop and promote linkages between sustainability and financial performance. Through peer-to-peer networks, research and training, UNEP FI carries out its mission to identify, promote, and realise the adoption of best environmental and sustainability practice at all levels of financial institution operations. For more information, see www.unepfi.org

About SSF

Swiss Sustainable Finance (SSF) strengthens the position of Switzerland in the global marketplace for sustainable finance by informing, educating and catalysing growth. The association, founded in 2014, has representation in Zurich, Geneva and Lugano. Currently SSF unites 108 members and network partners from financial service providers, investors, universities and business schools, public sector entities and other interested organisations. An overview of Swiss Sustainable Finance’s current members and network partners can be found here.

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with over 250,000 people who are committed to delivering quality in assurance, advisory and tax services. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. PwC UK, PwC South Africa, PwC Colombia and PwC Peru were engaged with the Natural Capital Finance Alliance in this work.

 

 

Climate Success at COP24: after intense negotiations new rulebook breathes life into Paris Agreement but much more decarbonisation ambition needed

18 December 2018

 

On Saturday, following two weeks marked by dramatic rhetoric and intense negotiations over legal language, close to 200 Governments bridged a deep global divide and agreed on the set of rules meant to steer countries worldwide in implementing the historic 2015 Paris Agreement on climate change. UNEP FI’s Climate Lead, Remco Fischer gives more detail on the decisions made at COP24 and provides a summary of UNEP FI’s events and inputs including recordings of sessions, which helped facilitate a strong presence from the financial industry.

 

The Rulebook of the Paris Agreement

The finance sector – including over 400 investors –asked for a Paris Agreement rulebook. COP24 in Katowice delivered this. 

By defining nations’ responsibilities for tackling climate change, reporting their progress – both reductions in greenhouse gas emissions as well as in the provision of financial resources – and upping their efforts for decades to come the Rulebook puts the Paris Agreement into action.

Two common threads ran through each of the areas in the Rulebook. First, whether to agree a single set of rules for all countries – with flexibility for those that need it – or to maintain the current and historic divide between rules for developed countries and rules for developing countries. This is commonly referred to as “differentiation”.

Overall, the COP decisions made on Saturday tend towards single sets of rules for all countries, with some latitude for those that lack the capacity to meet them. On finance, the rules are relatively permissive, giving flexibility to developed countries in what and how they report their contributions. More details on the various decisions made on the Rulebook are provided further below.

 

The Ratchetting-up of Ambition

The finance sector – including over 400 investors –  have demanded that countries up their climate ambition to align with the long-term objectives of the Paris Agreement. COP24 in Katowice delivered momentum for more ambition, as well as the mechanisms for more ambition, but no country has stepped up yet.

In addition to the challenge of operationalizing the Paris Agreement through the Rulebook another key theme at COP24 was the climate and decarbonization ambition that countries have shown in their climate pledges to date and – given the persistent lack of collective ambition and, as a result, the still enormous ‘emissions gap’ – the avenues at hand to increase it.

According to UN Environment’s Emissions Gap Report, launched at UNEP FI’s Global Roundtable in Paris, the ‘emissions gap’ is the difference between “where we are likely to be and where we need to be”. As the emissions gap assessment shows, the current level of ambition in countries’ climate pledges needs to be roughly tripled for the 2°C scenario and increased around fivefold for the 1.5°C scenario.

To that effect, and in addition to the Rulebook, COP24 delivered the Talanoa Dialogue Call for Action, as well as dramatic appeals from UN Secretary-General António Guterres, Sir David Attenborough, and Swedish schoolgirl Greta Thunberg.

However, COP24 did not yield any increased country ambition yet. This is an urgent need now and the UN Secretary General’s Summit in September of 2019 will focus on meeting that need.

Financial institutions, as well as their clients and investees, also need to increase their own ambition by phasing out fossil fuels in ways that minimize impacts for workers and communities, scaling-up low-carbon financing, and ultimately aligning their portfolios with the Paris Agreement and a 1.5 degrees-compatible global economy.

 

The COP decisions in detail

In more detailed and specific terms, COP24 agreed:

On NDC guidance – Article 4

  1. That countries’ climate pledges – the so-called nationally Determined Contributions (NDCs) – will be recorded in a public, and ‘searchable’, registry based on the current interim registry.

 

  1. That, in their reporting on NDC progress, all countries shall use the latest emissions accounting guidance from the Intergovernmental Panel on Climate Change (IPCC). This is meant to make it easier to compare pledges, to monitor progress over time, and to add them to global aggregates.

 

  1. That NDCs should cover a common timeframe from 2031, with the number of years included in such a timeframe to be agreed on later on. Some current pledges at the moment cover five years while others cover 10.

On Climate Finance Reporting – Article 9

  1. That developed countries ‘shall’ and developing ‘should’ report on any climate finance they provide, as demanded for developing country Governments, but heavily caveated by loose wording such as: “Enhanced information to be provided […] as available” or “An indication of new and additional resources to be provided”. Also, countries are allowed to report the full value of loans they provide as climate finance, rather than the “grant-equivalent” portion of the total, which is a departure from established practice in development finance & assistance, and as such is being criticized heavily by civil society organizations.

