Digital library on sustainable finance
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On behalf of Greenpeace, INFRAS and Inrate analysed 51 sustainability funds licensed in Switzerland and Luxembourg to examine whether sustainable investments have a positive capital allocation effect. The results showed that so far, these investments hardly succeeded in steering significantly more capital towards a sustainable economy than conventional funds.
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This report by the International Capital Markets Association (ICMA) provides an international overview of both official and market-based taxonomies.The aim is to further understanding for market players of what these various taxonomies entail and what commonalities and differences exist between definitions.
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Overview and Recommendations for Sustainable Finance Taxonomies - EN
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This report seeks to understand how deeply climate-related expertise is embedded within private equity firms and to explore what climate performance expectations they impose on the companies in which they invest.
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This report sets out concrete reporting recommendations for the ESG performance of assets, for both asset owners and asset managers. Relevant report items, both on a qualitative and quantitative level, are displayed with the aim of allowing investors to judge the ESG performance of assets and, where necessary, aggregate this for numerous portfolios.
The recommendations include aspects on both the issuing entity level, as well as on the portfolio asset level. As market participants are not all equally advanced in ESG integration and reporting, proposals are formulated on two levels: Foundational-level reporting for beginners, and Advanced-level reporting for more experienced investors.
The SSF Reporting Recommendations on Portfolio ESG Transparency are a starting point on the path to more sustainability transparency and credibility of Swiss investors. They will have to be tested by different investors and developed further, based on feedback.
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SSF Reporting Recommendations on Portfolio ESG Transparency - DE
SSF Reporting Recommendations on Portfolio ESG Transparency - FR
SSF Reporting Recommendations on Portfolio ESG Transparency - EN
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Improved measurement and modelling of the impacts of climate change on financial stability is needed to underpin a policy debate that is gaining momentum. This report deepens quantitative insights for the European Union, adding to a growing body of international research examining the impacts of climate change on financial stability. In particular, it seeks to fill key gaps in the empirical understanding of the impacts of climate-related risk drivers on financial stability.
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This publication sets out different actions for investors invested in real assets and seeking to implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). More specifically, it includes technical guidance on the actions for asset owners; example of peer asset owner practice on implementing the TCFD recommendations and reducing exposure to climate risk; questions to engage consultants or fund managers on TCFD and climate scenarios.
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In the context of the new CO2-law in Switzerland this paper examines climate risks for Swiss pension schemes, the consequences and potential solutions. The identified risks to pension schemes are reputational risks, regulatory risks, disruptive technology, “stranded assets”, and physical climate risks.
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Ethos Opinion Paper: Klimawandel: Die Renten der zweiten Säule sind gefährdet - DE
Ethos Opinion Paper: Klimawandel: Die Renten der zweiten Säule sind gefährdet - FR
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WWF, in collaboration with PwC, has published a rating of 15 of the largest Swiss retail banks, evaluating how environmentally conscious these banks are. Compared to the previous rating, in 2017, there was marked positive improvement in the overall sustainable corporate governance and 7 retail banks now reaching the overall rating of “Appropriate”. However, none of the reviewed banks were deemed to be “Trendsetting” or “Visionary”.
The most prominent area for improvement identified is the integration of the full range of investment and credit products when developing sustainability topics. Particularly, credit products financing sustainable projects are still rare.
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The Swiss insurance industry has published its second sustainability report on schedule on 27 May 2021, the first Swiss National Climate Day. The report confirms that the topic of sustainability has not diminished in relevance among insurers, in spite of the coronavirus pandemic: an increasing number of insurers are integrating ESG criteria in their investment process. Sustainability criteria are involved in 83 per cent of investments.
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Sustainability Report 2020 - DE
Sustainability Report 2020 - FR
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The action plan sets out 16 concrete proposals for a future-proof combination of digital technology and a sustainable financial sector in Switzerland.
The action plan was produced through the Green Fintech Network, a network of start-ups and experts in green fintech set up with the assistance of the State Secretariat for International Finance (SIF). The proposed actions range from setting up a platform for sustainability data to the launch of an innovation challenge for green fintech start-ups, to the promotion of open finance and the expansion of funding options for green fintechs. The actions aim to act as concrete incentives for authorities, associations, and the scientific and business communities to drive forward promising innovative solutions.
