Digital library on sustainable finance
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This report from Clarity AI looks at the implications of ESMA’s new rule restricting the use of ESG and sustainability-related terms in the funds’ names, which suggest that over 44% of funds may need to adjust their name.
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Study: Implications of ESMA's New Guidelines on Fund Names - EN
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This working paper examines the potential of European institutional investors to meet emerging markets and developing economy (EMDE) investment needs, focusing on the largest insurance companies and pension funds (ICPFs) in France, Germany, the Netherlands, Switzerland, and the United Kingdom, which collectively manage $17.56 trillion in assets. It assesses the mobilisation potential across changes in stakeholder expectations, financial market conditions, and legal and regulatory frameworks.
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In the present report, submitted to the Human Rights Council pursuant to Council resolutions 17/4 and 53/3, the Working Group on the issue of human rights and transnational corporations and other business enterprises clarifies the responsibilities of investors with regard to respecting human rights under the Guiding Principles on Business and Human Rights. It also outlines how investors can align the environmental, social and governance, and sustainability, approaches they take with their responsibilities under the Guiding Principles.
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A/HRC/56/55: Investors, environmental, social and governance approaches and human rights - EN
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This first edition of the Swiss Sustainable Lending Market Study provides in-depth insights about current practices in taking ESG factors into account in the lending business in Switzerland. This publication aims to provide a comprehensive overview of the lending market by making available self-reported data on current market practices and the application of sustainable financing approaches, thereby providing transparency to both the financial sector and the broader public.
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This study examines sustainable finance literacy among Swiss households by surveying a large sample. Sustainable finance literacy is defined as the ability to assess financial products based on their sustainability-related attributes. Multiple-choice questions are employed for measurement, along with open-ended questions to gauge awareness among private investors. Despite Switzerland's high financial literacy, households demonstrate low levels of sustainable finance literacy. However, knowledge in this area positively correlates with ownership of sustainable products. The findings underscore the importance of transparent regulations and increased awareness campaigns for sustainable financial products.
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Sustainable finance literacy and the determinants of sustainable investing - EN
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The Glasgow Financial Alliance for Net Zero (GFANZ) estimates that USD 3.2 trillion is needed annually to stop global warming. Private investments are crucial to fill this gap, but they often lack profitability, particularly in developing countries. Blended finance has the potential to leverage public capital and attract private investments, but it must become more scalable. This discussion paper does not provide a detailed examination of individual products or specific regulatory proposals. Instead, it highlights the necessity for private capital, the potential of mixed financing structures, and existing obstacles.
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The Swiss financial sector significantly contributes to the country’s economy, making up 9.1% of Switzerland's GDP in 2023. It maintains strong global connections, with Swiss banks playing a crucial role in financial services. Additionally, insurers, the stock exchange, and emerging areas like sustainability, blockchain, and fintech contribute to the sector’s adaptability and innovation.
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Swiss Financial Sector - Key Figures 2024 - DE
Swiss Financial Sector - Key Figures 2024 - FR
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The authors investigate more than 1,000 investment funds that are classified under Article 9 of the EU Sustainable Finance Disclosure Regulation (SFDR). Using the G7’s new typology of sustainable
investments, we show that Article 9 funds pursue varying degrees of ambition: while 60 % follow an impact-oriented strategy, we identify 40 % that instead pursue a general Environment, Social, and Governance (ESG) strategy. We do not find significant differences in ESG scores between ESG-related and impact-related funds. Yet, impact-related funds have higher SDG impact scores and
higher management fees. Downgraded funds that changed SFDR status, however, tend to be less
focused on impact.
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The biodiversity crisis, alongside the climate crisis, threatens Earth's life-support systems and human well-being. Significant financial investment is essential to halt and reverse biodiversity loss, with resources applied effectively. WWF Switzerland and The Biodiversity Consultancy developed this Biodiversity Impact Assessment Framework (BIAF) to evaluate investment impacts on biodiversity. BIAF assesses biodiversity through extent, condition, and significance, addressing drivers of biodiversity loss. Pilot applications show promising results for decision-making, with further development needed for automation and uncertainty representation.