On Transparency – Article 13

  1. That – when it comes to countries’ reporting on their climate efforts including emissions reporting, NDC progress, adaptation to physical climate change, climate finance provided or received – a single set of rules shall apply to both developed and developing countries. This had been a key issue and key red line for the US and EU, which had wanted to hold the likes of China to the same reporting standards that they face. Still, this single set of rules is to be applied with flexibility for “those developing country parties that need it in the light of their capacities”, with developing countries themselves “self-determining” whether they need flexibility, but also with them stating why they need it, how long they expect to continue needing it, and what they plan to do to stop needing it. Despite this flexibility, it is widely recognized that the new rules will translate into a substantial intensification of biannual reporting requirements under the UNFCCC and a key departure from the current practice of only having the 44 developed nations under the Convention report biannually.

 

  1. That these new reporting rules will kick in from 2024, one year after the first global stock-take of progress.

Global stock-take – Article 14

  1. On the ground rules of the Global Stock-takes through which: i) every five years, countries are meant to come together and take stock of progress towards the long-term Paris goal of avoiding dangerous global warming, and then, with this global stock-take in hand, ii) countries go home and return with enhanced climate pledges to fill gaps in ambition.

 

  1. On the structure of the stock-take process which is to be divided into three stages – i) Information collection; ii) Technical assessment: iii) Consideration of outputs – with the technical assessment being key as a step meant to ‘de-politicize’ and ‘objectify’ the stock take deliberations and their outcomes.

 

On Market mechanisms – Article 9

 

  1. To defer most decisions related to Market Mechanisms (Article 6) to 2019, which includes the extent to which countries can ‘trade’ their NDC-related overachievement, the extent to which individual projects can generate carbon credits for sale (in manners resembling the Kyoto Protocol’s Clean Development Mechanisms – CDM) , and related measurers to avoid ‘double-counting’ of emissions reductions.

 

Other matters

  1. To set up an expert compliance committee to enable monitoring of countries’ compliance with their NDCs with this committee being “facilitative in nature…non-adversarial and non-punitive”. The committee will be able to investigate countries that fail to submit climate pledges. Regarding transparency reports covering climate finance or emissions and progress in cutting them, the committee “may, with the consent of the party concerned, engage in a facilitative consideration of issues in cases of significant and persistent inconsistencies of the information”.

 

UNEP FI’s Input and Involvement at COP24

UNEP FI helped facilitate a strong presence from the financial industry through a range of events and inputs, many of which were recorded and can be viewed below.

 

  • Side event hosted by the International Chamber of Commerce on Climate Finance – Next steps for climate action with participation from the German Federal Ministry for Economic Cooperation and Development (BMZ), the ICC, the NewClimate Institute, WWF, and UNEP FI.

 

  • A cross-cutting roundtable convened by the UN Climate Secretariat on Climate-Action and Finance Mobilizing climate-aligned investment

 

 

  • A European Commission-hosted event on Public finance for low-carbon transitions: Changing paradigms, policies and practices in Europe and the G20, with participation from the European Investment Bank, IPEEC, and UNEP FI.

 

  • A side event on Adaptation finance and the TCFD recommendations convened by Acclimatise and the European Investment Bank, with participation from the EIB, the EBRD, the AFD, the IDB, the Global Commission on Adaptation, and UNEP FI. A recording of the session can be viewed here.

 

 

  • A WWF-hosted session focused on Financial regulation as a lever for driving the shift of financial flows. A recording of the session can be viewed here.

For more information contact Remco Fischer.

Visionary solutions to the Sustainable Development Goals’ funding gap from UNEP FI’s Positive Impact Initiative

26 November 2018

Paris, 26 November 2018 – How to achieve the Sustainable Development Goals?

UNEP FI’s Positive Impact Initiative proposes a new approach: social, economic and environmental impacts have an as-yet under explored potential to generate financial revenues: impact-based business models can be developed, with the delivery of positive impacts as a driver of sustainable business growth and long-term enterprise value. This could be game-changing: by making it cheaper to deliver sustainability outcomes, less risky to finance and would stimulate the private sector to create new business solutions that focus on positive impacts. In fact, this shift to an impact-based economy is already under way, and the finance sector has a strategic interest in understanding impacts, not only to meet stakeholder needs, but also to capture new opportunities that support this transformation. Accordingly, it is critical for banks and investors to improve their capacity to understand and analyze impact.

UNEP FI’s Positive Impact Initiative (PI) makes these arguments in “Rethinking Impact to finance the SDGs: a position paper and call to action” –  released on 26 November at UNEP FI’s 2018 Global Roundtable in Paris.

According to Ligia Noronha, Director Economy Division, UN Environment: “Rethinking Impact to Finance the SDGs” is a major contribution to solving the sustainable development puzzle.  It will transform the way we think about business and finance.”

Supporting this release are several game-changing tools for impact analysis and management: The PI Impact Radar translates the SDGs into meaningful terms for business and finance. PI Model Frameworks provide guidance to apply holistic impact analysis across different financing products and asset classes, as a pragmatic application of PI’s Principles for Positive Impact Finance, for decision-making, for the development of financial products, and for the overall review of portfolios.