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This report explores how climate-related risk drivers, including physical risks and transition risks, can arise and affect both banks and the banking system via micro- and macroeconomic transmission channels.
According to the report, the economic and financial market impacts of climate-related risks can vary according to geography, sector and economic and financial system development. The traditional risk categories used by financial institutions and reflected in the Basel Framework (eg credit risk, market risk, liquidity risk, operational risk) can be used to capture climate-related financial risks. Nevertheless, There is limited research and accompanying data that explore how climate-related risks feed into the traditional risks faced by banks. A better understanding of climate risk drivers and their impact on banks' exposures across all risk types would be gained from further research by a broader community.
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Climate-related risk drivers and their transmission channels - EN
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This report provides an overview of conceptual issues related to climate-related financial risk measurement and methodologies, as well as practical implementation by banks and banking supervisors.
According to the report, climate-related financial risks entail unique features, which means that sufficiently granular data and forward-looking measurement methodologies are needed to address them. To date, measurement of climate related financial risks has centred on mapping near-term transition risk drivers into bank exposures. Credit risk measurement has attracted the most effort, with a lesser focus on other risk categories. Initial scenario analyses and stress tests have in many cases focused on selected portfolios or exposures for transition risks, and selected hazards for physical risks. Key areas for further analysis relate to gaps in data and risk classification, as well as methodologies to address uncertainties associated with the nature of climate change and the potentially longer time horizon for risks to manifest.
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Climate-related financial risks - measurement methodologies - EN
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This report provides insights into the implications of climate change for the operations, governance and role of central banks. It covers initiatives such as the EU Action Plan and their impact on global central banking, central bank mandates to respond to climate-related risks, an overview of measures already being taken by selected central banks and a matrix assessing the impact of proposed measures on the divisions of central banks. The paper also makes recommendations how central banks can introduce changes to portfolio management and monetary policy, risk management and financial stability and additional supporting measures.
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The seventh edition of the Global Green Finance Index (GGFI 7) was published on 29 April 2021. GGFI 7 provides evaluations of the depth and quality of the green finance offerings of 78 major financial centres around the world and serves as a valuable reference into the development of green finance for policy and investment decision-makers.
The GGFI is compiled using 140 instrumental factors. These quantitative measures are provided by third parties including the World Bank, the Economist Intelligence Unit, the OECD and the United Nations. The instrumental factors are combined with financial centre assessments provided by respondents to the GGFI online questionnaire, using 4,536 assessments from 739 respondents.
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This report, published by the Climate Bonds Initiative, assesses the scale and depth of the green, social, and sustainability debt markets as of the end of 2020. The market analysis examines the changes in the debt markets during 2020 and also includes a forward-looking spotlight section, which explores the development of transition, green recovery finance and EU green market leadership, three themes that will continue to influence market growth into the 2020s.
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Buildings account for 36% of global greenhouse gas emissions and are therefore key for reaching the carbon targets pledged within the context of the Paris Agreement. Through its investment and financing activities, the financial system is closely intertwined with the building industry.
For the effective integration of sustainability considerations into finance, a "technical" discussion around which buildings can be classified as climate-friendly and sustainable is thus important. Against this background, this report identifies criteria for determining the environmental sustainability of buildings in Switzerland. In doing so, reference is made to the work of the EU's Technical Expert Group on Sustainable Finance and the international Climate Bond Initiative.
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Kriterien für klimaverträgliche Gebäudefinanzierung in der Schweiz - DE
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This final report covers the information to be provided by non-financial undertakings and asset managers to comply with their disclosure obligations under the Non-Financial Reporting Directive (NFRD).
The recommendations define the Key Performance Indicators (KPIs) disclosing how, and to what extent, the activities of businesses that fall within the scope of the NFRD qualify as environmentally sustainable under the Taxonomy Regulation. The key recommendations relate to the definitions to be used by non-financial undertakings for the calculation of the turnover KPI, the CapEx KPI and the OpEx KPI, and the KPI that asset managers should disclose.
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Final Report. Advice on Article 8 of the Taxonomy Regulation - EN
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This seminal guidance is a market-first practical toolkit for financial institutions to pivot their activities towards financing a sustainable blue economy.