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Impact investing – i.e., investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return – attracts growing interest from investors. It is, thus, important for the sustainable finance work of ESMA and forms part of a specific workstream on greenwashing, as impact investing – while essential for progressing on the EU’s sustainability objectives – may be prone to misleading, inaccurate or unsubstantiated claims. Impact investing – and ESG investing overall – have a key role to play in achieving sustainability objectives, thus the topic requires particular attention to ensure that products and strategies that aim to foster such objectives stand true to their claims. Impact claims are often based on well-known sustainability frameworks, including the United Nations Sustainable Development Goals (SDGs), which are a significant pillar of the international development agenda. Here specifically, these impact claims suggest a positive contribution to the fulfilment of the SDGs. Their achievement requires substantial financial resources, which can, at least partly, be sourced from private sector actors through the issuance of dedicated financial products. Increasing investor appetite for sustainable financial products has boosted the growth of investment funds claiming to contribute to achieving the SDGs (SDG funds). This article proposes and summarises a methodological approach towards identifying SDG funds and assessing the extent to which their holdings align with their claims by bringing together a unique set of different data sources. Our results highlight some of the challenges in assessing real-world impact claims and show that SDG funds do not significantly differ from non-SDG counterparts or ESG peers regarding their alignment with the United Nations SDGs. This raises questions as to whether funds claiming to contribute to the SDGs are actually fulfilling their promise to investors.
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The purpose of this paper is to present a new methodology for market studies on sustainability-related investments. The paper is based on an earlier white paper by the University of Hamburg and Eurosif (Busch et al. 2022). The updated methodology was developed by Eurosif’s SRI Study Group (SSG) in cooperation with the University of Hamburg, the Sustainable Finance Research Group (SFRG) and Advanced Impact Research (AIR). Over the course of 2023, feedback from both SSG members and other practitioners was taken into account to make the methodology practicable.
Past market studies on sustainability-related investments typically gathered data on a range of different sustainability-related investment approaches and aggregated them to one of a number of “sustainable investments”. However, these statistics did not differentiate between investments based on their investment strategy and/or objectives to actively support the transition towards a more sustainable economy.
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2024.02.15 Final Report Eurosif Classification_2024 (pdf 416.3 kB)Summary
Im Sommer 2023 hat der Schweizer Verein für verantwortungsbewusste Kapitalanlagen (SVVK) die Anbieter von Immobilienfonds über ihren Weg zu Netto-Null befragt. Die daraus resultierenden Ergebnisse zeigen, wo der grösste Handlungsbedarf besteht.
In der Schweiz stammen rund 30% der inländischen CO2-Emissionen aus dem Immobiliensektor. Um die Schweizer Klimaziele zu erreichen, spielen Immobilien daher eine zentrale Rolle. Als bedeutende Investoren im Schweizer Immobilienmarkt haben sich die Mitglieder des SVVK entschieden, den aktuellen Stand der Klimaanstrengungen bei den Anbietern von indirekten Immobilienanlagen zu erheben.
Die Ergebnisse der Umfrage, an der 22 Fondsanbieter teilgenommen haben, zeigen, dass im Schweizer Immobiliensektor mittlerweile ein Bewusstsein für die Thematik vorhanden ist: Alle befragten Fonds haben mit der Datenerhebung begonnen. Die Transparenz zur Beurteilung der tatsächlichen Fortschritte ist jedoch noch nicht ausreichend. Zwar veröffentlichen immer mehr Immobilienfonds Klima- oder Nachhaltigkeitsberichte, was erfreulich ist. Diese weisen jedoch grosse Unterschiede in Qualität und Tiefe auf.
Auch bei der konkreten Umsetzung von Massnahmen der strategisch definierten Absenkziele sind die Anbieter von Immobilienfonds noch sehr unterschiedlich weit. Die Qualität der entwickelten Umsetzungspläne lässt sich nur schwer überprüfen. Wichtig ist, dass die Fondsanbieter ihre Ziele zur Reduktion von Klimaemissionen mit konkreten Massnahmen verknüpfen, damit diese nachvollzogen und verifiziert werden können.