Download Rethinking Impact to Finance the SDGs

Download the executive summary in German
Download the executive summary in Chinese (Mandarin)
Download the executive summary in French
Download the executive summary in Arabic

Download the PI Radar

Download the Model Framework for unspecified use of funds
Download the Model Framework for specified use of funds
Download the Model Framework for real estate investment

Securities regulators promoting sustainable finance, new UN report

24 October 2018

The latest report from the United Nations Sustainable Stock Exchanges (SSE) initiative outlines an action plan for regulators wishing to support the Sustainable Development Goals. With 35 examples from 19 markets, the report provides a snapshot of what is happening around the world today. The regulators report was released during the SSE Global Dialogue, which was held during UNCTAD’s 2018 World Investment Forum in Geneva, Switzerland on 23 October 2018.

Increasingly securities regulators around the world have demonstrated interest in the relationship between sustainability issues and their core mandates. Although securities regulators’ specific roles, responsibilities and authorities differ across jurisdictions, their objectives are generally to protect investors, to ensure that markets are fair, efficient and transparent, and to reduce systemic risk.

Sustainability issues can create financially material risks and opportunities for investors and may affect the resilience of the financial system as a whole. Because of this, sustainability issues and the policy responses to these issues are of direct relevance to securities regulators’ existing mandates. As an articulation of the world’s most pressing sustainability issues, the SDGs can be seen as an “ESG+” policy framework providing guidance for policy and markets in these areas.

Recognizing that there can be no one-size-fits-all approach, the report aims to facilitate the sharing of experiences, and presents a range of actions that are supplemented by examples of what securities regulators have already done to boost sustainable finance. An advisory group of nearly 70 capital market stakeholders globally – regulators, exchanges, investors – produced the report.

“In jurisdictions around the world, securities regulators are taking actions to support sustainable development, but we are facing the challenge of having to do much more to meet our global goals,” said James Zhan, Chairman of the SSE Board and Director of Investment and Enterprise at UNCTAD. “This report shows how securities regulators are beginning to recognize the urgency in which we must act, and provides an action plan to accelerate momentum.”

“We welcome this area of work from the SSE, as the work of security regulators is critical if we are to create a sustainable financial system that can contribute to the Sustainable Development Goals, while providing beneficiaries with a positive return on their investments. While we have seen a surge in much-needed regulation related to sustainability in recent years, in order for this regulation to be truly effective, we need to set more clear objectives and more integration with broader financial regulation. Through both the SSE and our own policy work at the PRI, we stand ready to support the work of security regulators in helping to create a truly sustainable financial system,” said Fiona Reynolds, CEO of Principles of Responsible Investment (PRI).

The Chair of the SSE Advisory Group on Securities Regulations and Executive Chairman of the Financial Regulatory Authority in Egypt, Dr. Mohammed Omran, said “this new SSE research provides a constructive framework and practical set of illustrative examples to help securities regulators further explore how they can encourage investment in sustainable development.”

“In this guidance, the SSE outlines key considerations for securities regulators and identifies areas in which they can most usefully focus their efforts to uphold their responsibilities as regulators while helping to align capital markets with the needs of the future via the SDGs,” said Mary L. Schapiro, 29th Chair of the U.S. Securities and Exchange Commission.

Learn more here and download the full report here.

Download the SSE 2018 Report on Progress here.

 

About the SSE

The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.

UNEP FI launches Sustainable Finance Roadmap for Luxembourg

1 October 2018

On October 4 2018, the Minister of the Environment, Carole Dieschbourg, the Minister of Finance, Pierre Gramegna and UNEP FI Head, Eric Usher presented the new “Luxembourg Sustainable Finance Roadmap” and its recommendations. These touch on many facets of the financial market, such as the development of financial products for sustainable finance, the development of training and education programs for the needs of the financial sector, or the promotion of innovation to facilitate the financing of sustainable development.

Luxembourg’s Ministry of Finance and the Department of Environment of the Ministry of Sustainable Development and Infrastructure mandated UNEP FI to develop a roadmap to scale up the financial sector’s contribution to sustainable development, the Luxembourg Sustainable Finance Roadmap. The report was drafted with the support of Innpact, a Luxembourg-based impact financing specialist, and in close collaboration with the financial sector and representatives of the civil society, through an open, creative and inclusive process involving various working groups and interview sessions.

The aim of the roadmap is to draw up an inventory of existing initiatives in Luxembourg in the field of sustainable finance, and lay the foundations for a sustainable financial strategy, contributing to the UN 2030 Agenda and the objectives of the Paris Agreement on Climate Change. It also aims to consolidate the leading role of the Luxembourg financial center in the field of sustainable finance. It is ambitious in terms of Luxembourg’s contributions to sustainable development and to European and international climate initiatives and takes a forward-looking approach in terms of identifying future opportunities and challenges.

In response to UNEP FI’s recommendations, the Ministers have established a public-private entity, the “Luxembourg Sustainable Finance Initiative” to undertake further analyses based on the report findings, in order to develop a plan of concrete and adapted measures to be achieved over the coming years. The Initiative, which will bring together relevant actors in the field of sustainable finance, will be co-chaired by the Ministry of Finance and the Department of the Environment of the Ministry of Sustainable Development and Infrastructure. The entity will be the ideal forum for developing the National Strategy for Sustainable Finance for Luxembourg based on the key elements of the Roadmap. It will also serve as a discussion platform for analyzing the feasibility and impact of measures stemming from the recommendations.

