Digital library on sustainable finance
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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
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Finance Watch has published a landscape paper on natural capital and ecosystem services, mapping the efforts made so far in conservation finance and suggests some policy ideas ahead of the 2020 COP, with the aim to mainstream the the natural capital approaches in financial systems.
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The Global Sustainable Investment Review 2018, the fourth edition of this biennial report, collates the results from the market studies of regional sustainable investment forums from Europe, the United States, Japan, Canada, and Australia and New Zealand. It provides a snapshot of sustainable investing in these markets at the start of 2018 by drawing on the in-depth regional and national reports from GSIA members—Eurosif, Japan Sustainable Investment Forum (JSIF), Responsible Investment Association Australasia, RIA Canada and US SIF.
This report also includes data on the African sustainable investing market, from the African Investing for Impact Barometer, and on Latin America from the Principles for Responsible Investment.
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The Global Impact Investing Network’s Sizing the Impact Investing Market report provides an in-depth analysis of the current size and composition of the impact investing market. The GIIN estimates the current size of the global impact investing market to be $502 billion.
Based on the collation of AUM data on more than 1,300 impact investors around the world, this research also underscores the diversity of the market, capturing data from many types of investors. These include asset managers, foundations, banks, development finance institutions, family offices, pension funds, insurance companies, and others.
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In its first comprehensive report the Network for Greening the Financial System (NGFS) provides six recommendations for central banks, supervisors, policymakers and financial institutions to enhance their role in the greening of the financial system and the managing of environment and climate-related risks.
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A call for action. Climate change as a source of financial risk - EN
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This whitepaper by Inrate looks at current and upcoming developments in the transport sector, highlighting that in order accomplish the transition to a sustainable transportation system, it is imperative for society to transition to zero-emission vehicles, internalize high external costs and develop the necessary infrastructure. These changes offer significant opportunity for investors.
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For the 2019 Q1 Investor Watch, UBS looked at how women worldwide engage with their finances. From September 2017 to January 2019, UBS surveyed 3,652 women and led in-depth interviews with 71 respondents, showing that while 80% of women globally are highly involved in their short-term finances, almost 60% of women do not engage in long-term financial activities such as investing, insurance or retirement.
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UBS Investor Watch: Own your Worth - DE
UBS Investor Watch: Own your Worth - FR
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This study discusses the economic and legal impacts of the EU Action Plan Sustainable Finance on the Swiss financial sector and makes concrete recommendations for sustainable finance in Switzerland. Most importantly, Switzerland must adapt its framework conditions in such a way that the Swiss financial sector will continue to have access to the European market and be able to keep pace with international developments.
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The UN Environment convened Financial Centers for Sustainability (FC4S) Network published the first State of Play report, which measures the contribution of financial centres to sustainable development and the ongoing low-carbon transition.
The report looks at how the world’s leading financial centres are entering a new phase of strategic action on green and sustainable finance and also identifies key challenges.
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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. The report is intended to help investors learn how they can better integrate ESG data into their analysis and investment decision making.
The report focuses on the current state of ESG integration in Europe, the Middle East and Africa (EMEA). Other regional reports focus on the Americas and APAC regions.
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ESG integration in Europe, the Middle East, and Africa: markets, practices, and data - EN
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This report assesses the current landscape of environmental, social, and governance (ESG) integration in the infrastructure investment space. It includes an overview of tools available to support investors and other actors in evaluating and quantifying ESG criteria and incorporating them into the infrastructure development and investment process.
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Valuing Sustainability in Infrastructure Investments: Market Status, Barriers and Opportunities - EN
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This guidance discusses how ESG factors may influence the forecasting of financials (modelling) in infrastructure investments.
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Guidance note on integrating ESG - factors into financial models for infrastructure investments - EN
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This report, part of the SSF focus publication series, provides a concise overview on existing practices to measure climate-related risks of investments in investment portfolios. The publication gives practical guidance for investors seeking to measure the climate risks of their portfolios. Finally, given the increasing focus on aligning portfolios with internationally agreed climate scenarios, the publication also discusses future developments in the field.