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Indirekte Immobilienanlagen auf dem Weg zu Netto-Null: Stand und Aktivitäten - DE
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The market for carbon management and sustainability software solutions is constantly changing and is characterised by new start-ups, M&A activities and portfolio expansions by established providers. Legal regulations and new customer requirements are causing companies to continuously expand their product portfolio and place new solutions on the market. As a result, there are more solutions than companies, which which is reflected in the following market overview.
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Financial services providers play a key role in channelling capital to - or ensuring the risks of - companies that are actively facilitating the transition to a more sustainable economy. At the same time, sustainability topics are increasingly on their strategic agenda. Over the past years, many of them have sought to integrate sustainability into their operations, reviewed their investment portfolios from a sustainability perspective and offer their clients products with a sustainability angle (e.g. funds, loans or insurance products).
This report explores how sustainability considerations and practices are incorporated into mergers and acquisitions (M&A) in the financial services industry. It focuses on larger players headquartered in Switzerland and Liechtenstein – highlighting the current market status and providing insights into where the market is expected to shift.
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The Flying Blind series reports analyse whether companies and their auditors are assessing the financial impacts of climate and energy transition matters and reflecting these impacts in financial statements today. This year’s report will be published in four parts. The first, this Overview, discusses the overall results of our assessments and common themes. Management, investors, market regulators, policymakers and standard-setters can reference and use this report in the face of growing risks and company strategies. The basis for this work has not changed; accounting and auditing standard-setters are clear that climate and energy transition risks should be considered today
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The European Sustainable Finance Action Plan marked its 5th anniversary in 2023. Since its publication in 2018, the Action Plan reshaped the European sustainable finance. It has also substantially impacted the European and global sustainable finance debate.
As this book goes to publication, the Action Plan's four key regulations are now all in force. The sustainable finance market is also in the process of reaching a new level of maturity in tackling greenwashing. The new European regulatory architecture for sustainable finance is getting closer and closer to its conceptual completion.
The book offers an in-depth overview of this new emerging field of European law. It starts with a discussion of the purpose and underlying principles of the new European regulatory framework for sustainable finance, proceeds with an analysis of the four key regulations that have emerged out of the Action Plan's legislative agenda and closes with a section on tackling greenwashing.
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The TPT Asset Managers Sector Guidance adds further depth and detail for preparers of transition plans that are operating in the Asset Management sector.
The Guidance is open for consultation until 29th Dec 2023
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Transition Plan Taskforce: Asset Managers Sector Guidance - EN
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The Global Sustainable Investment Alliance (GSIA) has today published its sixth edition of the biennial Global Sustainable Investment Review (GSIR), sponsored by HSBC Global Research, finding that US$30.3 trillion is invested in sustainable assets globally.
The report shows that in non-US markets – Canada, Europe, Japan, Australia and New Zealand – there has been a 20% increase in sustainable assets under management (AUM) since the 2020 GSIR.
The report also showcases a maturing of the industry, which includes the adoption of tighter definitions of when a fund can be described as ‘sustainable’. These newly imposed standards were a direct response to growing concerns around ‘greenwashing’ and thus impacted how the US SIF has measured ‘sustainable assets’ in the period to 2022. As a result of the US SIF’s methodology change, the report finds a drop from $17tn in reported AUM in the United States in 2020 to $8.4tn in 2022.
Similarly, in Europe, the long-term trend suggests that the proportion of assets defined as ‘sustainable’ has been declining by around 5% per year. Increased requirements around disclosure regulations and the tightening of definitions around sustainable investing and its related approaches may be contributing to this decline.
A wider trend is also emerging globally highlighting the need for clearer definitions and a more shared understanding around what makes a sustainable asset ‘sustainable’. Further developments can be expected in the years to come, as the EU’s Sustainable Financial Disclosures Regulation (SFDR) continues to evolve, alongside other global disclosure and labelling approaches, and as data availability and quality increases.
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This document is a paper that responds to questions from number of G20-member governments about how addressing nature-related data challenges could enable and accelerate the uptake of corporate reporting and target-setting by business and finance, in line with Target 15 of the Global Biodiversity Framework.