Eric Usher, Head of UNEP FI, said: “Luxembourg is setting the course for sustainable finance to fulfil its critical role in achieving sustainable development. Sustainability is increasingly a performance driver, a trillion dollar investment opportunity that needs to be at the heart of the business strategies of banks, insurers and investors. This comprehensive study provides important guidance to Luxembourg, and other countries establishing roadmaps for a sustainable future. Luxembourg is demonstrating leadership by acting on two key recommendations of our report – developing a national sustainable finance strategy and creating a Sustainable Finance Initiative to co-ordinate implementation.”

The Minister of Finance Pierre Gramegna commented: “This roadmap builds on the strong collaborative spirit that exists here in Luxembourg between the financial center, the government and the civil society in the field of sustainable finance. It is thanks to the efforts of all these actors that Luxembourg has established itself as one of the European leaders in this field and continues to shape the future of sustainable finance”

The Minister for the Environnement Carole Dieschbourg added: “Implementing the Paris Agreement and the UN 2030 Agenda requires fundamental changes in the global financial architecture. I am convinced that the recommendations contained in this roadmap will contribute to rapidly shifting from high-carbon investments towards energy and resource efficient alternatives, based on renewable energy technologies.”

Download the full report

Executive Summary in English

Executive Summary in French

Download the press release

UPDATED: 28 UNEP FI banking members working together to redefine how the banking industry delivers a sustainable future

29 May 2018

Go to the main Principles for Responsible Banking page for more information and to find out how you and your organisation can get involved.

Update as of 30 September: 28 banks are now collaborating to develop the Principles for Responsible Banking.

29 May, 2018

Twenty-six leading banks from 5 continents representing USD 16 trillion in assets are re-defining banks’ purpose and business model to align the sector with the UN Sustainable Development Goals (SDGs) and the Paris Climate Agreement.

Both the UN Sustainable Development Goals (SDGs) and the Paris Agreement on climate change have set ambitious targets to deliver a sustainable future for all. As two thirds of worldwide finance is provided by banks, the global banking system will be instrumental in achieving these goals.

Twenty-six of UN Environment Finance Initiative’s banking members are leading an initiative for banks worldwide to reaffirm their purpose and align their business practices with these objectives. Convened by the UNEP FI secretariat, the banks are developing global Banking Principles that will:

  • direct banks’ efforts to align with society’s goals as expressed in the SDGs, the Paris Agreement, as well as national and regional frameworks
  • set the global benchmark for sustainable banking
  • drive ambition by requiring signatory banks to set goals for and report on their contribution to national and international social, environmental and economic targets
  • ensure accountability and transparency on banks’ impacts
  • challenge the banking industry to play a leading role in creating a more sustainable future

Similar to the role the Principles for Responsible Investment (PRI) play for asset managers and the Principles for Sustainable Insurance (PSI) for insurance underwriters, these standards will address the longstanding need for an umbrella framework to cover all aspects of sustainable banking.

The process of developing the Principles will include consultation with a wide range of stakeholders, such as civil society organizations, banking associations, regulators and UN bodies. The first in-person meeting of the participating banks took place in London on 19th and 20th April. We plan to launch the draft Principles for global consultation during the UNEP FI Global Roundtable 2018 on 26 November at Palais Brongniart, Paris, France.

Members of the Core Group (in alphabetical order):

Access Bank (Nigeria), Arab African International Bank (AAIB) (Egypt), Banco Pichincha (Ecuador), Banorte (Mexico), Barclays (United Kingdom), BBVA (Spain), BNP Paribas (France), Bradesco (Brazil), Commercial International Bank (CIB) (Egypt), First Rand (South Africa), Garanti Bank (Turkey), Golomt Bank (Mongolia), Hana Financial Group (South Korea), Industrial and Commercial Bank of China (ICBC) (China), ING (Netherlands), KCB Group (Kenya), Land Bank (South Africa), Nordea (Sweden), Piraeus Bank (Greece), Santander (Spain), Shinhan Financial Group (South Korea), Societe Generale (France), Standard Bank (South Africa), Triodos Bank (Netherlands), Westpac Group (Australia), YES Bank (India)

Please find the press releases from the Core Group here:

Connecting Finance and Natural Capital: Launch of a tool for financial institutions to assess their impact and dependence on the natural world

23 April 2018

Launched today, in Hong Kong, ‘Connecting Finance and Natural Capital: A Supplement to the Natural Capital Protocol’ is a tool for financial institutions to assess how their business is impacted by, and depends upon the natural world.

The Natural Capital Protocol has created a globally recognized and standardized framework for business. This supplement to the Protocol, aims to connect finance and natural capital in the same way, and to create a common language across business, government, civil society and finance on this important topic. The Finance Sector Supplement (FSS) has been developed in partnership with the Natural Capital Coalition and VBDO, and provides a framework for financial institutions to assess the natural capital impacts and dependencies of their portfolios. It explains why financial institutions should undertake this assessment, what the impacts and dependencies are, and what techniques to use, and is aimed primarily at ESG analysts, environmental managers, responsible investment managers, due diligence specialists, risk managers, analysts, and portfolio managers.

 

Download the Finance Sector Supplement here.

Read Anders Nordheim’s blog on the importance of treating nature as a form of capital here.

Leading investors partner with UN to boost climate transparency by piloting Task Force for Climate-related Financial Disclosures recommendations

15 March 2018

 

 

 

 

 

 

UN Environment Finance Initiative (UNEP FI), together with nine investors representing close to US$ 3 trillion have formed a leadership group to promote action on climate transparency by the investor community. They will work with UNEP FI towards a first set of climate-related investor disclosures in alignment with the recommendations of the Financial Stability Board’s (FSB) Task Force on Climate-Related Financial Disclosures (TCFD).

