Digital library on sustainable finance
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This report looks at whether ESG factors add to, detract from, or have no effect on financial return for Emerging Market (EM) equities. Based on a decade of historical data, the authors analyse the risk/return profile of the Candriam ESG Emerging Markets universe.
The study found that over the period with sufficient testable historical data, an approach combining governance, controversy risk analysis and exposure to sustainability themes enhanced investment performance in emerging markets equities in ten out of eleven years (April 2008 through October 2018).
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The Impact of ESG Investing in Emerging Market Equities - EN
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The "IFZ Sustainable Investments Study 2019. Nachhaltige Bonds und nachhaltige Fonds" conducted by the Lucerne University of Applied Sciences and Arts assess the offering of sustainable mutual funds in the Swiss fund market for the third year in a row.
According to the study, the assets of sustainable mutual funds in Switzerland have risen by 22 percent to CHF 196 billion and counting 582 sustainable funds over the past year, while conventional mutual funds declined slightly over the same period. The report contains an overview of the largest sustainable funds in Switzerland.
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Achieving the United Nations Sustainable Development Goals (SDGs) will require at least an extra $2.5 trillion a year, between 2015 and 2030. In order to bridge this investment gap, investment vehicles with an ESG or SDG dimension will play an important role. One vehicle that offers this potential is ESG ETFs — exchange traded funds (ETFs) based on corporate environmental, social and governance (ESG) factors.
This report, released by UNCTAD in cooperation with Conser and TrackInsight, aims to provide an overview of the ESG ETF landscape, examine the main drivers behind the rapid rise of ESG ETFs in recent years and discuss possible actions that can be taken by key stakeholders to grow ESG ETFs into a mass market financial vehicle for sustainable development.
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Leveraging the Potential of ESG ETFs for Sustainable Development - EN
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This legal opinion commissioned by the Swiss Federal Office for the Envrionment (FOEN) shows that material climate risks already have to be taken into account to a large extent in current law. On a voluntary basis, climate impacts resulting from investment and financing decisions can also be measured and reported.
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Gutachten_Eggen_Stengel_11.11.2019 (pdf 513.8 kB)Summary
This report by climate-change think tank InfluenceMap analyses the world’s 15 largest investment institutions, with $37 trillion in assets under management, and found that they are collectively deviating from the “Paris-aligned” allocations needed to reach the Paris Agreement goal of stopping global temperatures rising by 2°C. The report found $8.2 trillion invested in four top-polluting industries: oil and gas, coal mining, automobiles and electric power. While the Paris-misalignment of oil & gas should not come as a surprise, widely held automative and electric utilities sectors remain seriously out of line on climate.
Increasingly, forceful engagement with companies in these sectors must occur if the finance sector wishes to align its portfolios with Paris Agreement. However, the study found that investor-company engagement is often opaque and ill-defined. Only three big firms ― UBS Asset Management, Allianz and Legal & General ― “strongly and consistently engage with the companies they invest in to align their business models with Paris targets.”
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FinanceMap_Report_Nov_2019_Final (pdf 3.1 MB)Summary
This paper reviews the evolution of private-sector development finance in Switzerland from 2010 to 2018. It analyzes the contribution of Swiss managers specialized in impact investing towards the financing of Sustainable Development Goals (SDGs), focusing on the historical growth of their assets under management and the variety of products on offer.
The report is a follow up to the Swiss Microfinance Investments Report 2015 published by Symbiotics.
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This first-ever global insurance industry guide highlights the increasingly important role that the industry needs to play in protecting World Heritage Sites.
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Protecting our World Heritage, Insuring a Sustainable Future - EN
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This paper provides guidance for banks and other financial institutions to implement the recommendations of the OECD Guidelines for Multinational Enterprises in the context of their corporate lending and securities underwriting activities. Specifically, this paper explains what due diligence for responsible business conduct entails, and provides practical considerations for banks at each step of the due diligence process. This paper may also be helpful to other stakeholders seeking to understand due diligence approaches of banks.
The paper was developed in close consultation with leading global banks, civil society and trade unions, and approved by 48 governments.
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Due Diligence for Responsible Corporate Lending and Securities Underwriting - EN
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This is the final report of the UN PRI's "Fiduciary Duty in the 21st Century" programme, which intended to clarify investor obligations and duties (fiduciary duties) in relation to the integration of ESG issues.
The report affirms that fiduciary duty requires the incorporation of ESG issues into investment analysis and decision-making processes. It describes how this integration of ESG issues is an increasingly standard part of the regulatory and legal requirements for institutional investors, along with requirements to consider the sustainability-related preferences of their clients and beneficiaries, and to report on how these obligations have been implemented.