Key focus areas
- An outline of nature-related data needs to respond to key nature data challenges
- An overview of solutions to nature-related data challenges: the case for a global nature-related public data facility
Key outcomes
- Providing global solutions to nature-related data challenges to enable and accelerate uptake of corporate reporting and target-setting by business and finance
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This document provides draft core sector disclosure metrics for the following sectors:
- Apparel and textiles
- Construction materials
- Infrastructure
- Real estate
Key focus areas
The discussion paper presents:
- Proposed guidance on how to apply the TNFD core global disclosure metrics in each sector, where relevant
- Proposed core sector disclosure metrics
- Proposed additional sector disclosure metrics
Key outcomes
- Enable disclosure at sector level
- Support financial institutions in comparing across organisations within that sector, who often face common nature-related issues
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This document is a discussion paper on how organisations can approach the analysis of their upstream and downstream value chains. It includes discussion of when it is appropriate to seek full traceability, and where use of secondary data may be an acceptable alternative to the direct measurement of dependencies and impacts.
Key focus areas
- Outline of value chain characteristics that can create challenges assessing nature-related issues
- How organisations can approach these issues using the LEAP approach
- An overview of data needs for assessing value chains and how to address them
- How related disclosure frameworks and standards approach value chains
Key outcomes
- An understanding of TNFD’s approach to assessment of nature-related issues along value chains
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This document is a discussion paper that outlines approaches to advanced scenario analysis. It builds on the TNFD’s foundational guidance on scenario analysis. It is primarily intended for experienced users of scenarios in financial institutions and large multinational companies interested in advanced nature scenario methods. This may include those taking action in anticipation of regulatory stress testing, as has occurred with climate-related risk assessment.
Key focus areas
- A comprehensive overview of three phases of scenario development, tailored for advanced assessments
- Practical step-by-step outline of the implementation of each phase
- Examples of scenario development and application for different use cases using the IPR FPS + Nature approach as an illustration
- Overview of recommendations and guidance on nature-related scenario in frameworks and standards
Key outcomes
- Stimulate feedback to the TNFD on the development of guidance on advanced scenarios.
- Enable financial institutions and large corporates to use advanced scenarios to explore implications of uncertainties, assess risks, set targets and transition plans and test the resilience of their strategies.
- Support action by financial institutions in anticipation of regulatory stress testing on nature-related risks, as has occurred with climate-related risk assessment.
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Discussion paper on conducting advanced scenario analysis - EN
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This document is a discussion paper that presents an overview of the current landscape of biodiversity footprinting approaches, including their limitations and sets out six steps to help market participants select and disclose these approaches appropriate for their requirements.
TNFD developed this paper in partnership with the Partnership for Biodiversity Accounting Financials (PBAF). It builds on the significant work on biodiversity footprinting of PBAF, the Align project, the Finance for Biodiversity Foundation and others to help companies and financial institutions make informed decisions on where to start and the approaches to use as they navigate this area.
Key focus area
- A definition of biodiversity footprinting
- An overview of the current landscape of footprinting approaches
- Summary of the limitations of existing approaches to footprinting
- Six steps to help market participants select and disclose biodiversity footprinting approaches appropriate for their requirements
Key outcomes
- Inform the ongoing development of the TNFD’s measurement architecture
- Assess the decision utility of biodiversity footprinting methodologies to help market participants
- Present draft guidance on biodiversity footprinting approaches for market feedback
- Stimulate further innovation by developers and data providers in nature-related methodologies, tools and analytics
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Discussion paper on biodiversity footprinting approaches for financial institutions - EN
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This short pamphlet by NatureFinance poses the question of whether current systems are equipped to limit warming to 1.5 degrees and what will happen if this is not achieved. It outlines three systemic features that must be considered in any successful transition to a 1.5 Degree world –refugees, food security and finance.
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This new publication from PRB gives guidance for banks on Nature Target Setting, particularly when it comes to lending activities, on or off balance sheet investing activities and capital market activities.
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Principles for Responsible Banking (PRB): Guidance for banks PRB Nature Target Setting - EN