The investors joining the group are Addenda Capital, Aviva, Caisse de Dépôt et Placement du Québec, Desjardins Group, La Française Group, Nordea Investment Management, Norges Bank Investment Management, Rockefeller Asset Management, and Storebrand Asset Management.

“The message from these investment leaders is clear – climate change is real and it is the single largest threat to our economy,” said UN Environment Head, Erik Solheim. “At the same time, there are endless business opportunities in climate action. Transparency on how investors mitigate the risks and seize the opportunities of a climate-compatible pathway is crucial to move international markets towards actively supporting a low-carbon and climate-resilient future.”

The outputs and conclusions of this group will encourage and ease the adoption of the TCFD’s recommendations by the wider industry. The group will also closely coordinate with, and make its insights and outputs available to, the bigger networks of climate-savvy investors such as the Principles for Responsible Investment and the Institutional Investor Group on Climate Change whose new Investor Practices Programme is structured around the TCFD recommendations. It will also support and inform the global Investor Agenda through which the global investor community will display its ambition and determination to act on climate change.

Michael Bloomberg, Chair of the Task Force and newly appointed UN Special Envoy for Climate Action said, “The more information investors have about the climate risks and opportunities facing companies, the smarter decisions they will be able to make, and the more efficient our markets will become.” He continued, “This investor-led working group is an important step in that direction, and it’s great to see that it’s consistent with our Task Force’s recommendations”.

The initiative follows a pilot project with 16 of UNEP FI’s banking members, launched in 2017 and also convened and facilitated by UNEP FI, that will conclude its work and deliver its outputs in the second quarter of 2018. UNEP FI will also be working with a group of its members who are signatories to the Principles for Sustainable Insurance on a project piloting the recommendations for insurance companies. More information on this ground-breaking project will be available soon.

Read the full press release here.

Find out more about the pilot project for investors here.

Find out more about the pilot project for banks here.

Christiana Figueres challenges UNEP FI’s banking members and wider industry to cut high-carbon investing

10 November 2017

Former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), Christiana Figueres, laid down a challenge to the banking industry during UNEP FI’s recent Europe Roundtable when she joined as a surprise guest via live video conference.

Christiana, who was one of the architects of the Paris Agreement reached at COP21 in 2015, reminded everyone present that, “We have run out of time for anybody at the table to have a you-first attitude”. She emphasized that “by 2020 we have to be able to demonstrate that the world has reached a climate turning point, that we have reverted the tendency of increasing our emissions, to a tendency of decreasing our emissions”. To achieve this, and avoid a 2 degrees scenario, she urged banks to invest a ratio of 2:1 in favour of low-carbon investments over high-carbon investments, with high-carbon ones to be rapidly phased out, and to reach this goal by September 2018 when leaders from governments, cities and businesses around the world meet at the Global Climate Action Summit in San Francisco, USA.

She also encouraged banks to look at creating principles for sustainable banking – an option which UNEP FI banking members will be considering as part of a project already underway: a review of the UNEP FI Statement of Commitment.

Watch Christiana’s pre-recorded message, filmed ahead of the conference in the video below.

Read more about the highlights from the Europe Roundtable here.

UPDATED: 16 UNEP FI Member Banks Representing Many Trillions of Dollars are First in Industry to Jointly Pilot the TCFD Recommendations

11 July 2017

31 October, 2017: Update – 16 banks now form the UNEP FI TCFD pilot project.

11 July, 2017

Eleven of the world’s leading banks announced on 11 July, 2017 that they will work together with UNEP FI to develop analytical tools and indicators to strengthen their assessment and disclosure of climate-related risks and opportunities.

Following the late June publication of the final recommendations by the Financial Stability Board’s (FSB) Task Force on Climate-Related Financial Disclosures (TCFD), the banks not only welcome the recommendations but have also declared their intention to jointly pioneer practical approaches to implementing this ground-breaking, forward-looking framework. Increasing the amount of reliable information on financial institutions’ exposure to climate-related risks and opportunities will strengthen the stability of the financial system, and facilitate financing the transition to a more stable and sustainable economy.

Representing over $ 7 trillion, the TCFD pilot group includes the following UNEP FI banking members: ANZ, Barclays, Bradesco, Citi, Itaú, National Australia Bank, Royal Bank of Canada, Santander, Standard Chartered, TD Bank Group and UBS. As part of this UNEP FI-led project, the banks will work together to assess how they can best adopt key elements of the Mark Carney – Michael Bloomberg Task Force recommendations, which were submitted to the G20 in early July.

“The message from financial heavyweights is clear – climate change poses a real and serious threat to our economy,” said Head of UN Environment, Erik Solheim. “At the same time, there are enormous business opportunities in taking climate action. Transparency on how financial institutions mitigate the risks and seize the opportunities of a two degrees pathway is crucial to move international markets towards actively supporting a low-carbon and climate-resilient future.”

The recommendations are welcomed by financial institutions and civil society alike, as the role of the finance sector in meeting the Paris Climate Agreement’s goals becomes increasingly clear. This first mover project to implement the recommendations puts the eleven UN Environment Finance Initiative’s members in the vanguard of this effort. Its results will be made public to encourage banks worldwide to adopt the scenarios, models and approaches developed.