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Focus: Measuring Climate-Related Risks in Investment Portfolios - EN
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The WWF Pension Funds Rating 2018/2019 analyses and assesses the 20 largest pension funds in Switzerland (based on assets under management at the end of 2016). The WWF Pension Funds Rating was carried out for the second time as a way of initiating a regular dialogue with the participating pension funds and their stakeholder groups.
The full rating is available in German, with summaries in French, English and Italian.
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Swiss Pension Funds and Responsible Investment - DE
Swiss Pension Funds and Responsible Investment - FR
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This paper shows how passive funds can make a full contribution to mitigating climate change. As a growing number of institutional asset owners are divesting from coal assets, index funds are becoming the holders of last resort. The common wisdom has it that index funds cannot sell out of individual stock holdings. This paper investigates the relationship between index providers and index funds and finds the traditional understanding that index investors cannot sell to be false. Instead an increasing prevalence of index investors switching both indices and index providers is noted.
The paper also suggests a number of solutions for index funds to reduce the carbon intensity of their funds, such as switching the indices their funds employ, discontinuing niche ETFs that are carbon intensive, reducing fees on low-carbon investments, or making use of their financial clout, as index providers’ biggest customers, to advocate for selective index amendments.
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The core concepts of responsible investment are the consideration of ESG factors in investment decisions and investor stewardship, alongside a commitment to both corporate and investor transparency. Such concepts apply to all asset classes, but there are differences in the way practitioners implement responsible investment depending on whether they invest in public or private debt or equity, and in liquid or illiquid markets.
To date, little has been written about how investors can invest responsibly in private debt. This paper aims to promote better understanding of the rationale for responsible investment in the context of private debt investments, and is based on desk research, interviews with 18 investors and industry stakeholders, and group discussions among PRI signatories.
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This publication explores "the missing link” that exists between financial stability and environmental stability and is based on research conducted in 2017/2018 which was completed during the last OECD Forum on Green Finance and Investment. It discusses the role prudential authorities such as central banks, financial supervisory authorities, or standard setters, should play in assessing and mitigating climate-related risks.
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The_missing_link_Policy-Recommendations (pdf 2.7 MB)Summary
Along with the Swiss Pension Funds Rating 2018/2019, WWF Switzerland also published a guide for pension fund beneficiaries.
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Guide for pension fund beneficiaries - DE
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An updated and expanded study of Morningstar’s 56 unique ESG-screened indexes finds that performance across the range tends to be strong. They found that 41 of the 56 Morningstar’s ESG indexes outperformed non-ESG equivalents (73%) since inception.
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Morningstar's ESG Indexes Exhibit Attractive Investment Attributes - EN
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This publication is a sequel to the OECD 2015 report on Social Impact Investment (SII), Building the Evidence Base, bringing new evidence on the role of SII in financing sustainable development. It depicts the state of play of SII approaches globally, comparing regional trends, and assesses its prospects, with a special focus on data issues and recent policy developments.
Importantly, it provides new guidance for policy makers in OECD and non-OECD countries, as well as providers of development co-operation, development financers, social impact investment practitioners and the private sector more broadly, to help them maximise the contribution of social impact investing to the 2030 Agenda.
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Social Impact Investment 2019. The Impact Imperative for Sustainable Development. - EN
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Why has conventional capital market theory and the theory of finance ignored systematically ethics in the last decades? Are ethics and finance really counterparts? These and many other questions are tackled in the latest book of Prof. Dr. Henry Schäfer, which delivers an overarching discussion and analysis of the building blocks of modern capital market theory and an analysis of its hidden ethical content.
The book illustrates the significant degree of alienation between the financial and the real side of economies, stemming from the long-standing struggle between ethics and economics. Furthermore, it provides a roadmap of modern value thinking, highlighting the crucial role of stakeholders and non-governmental organizations.
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