The report also identifies areas where further work is required and reflects on how investors’ duties and obligations may further evolve over time.
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The IOPS Supervisory guidelines on the integration of ESG factors in the investment and risk management of pension funds highlight a range of challenges to be met by pension funds governing bodies, asset managers and pension supervisors.
The guidelines provide guidance and propose a number of actions to be taken by pension supervisory authorities, intending to help pensions supervisors to oversee pension funds more effectively by integrating ESG factors. While they are non-binding, the IOPS encourages supervisory authorities to voluntarily adopt and implement the guidelines.
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This guide is a hands-on approach aimed at central banks that wish to adopt Sustainable and Responsible Investment (SRI) practices. It builds on the results of an SRI portfolio management survey among NGFS members and concludes with case studies of first-hand experiences by some NGFS members.
Among the five SRI strategies identified in the guide, the most prominent are green bond investments and negative screening for equity and corporate bond holdings.The survey shows that there is a growing momentum among NGFS members: 25 out of the 27 respondents have already adopted SRI principles in their investment approach or are planning to do so. Those principles range from a broad scope of environmental, social, and governance (ESG) considerations to a climate-specific focus. As the mandates and status of central banks differ, the guide does not offer a one-size-fits-all solution, but discusses potential SRI approaches and ways to implement them, allowing central banks to account for their own specific challenges.
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A sustainable and responsible investment guide for central banks’ portfolio management - EN
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The 2019 edition of the CS Gender 3000 report looks at the link between gender diversity and superior company performance and how this is evolving over time, analyzing 3000 companies across 56 countries.
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CS-gender-3000-in-2019 (pdf 1.2 MB)Summary
As global efforts to channel more private sector investment towards sustainable development ramp up, one key barrier has been the sheer proliferation of terms referring to “sustainable investment.” In a 2019 survey, the IIF Sustainable Finance Working Group (SFWG) polled member firms on their views. A significant majority agreed that industry alignment around simplifying terminology and product names into a few broad categories could greatly advance the goal of scaling up sustainable finance.
To help drive progress towards this goal, this short note sets out the case for simplification and proposes three such categories as a starting point for discussion: “Exclusion,” “Inclusion,” and “Impactful,” leaving “Philanthropic” as a separate category distinct from sustainable investment.
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Die Schweiz hat das Pariser Übereinkommen am 6. Oktober 2017 ratifiziert und sich damit unter anderem verpflichtet, ihre Finanzflüsse klimaverträglich auszurichten. Um die Erarbeitung und Diskussion entsprechender Massnahmen auf eine solide Basis stellen zu können, beauftragte das BAFU die beiden Gutachterinnen im Juli 2019 mit der Erstellung des vorliegenden Rechtsgutachtens zu den Grundlagen. Das Gutachten beantwortet insbesondere die folgenden Fragen: 1) Inwiefern sind die verschiedenen Finanzmarktakteure unter dem geltenden schweizerischen Recht verpflichtet, Klimarisiken und -wirkungen bei ihrer Tätigkeit zu berücksichtigen? 2) Mit welchen regulatorischen Instrumenten kann die Rechtssicherheit für schweizerische Finanzmarktakteure erhöht werden?
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Based on interviews with 14 proactive insurers, this report explores how climate awareness is being integrated into underwriting, investment, and group-wide risk management practices. In addition to exploring common barriers, this report also presents a practical framework of eight building blocks relevant for insurers introducing and developing climate strategies.
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The Climate Finance Leadership Initiative (CFLI) was launched in January 2019 in order to accelerate private sector investment for climate solutions. The seven founder members have published this report “Financing the Low-Carbon Future” which examines the challenges and potential solutions to delivering the necessary financing for a sustainable low-carbon economy.
The report highlights five factors that are hampering progress:
- Proven investment models are not replicated at scale.
- Risks in emerging markets constrain low-carbon investments.
- Many low-carbon investments in key emitting sectors are not yet profitable.
- The transition from carbon-intensive business models may create financial and social risk.
- There is a lack of tools and incentives to align portfolios with a low-carbon future.
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Financing the Low-Carbon Future (pdf 9.4 MB)Summary
A forceful policy response to climate change is not priced into today’s markets. Yet it is inevitable that governments will be forced to act more decisively than they have so far, leaving investor portfolios exposed to significant risk. The longer the delay, the more disorderly, disruptive and abrupt the policy will inevitably be.