UPDATE: As of 31 July 2017, Norway’s DNB is twelfth leading bank to join UNEP FI’s TCFD implementation pilot project. Read more here.

UPDATE: As of 5 September 2017, Rabobank is the thirteenth leading bank to join UNEP FI’s TCFD implementation pilot project. Read more here.

UPDATE: As of 26 September 2017, BBVA is the fourteenth leading bank to join UNEP FI’s TCFD implementation pilot project. Read more here.

UPDATE: As of 17 October, 2017, at UNEP FI’s Europe Regional Roundtable, it was announced that BNP Paribas and Société Générale are joining the TCFD pilot project.

 

Read the UN Environment press release on the TCFD Pilot Project here.

Read the UN News Centre article here.

Read the ONU Brazil article here.

Read the UBS news article here.

Read the ONU Meio Ambiente note here.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

The Task Force on Climate-Related Financial Disclosures (TCFD) was set up in 2015 by the Financial Stability Board to develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders. The Task Force is mandated by Mark Carney, the Governor of the Bank of England and Chairman of the FSB, and chaired by Michael Bloomberg. The final recommendations were published in late June 2017 and submitted to the G20 in early July 2017.

Visit the TCFD website here and read the Final Recommendations Report here.

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Background Material

Read UNEP FI’s Remco Fischer on collaborating on climate disclosure in Responsible Investor’s ESG magazine here. The publication is now free to air, just register to read the magazine online.

For more information on the TCFD initiative including relevant UNEP FI reports, please view our December 2016 post here.

Read UNEP FI’s key recommendations to the Task Force from February 2017 here.

In addition, UNEP FI members have access to past webinars on the Task Force’s recommendations available on the members’ extranet.

Regional Roundtables on Sustainable Finance: Join Us in Africa & Middle East and Asia Pacific

5 September - 21 December 2017 | All Regions
 

REGIONAL ROUNDTABLES
ON SUSTAINABLE FINANCE

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UNEP FI is establishing Regional Roundtables to provide an opportunity for members and actors in the sustainable finance community to come together locally to discuss the latest trends and innovations, and share good practice. 2017 marks UNEP FI’s 25th anniversary, and in this landmark year, our first ever Regional Roundtables will be the focus of our celebrations.

Learn about UNEP FI’s 25 Years Journey Here!

Choose your region:

                       

Register now!

Region Country City Date
Latin America and the Caribbean Argentina Buenos Aires 5-6 September 2017
North America United States New York 18-20 September 2017
Europe Switzerland Geneva 16-18 October 2017
Africa and Middle East South Africa Johannesburg 27-29 November 2017
Asia Pacific Japan Tokyo 11-12 December 2017

Building on over two decades of successful Global Roundtables, these regional events are designed to create rich opportunities for UNEP FI members to connect with one another and to raise awareness of sustainable finance work in progress across banking, investment, and insurance.

Why participate?

  • Gain insights into emerging knowledge and best practice in key environmental, social and governance (ESG) areas and inspirational market leadership
  • Showcase and learn about leading-edge sustainable finance practice and the future direction of the industry
  • Get connected with leaders in sustainable finance
  • UNEP FI members will have exclusive opportunities to participate in networking activities and workshops to engage key stakeholders and collaborate on initiatives aimed at changing finance and financing change

 Who will be there?

The 2017 UNEP FI Regional Roundtables are expected to attract 100-200 sustainable finance leaders from each of the regions:

  • Financial institutions
  • Industry associations
  • Government
  • Civil society
  • Regulatory bodies
  • Academics
  • General public

Participation in the Roundtable is free of charge, but participants from across the regions are expected to cover their own travel costs.


Carbon Offset results of the Regional Roundtables

UNEP FI collaborated with Eco Act to reduce the carbon emissions generated by the 2017 Regional Roundtables and even successfully achieved carbon neutrality by offsetting 535 tCO2. The carbon offsetting project was dedicated to ‘’the Sustainable Deployment of the LifeStraw Family in rural Kenya’’ and allows to avoid around two millions GHG emissions each year. This project distributes innovative water filters to local populations, granting access to potable water and diminishing wood consumption. The program has provided access to potable water to 4.5 million people, as well as enabling them to save time and improve their health conditions. For more information read here, view UNEP FI Certificate here.


Partners & Sponsors

Media Partners

                

 

 

Green Partner

 

 

 

 

 

Partnership & Sponsorship Opportunities 

Showcase your brand at the UNEP FI Regional Roundtables – key agenda-setting events on sustainable finance in your region – bringing together hundreds of leaders from all parts of the financial system as well as from civil society, academia, government and the United Nations.

Download the following partnership brochures or contact Geneva Damayanti (geneva.damayanti@un.org) for more information on partnership opportunities.

Latin America and Caribbean (Spanish)

 

 

 

Latin America and Caribbean (English)
Europe
Africa and
Middle East
Asia Pacific

 

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19 leading global banks and investors totaling $6.6 trillion in assets launch Principles for Positive Impact Finance

30 January 2017

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Paris, 30 January 2017

Today, 19 leading global banks and investors totaling $6.6 trillion in assets, launched the Principles for Positive Impact Finance at an event in Paris.

The Principles provide guidance for financiers and investors to analyse, monitor and disclose the social, environmental and economic impacts of the financial products and services they deliver.

