Digital library on sustainable finance
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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
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The international community set itself the goal of limiting the rise in global warming to 2°C by 2100. To reach this target, societies must rethink and transform the way they operate, especially with regard to carbon dioxide emissions. Can finance help the world rise to the challenge?
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Practitioner Roundups Special Issue: Can Finance Make the Planet Greener? - DE
Practitioner Roundups Special Issue: Can Finance Make the Planet Greener? - FR
Practitioner Roundups Special Issue: Can Finance Make the Planet Greener? - IT
Practitioner Roundups Special Issue: Can Finance Make the Planet Greener? - EN
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The new edition of the Best Practice Principles for Shareholder Voting Research & Analysis was launched in July 2019, after a two-year consultation period by the group of five firms that sponsor them.
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Best Practice Principles for Providers of Shareholder Voting Research & Analysis 2019 - EN
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This document details the key steps regarding impact analysis, target setting & implementation, and accountability a bank needs to take to ensure the effective implementation of the Principles for Responsible Banking.
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Principles for Responsible Banking: Key Steps to be Implemented - EN
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This document sets out the 6 Principles and the preamble of the Principles for Responsible Banking (PRB) .
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This briefing paper aims to help investors and banks understand how they could use Internal Carbon Pricing (ICP) in their decision-making, specifically for their investment and lending practices.
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This document is a technical supplement to the April 2019 NGFS Comprehensive report. The supplement provides an overview of existing approaches for quantitatively assessing climate-related risks and identifies key areas for further research. It also sets out a menu of options for central banks and supervisors to assess the risks.
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Macroeconomic and financial stability: Implications of climate change - EN
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In the 2019 edition of the Swiss Sustainable Investment Market Study, SSF provides in-depth insights into recent market developments. The study reveals a sharp increase in the total volume of sustainable investments, again highlighting the growing importance of sustainability in the Swiss financial industry.
The full report is available in English and summaries in German and French.
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Swiss Sustainable Investment Market Study 2019 - DE
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The Official Monetary and Financial Institutions Forum (OMFIF) publishes several reports a year, covering key themes in current economic and financial issues. In this edition, OMFIF discusses the increasing attention that Central Banks are giving to climate change.
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This handbook brings together in one publication a series of impact reporting frameworks for eligible green categories covering several sectors, released since 2017: Sustainable Water and Wastewater Management Projects, Sustainable Waste Management and Resource-Efficiency Projects, Clean Transportation Projects and Green Building Projects.
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Since the original publication of the Green Bond Principles (GBP), and the subsequent releases of the Social Bond Principles (SBP) and Sustainability Bond Guidelines (SBG), market participants have sought additional information on how to interpret these principles especially for its practical application for transactions, as well as in the context of market developments and complementary initiatives.
In order to further enhance the accessibility of information on these topics, a compendium of the Q&A in a “Guidance Handbook” has been published, organised thematically around 5 sections: Fundamentals, Governance & Membership, Core Components of the GBP/SBP, Market and Technical Issues and Other Market and Official Sector Initiatives. .
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The ninth edition of the Annual Impact Investor Survey demonstrates the increasing scale and maturity of the impact investing industry. The report draws on responses from 266 leading impact investing organizations from around the world, including: fund managers, foundations, banks, development finance institutions, family offices, permanent investment companies, pension funds, and others. These respondents collectively manage USD 239 billion, a subset of the total USD 502 billion in the market.
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On 18 June 2019, the Technical Expert Group (TEG) published the Technical report on EU taxonomy. The report sets out the basis for a future EU taxonomy in legislation. The report contains:
- technical screening criteria for 67 activities across 8 sectors that can make a substantial contribution to climate change mitigation;
- a methodology and worked examples for evaluating substantial contribution to climate change adaptation;
- guidance and case studies for investors preparing to use the taxonomy.
In addition to its Technical report, the TEG has also published a supplementary report on using the taxonomy. This provides investors and companies with a concise and clear explanation of why the taxonomy is needed, what it looks like, and its ease of use.
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On 18 June 2019, the Technical Expert Group (TEG) published its Report on EU Green Bond Standard. The TEG proposes that the Commission creates a voluntary, non-legislative EU Green Bond Standard to enhance the effectiveness, transparency, comparability and credibility of the green bond market and to encourage the market participants to issue and invest in EU green bonds. The proposal builds on best market practices.
A two-pager summarising its key recommendations is also available.
Building on the recommendations of the June 2019 report, the TEG published a usability guide for the EU Green Bond Standard in March 2020.
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In June 2019, the European Commission published new guidelines on corporate climate-related information reporting, which provide companies with practical recommendations on how to better report the impact that their activities are having on the climate as well as the impact of climate change on their business. They are a supplement to the general guidelines on non-financial reporting published in 2017, which are still applicable.
The new guidelines integrate the recommendations of the Financial stability board's taskforce on climate-related financial disclosures (TCFD) and take account of the forthcoming taxonomy on sustainable activities that is under development. A summary of the guidelines is available here.
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This study provides responsible investors with insights on current key sustainability trends and challenges that companies in the Housing Sector are facing. Furthermore, it presents solutions that several businesses, from the eleven different housing sub-sectors, may offer to help solve global social and environmental problems. These issues are important both for ethical investors as well as investors who deliberately manage ESG-related investments risks and opportunities.
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This best practice report contains guidance on ESG integration in equity and fixed income investments and case studies on how ESG integration is “done” by leading practitioners.
This report focuses on the current state of ESG integration in the APAC region. Other regional reports focus on the Americas and the EMEA region.
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ESG integration in Asia Pacific: markets, practices and data - EN