In anticipation, PRI, Vivid Economics and ETA are building a landmark forecast of the financial impact of this Inevitable Policy Response (IPR), including a Forecast Policy Scenario:
- How will it affect the economy?
- Which asset classes will be impacted?
- Which sectors are most at risk?
A summary of the report can be accessed here. The project is a collaboration between the PRI, Vivid Economics and Energy Transition Advisors, with contributions from 2° Investing Initiative, Carbon Tracker and the Grantham Research Institute on Climate Change and the Environment.
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Forecast Policy Scenario (FPS) models the impact of the forecasted policies on the real economy up to 2050, tracing detailed effects on all emitting sectors, including changes to energy demand (oil, gas, coal), transport, food prices, crop yields, and rates of deforestation.
A summary of this report can be accessed here. The Inevitable Policy Response (IPR) project project is a collaboration between the PRI, Vivid Economics and Energy Transition Advisors, with contributions from 2° Investing Initiative, Carbon Tracker and the Grantham Research Institute on Climate Change and the Environment.
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Users of the capital markets, the world over, are now highly alert to environmental and social issues, with around 60% of both issuers and investors saying environmental and social issues are ‘very important’.
The findings come from HSBC’s Sustainable Financing and Investing Survey 2019, a poll of 500 investors and 500 issuers from the Americas, Asia, Europe and the Middle East.
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HSBC Sustainable Financing and Investing Survey 2019-komprimiert (pdf 4.2 MB)Summary
On 30 September 2019, the TEG published its final report on Climate Benchmarks and Benchmarks’ ESG Disclosures.
The final report recommends a list of minimum technical requirements for the methodologies of ‘EU Climate Transition’ and ‘EU Paris-aligned’ benchmarks, with the objective to address the risk of greenwashing. The report also recommends a set of Environmental, Social and Governance (ESG) disclosure requirements, including the standard format to be used for the reporting. Those aim to improve transparency and comparability of information across all benchmarks.
A 2-pager that summarises the key aspects of the final report is also available.
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Final Report on Climate Benchmarks and Benchmarks' ESG Disclosures - EN
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This paper investigates the divergence of environmental, social, and governance (ESG) ratings between five prominent rating agencies. The paper traces the disagreement of ESG categories and decomposes the overall divergence into three sources: Scope divergence related to the selection of different sets of categories, measurement divergence related to different assessment of ESG categories, and weight divergence related to the relative importance of categories in the computation of the aggregate ESG score.
The authors find that measurement divergence explains more than 50 percent of the overall divergence. Scope and weight divergence together are slightly less important. The results allow investors, companies, and researchers to understand why ESG ratings differ.
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This study by Vontobel Asset Management commissioned a survey of 4,600 people in 14 countries to find out what they think about sustainable investing. The survey found that although investors follow sustainable principles in their daily lives, their awareness of sustainable investment opportunities remains limited.
Regional case studies for DACH, Germany, Italy, Spain, Switzerland and the United Kingdom can be accessed here (scroll down).
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Based on a survey conducted among asset managers operating in Switzerland, the IFZ/AMP Asset Management Study 2019 provides an overview of the scope and breadth of the Swiss asset management industry, capturing the facts, current industry dynamics as well as the most important challenges and opportunities faced by Swiss-based asset managers. Moreover, in the context of a PEST analysis, the political, economic, social, and technological environment is analyzed with the aim to highlight the most important developments affecting the industry.
Among other findings, the analysis showed that Swiss-based asset managers see large opportunities in sustainable investments .
An executive summary can be download in German and French.
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This UK strategy recognises the role of the financial sector in delivering global and domestic climate and environmental objectives. It sets out the proposals for green finance at the heart of delivering the UK’s Clean Growth Strategy, 25 Year Environment Plan and Industrial Strategy, and how the proposals support the UK’s economic policy for strong, sustainable and balanced growth
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In dieser Studie hat der WWF Österreich gemeinsam mit der Ratingagentur ESG Plus die zehn größten österreichischen Retailbanken untersucht. Unternehmensführung, Sparen und Anlagen sowie Kredite und Finanzierungen wurden auf konkrete Aktivitäten im Bereich Nachhaltigkeit analysiert und bewertet. Das Ergebnis zeigt, dass den 10 größten Akteuren des österreichischen Bankwesens eine klare Vision fehlt, um eine sichere und erstrebenswerte Zukunft für Österreich und den Planeten mitzugestalten.
Eine Kurzfassung der Studie finden Sie hier, die Vollversion kann via untenstehendem Link geöffnet werden.
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WWF Rating des Österreichischen Retailbankings 2018/2019 - DE