They provide a global framework applicable across their different business lines, including retail and wholesale lending, corporate and investment lending, and asset management.

The Principles require a holistic appraisal of positive and negative impacts on economic development, human well-being and the environment: this is what makes them innovative.

High-level representatives from the financial sector and M. Michel Sapin, French Minister for the Economy and Finance attended the launch.

Download the programme of the event here.

Read the press release in English and in French.

The Principles are part of a broader process under the Positive Impact Manifesto, launched in 2015 to call for a new, impact-based financing paradigm to bridge the gap in financing for sustainable development.

As of 30 January 2017, the Positive Impact Working Group includes: Australian Ethical, Banco Itaú, BNP Paribas, BMCE Bank of Africa, Caisse des Dépôts Group, Desjardins Group, First Rand, Hermes Investment Management, ING, Mirova, NedBank, Pax World, Piraeus Bank, SEB, Société Générale, Standard Bank, Triodos Bank, Westpac and YES Bank.

Quotes

“The Principles are a timely initiative from the finance sector. They demonstrate the willingness of financial institutions to go beyond current practices and to contribute to foster a more sustainable development,” said French Finance Minister Michel Sapin. “They should provide strengthened foundations for a positive cooperation between public and private actors in this area.”

“Achieving the Sustainable Development Goals – the global action plan to end poverty, combat climate change and protect the environment – is expected to cost $5 to 7 trillion every year through 2030,” said Eric Usher, head of the UN Environment Finance Initiative.

“The Positive Impact Principles are a game changer, which will help to channel the hundreds of trillions of dollars managed by banks and investors towards clean, low‑carbon and inclusive projects.”

“With global challenges such as climate change, population growth and resource scarcity accelerating, there is an increased urgency for the finance sector both to adapt and to help bring about the necessary changes in our economic and business models. The Principles for Positive Impact Finance provide an ambitious yet practical framework by which we can take the broader angle view we need to meet the deeply complex and interconnected challenges of our time,” said Séverin Cabannes, Deputy CEO of Société Générale, a founding member of the group.

Further information on the Positive Impact initiative is available here.

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New York State Pension Fund joins Portfolio Decarbonization Coalition

24 January 2017

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January 24, 2017

In the latest demonstration of institutional asset owners’ commitment to climate action, New York State Common Retirement Fund, the third largest public pension fund in the US with $184.5 billion in assets, has joined the Portfolio Decarbonization Coalition.

The Common Retirement Fund is the first major US pension fund to join the Coalition’s 28 members, who between them control over $3 trillion in assets and have pledged to gradually decarbonize a total of $600 billion by designing investment portfolios with a smaller climate change impact.

“Climate change is one of the greatest risks to our pension fund’s portfolio,” said Thomas DiNapoli, New York State Comptroller, and trustee of the Fund. “We’re reviewing and adjusting our investments to reduce that risk and take advantage of the growing opportunities of a lower carbon future. Investors are playing a key role in fostering a cleaner global economy. The coalition gives us the opportunity not only to highlight our own activities in this regard, but also to share insights and challenges with counterparts around the world.”

“Investments with more carbon translate to higher risk, not just from potential carbon fees or pricing, but also from shifts in technology that can leave high‑carbon assets stranded,” said Erik Solheim, Head of UN Environment. UN Environment’s Finance Initiative is a co-founder of the Portfolio Decarbonization Coalition. “The success of the Coalition is a clear signal to both governments and companies that climate change, and the corporate response to it, is critical to shareholder value and investor interests going forward,” said Solheim.

Read the press release here. The Portfolio Decarbonization Coalition is a joint initative between UN Environment and its Finance Initiative (UNEP FI), the fourth national pension fund of Sweden (AP4), Europe’s largest asset manager Amundi and CDP, the most important mechanism for climate disclosure worldwide. Visit the Portfolio Decarbonization Coalition website to find out more.

Blog: The UN, the Sustainable Insurance Forum, and the City by the Bay

7 December 2016

UNEP FI’s Butch Bacani was in San Francisco for the first meeting of the Sustainable Insurance Forum, a new international network of insurance regulators and supervisors which will promote cooperation on critical sustainable insurance challenges such as climate change. In his blog, Butch tells the story of the creation of this new initiative, explains its significance for the insurance sector, and the role of UN Environment and the Principles for Sustainable Insurance in its founding.

On 26 June 1945, the UN Charter, the United Nation’s foundational treaty, was signed in San Francisco, “The City by the Bay”. San Francisco was also the location for the launch of the Sustainable Insurance Forum for Supervisors (SIF), a groundbreaking initiative to strengthen insurance regulators’ understanding of, and responses to sustainability challenges and opportunities for the insurance business. At the beginning of December, 2016, UN Environment convened insurance regulators and supervisors from around the world at an event co-hosted with the California Department of Insurance. The SIF is a joint initiative of the Principles for Sustainable Insurance (PSI), the global framework created by UNEP Finance Initiative, and UN Environment’s Inquiry into the Design of a Sustainable Financial System (Inquiry).

The San Francisco launch of the SIF

The inaugural meeting of the SIF was held in San Francisco at the beginning of December, and was attended by insurance regulators from Brazil, California, France, Ghana, Jamaica, Morocco, the Netherlands, Singapore, and the UK, and supported by Chile, Pakistan, South Africa, the Philippines, the United Arab Emirates, and Washington State.