Designed for banks, insurers and investors, the guidance outlines how to avoid and mitigate environmental and social risks and impacts, as well as highlighting opportunities, when providing capital to companies or projects within the blue economy. Five key ocean sectors are explored, chosen for their established connection with private finance: seafood, shipping, ports, coastal and marine tourism and marine renewable energy, notably offshore wind.
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Turning the Tide: How to Finance a Sustainable Ocean Recovery - EN
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Disclosure of climate-related financial risks greatly helps investors assess companies’ prepared-ness for climate change. Voluntary disclosures such as those based on the recommendations ofthe Task Force for Climate-related Financial Disclosures (TCFD) are being hailed as an effective measure for better climate risk management.
The authors of this paper ask whether this expectation is justified. With the help of a deep neural language model, they come to the conclusion that the firms’ TCFD support is mostly cheap talk and that firms cherry-pick to report primarily non-material climate risk information. From the analysis, the authors conclude that the only way out of this dilemma is to turn voluntary reporting into regulatory disclosures
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In the absence of a comprehensive regulatory framework, international recommendations and best practices on corporate responsibility in the area of climate change are emerging. Due to their financial materiality, climate change risks have recently gained widespread recognition by international organizations and financial regulators. Accordingly, sound corporate governance requires companies to have regard to climate change issues. The authors of this report propose the term ‘Corporate Climate Responsibility’ to frame various trends in legal doctrine and market developments.
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Corporate Climate Responsibility — The Rise of a New Governance Issue - EN
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This report assesses 9 options available to central banks to factor climate-related risks into their operational framework.
For the report, practitioners from the central bank community reviewed collateral and counterparty policies, asset purchases and credit operations with a view to offering a menu of options for climate-related adjustments in more concrete terms. The analysis showcasespossible changes to three of the most important policy fields for central bank: credit operations, collateral policies, and asset purchases. The review concentrates on potential measures on the asset side of a central bank’s balance sheet.
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Adapting central bank operations to a hotter world. Reviewing some options - EN
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This report reviews the full range of policies and initiatives that an ideal green central bank would adopt across four categories: Research and Advocacy, Monetary Policy, Financial Policy, and Leading by Example. Based on this literature review, expert consultation, and bilateraliinteractions with central bankers and supervisors, it develops a system to score and rank G20 countries on the green policies and initiatives of their monetary and prudential authorities.
The results, displayed as a ‘scorecard’, show that actions are failing to match up with words, as the vast majority of countries score full marks in Research and Advocacy while performing poorly across the other three categories.
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The Green Central Banking Scorecard. How Green Are G20 Central Banks And Financial Supervisors? - EN
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The survey at the centre of this report aims to capture the current status of climate investing, as well as the challenges and opportunities that climate change presents for investors. More than 300 institutional, wholesale and insurance investors accounting for about 20% of global assets participated in the survey.
The results of the survey indicate thathalf of all assets under management will be committed tonet zeroin the coming years, with 86% of investors saw climate change as a significant factor in their investment policy over the next two years. Most also believe that renewable energy forms part of the solution: 81% said solar, wind and hydrogen power would lead the way in switching from fossil fuels. 66% stated they would focus portfolio decarbonization efforts on global equities as their preferred asset class for achieving this over the next one to two years.
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While sustainable investing is no longer a new kid on the block, investment strategies that take an integrated gender and climate lens to investment decisions are still relatively new. This report highlights five foundational reasons for gender and climate investing. It showcases how this can be applied through three deep-dive sectoral analyses in energy, agriculture and infrastructure.
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Gender & Climate Investment: A strategy for unlocking a sustainable future - EN
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This study describes the state of the play of the sustainability-related products and services market in Europe; establishes an inventory and classification of market actors, sustainability products and services available in the market; and analyses the use and quality of sustainability-related products and services by market participants.
The study explores how the reliability and quality of assessment of sustainability-related data, ratings and research by third party providers can be enhanced and provides recommendations to stimulate demand and improve the quality of supply. The research is based on a combination of desk research and stakeholder engagement with various actors across the value chain.
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Study on sustainability-related ratings, data and research - EN