The event was also attended by the International Association of Insurance Supervisors (IAIS) Secretary General, Yoshihiro Kawai, who said: “I welcome the establishment of the Forum as a platform for insurance supervisors to discuss how they can support the development of an insurance industry that contributes to environmental, social and economic sustainability.”

The two-day event included sessions on sustainable insurance challenges, practices and opportunities with respect to insurance underwriting and investments, as well as responses and emerging approaches by insurance regulators to sustainability issues. The sessions benefitted from the expert insight of insurance market participants including Aon, Bahamas First General Insurance, the Insurance Association of the Caribbean, and Swiss Re; and other experts from the 2 Degrees Investing Initiative, Ceres, DLA Piper, Mercer, and Standard & Poor’s.

The San Francisco meeting approved the SIF’s 2017 work programme, which will focus on disclosure, access to insurance, sustainable insurance roadmaps, climate risk, disaster risk reduction, and capacity building for insurance regulators. The meeting also firmed up the SIF’s governance. UN Environment, through the PSI and the Inquiry, will serve as the Secretariat of the SIF.

Insurance regulators and the Principles for Sustainable Insurance 

The key role of insurance regulators in sustainable development is recognised and embedded in Principle 3 of the PSI, “to work together with governments, regulators and other key stakeholders to promote widespread action across society on environmental, social and governance issues.”

The PSI was developed through a UN-convened global consultation process in 2011, led by insurance companies and involving key stakeholders such as insurance regulators, business and industry, governments, civil society organisations, and academia. The PSI was launched at the UN Conference on Sustainable Development (Rio+20) in Rio de Janeiro in June 2012, at a global event co-hosted by the International Insurance Society and the Brazilian Insurance Confederation (CNseg). It was endorsed by UN Secretary-General Ban Ki-moon and insurance CEOs.

To demonstrate their leadership and support for the sustainable insurance agenda, a number of insurance regulators themselves have signed the PSI. They include the regulators of Brazil, Costa Rica, the Philippines, and California and Washington State in the US.

The launch of PSI at Rio +20. Credit: Gabriel Heusi

The journey to creating the Sustainable Insurance Forum

The Sustainable Insurance Forum is a culmination of the joint work of the PSI and the Inquiry over the past few years. This began with the first-ever international consultation on insurance policy, regulation and supervision and sustainable development from 2014-15. This consultation concluded with the Insurance 2030 Roundtable, which UN Environment and Swiss Re co-hosted in May 2015 in Rüschlikon, Switzerland and attended by then UN Environment Executive Director, Achim Steiner, and then UN Framework Convention on Climate Change (UNFCCC) Executive Secretary, Christiana Figueres, as well as insurance industry leaders and regulators  from around the globe.

This led to UN Environment’s global report, Insurance 2030: Harnessing insurance for sustainable development, which was launched at the UN headquarters in New York in June 2015, at the Global Insurance Forum of the International Insurance Society. UN Secretary-General Ban Ki-moon delivered the opening address. One of the key recommendations of the Insurance 2030 report was to create the SIF.

At the 7th International Insurance Conference, held in Paris in November 2015, UN Environment’s Executive Director spoke at the event to promote the initiative to create the SIF, as well as the PSI’s agenda-setting idea of developing “Insurance Development Goals” to help realise the UN’s 2030 Sustainable Development Goals.

In 2016, the process of creating the SIF was guided by a core leadership group of insurance regulators—Brazil, France, Netherlands, Philippines, South Africa, the UK, and California and Washington State in the US. This was reinforced by input from an international consultation on the proposed SIF involving regulators from more than 30 countries, in cooperation with the IAIS. The results of the consultation were presented at the IAIS meetings in Budapest last June.

The Golden Gate: Bridging insurance and sustainable development through the PSI and the SIF 

The Golden Gate is the strait that connects San Francisco Bay to the Pacific Ocean, and is spanned by the world-renowned Golden Gate Bridge. Through the PSI, UN Environment has a global, market-facing sustainability initiative for insurance companies. With the launch of the SIF, UN Environment now also has a global, policy/regulatory/supervisory-facing sustainability initiative for insurance regulators, which both spans and connects.

The collective agenda of the PSI and the SIF bridges landmark efforts by insurance companies and insurance regulators that support economic, social and environmental sustainability—in other words, sustainable development.

Watch this dynamic space evolve in 2017, and beyond.

For more information about the Sustainable Insurance Forum, read the article here. Find out more about UNEP FI’s Principles for Sustainable Insurance here.

 

Photo Credits: Top Photo – CA Dept of Insurance

Outcomes and UNEP FI perspectives and interventions: COP22 in Marrakech

4-16 November | Marrakech, Morocco

The first global climate meeting focused on implementing the historic Paris Agreement took place in Marrakech from 4 -16 November 2016. In the wake of the historic Paris Agreement reached last year, intergovernmental climate negotiators met to work out the next steps and establish a rulebook.

Remco Fischer, UNEP FI’s Climate Change Officer, was in Marrakech and has written a blog assessing the outcomes of the meetings, and summarising the events in which UNEP FI participated. Please read his blog, ‘A Tale of Two Cities’ here. For those of you who missed it, his first blog, ‘The Good, the Bad, and the Unknown’, written from Morocco at the end of the first week of events, is available here.

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