Digital library on sustainable finance
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The Blended Finance Taskforce commissioned Convergence to support in segmenting the private sector ecosystem for getting a better understanding how to drive more institutional investment towards the Global Goals in developing countries. This resulting report provides ananalysis of the investment motivations, requirements, and constraints of six segments of institutional investors: I) pension funds, ii) insurance companies, iii) sovereign wealth funds, iv) commercial banks and investment banks, v) private equity firms, and vi) asset/wealth managers. Blended finance structures must create assets that fit within the mandates, constraints, and risk-adjusted return preferences of each institutional investor segment.
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The flagship report of the Blended Finance Taskforce created by the Business and Sustainable Development Commission presents the perspective of the private sector towards Blended Finance. The report offers five key take-aways:
- Momentum is building around the $50+ billion blended finance market.
- There is a window of opportunity for private institutional investors.
- The MDBs and DFIs will be critical to scaling the blended finance market and can do so by setting ambitious targets to mobilise external private finance.
- Developing countries which generate high quality infrastructure assets will not be short of financing.
- There is a major opportunity for the world to increase its underlying rate of growth, deliver the Sustainable Development Goals (including climate) and strengthen long-term returns for savers.
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The report provides a thorough assessment of the current state and priorities for blended finance for achieving the SDGs. It argues that while blending has potential to scale up commercial finance, its deployment by the development finance community needs to be based on a common framing and principles, as well as additional evidence and analysis. Therefore, the report describes concepts and definitions, lays out the main actors and instruments and shares learnings from past experiences.
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Making Blended Finance Work for the Sustainable Development Goals - EN
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The UBS whitepaper constitutes a blueprint for directing private capital towards the SDGs. It points out the specific SDGs where private wealth can play a larger role, which are zero hunger; quality education; good health and well being; affordable and clean energy; industry, innovation and infrastructure; and climate action. Yet, in order to attract the needed investment the transparency of data ought to be increased to facilitate the identification of investment opportunities.
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In this final report, the HLEG makes eight recommendations to be considered by the Commission to improve the contribution of the financial system to sustainable and inclusive growth. Those are:
- establishing an EU sustainability taxonomy, starting with climate mitigation;
- clarifying investor duties to extend the time horizons of investment and bring greater focus on environmental, social and governance (ESG) factors into investment decisions;
- upgrading disclosures to make sustainability opportunities and risks transparent;
- empowering and connecting Europe’s citizens with sustainable finance issues;
- developing official European sustainability standards for some financial assets, starting with green bonds;
- establishing ‘Sustainable Infrastructure Europe’ to deploy development capacity in EU member states for infrastructure necessary for a more sustainable economy;
- reforming governance and leadership of companies to build sustainable finance competencies;
- and integrating sustainability firmly in the governance of financial institutions as well as in financial supervision.
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Financing a Sustainable European Economy - Final Report - EN
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This document gives a explanation of Social impact bonds and provides the reader with a historical perspective on the investment vehicle. Furthermore it describes current best practices as well as difficult experiences with regards to Social Impact Bonds (SIBs) in a European environment. With this German publication, authors hope to initiate a discussion on both the risks an opportunities of issuing SIBs in Switzerland.
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This research maps out the legal implications of launching a Social Impact Bond (SIB) in Switzerland as well as its taxation. Since Swiss issuances are still lacking for reference, the authors provide learnings of a recent SIB project by the International Committee of the Red Cross supported by SECO, amongst other donors.
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Swiss Legal and Tax Implications of Social Impact Bonds - EN
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Based on analysis of over 29,000 incidents that took place from 2014 to 2016, the report identifies prominent incident categories, where incidents are occurring, and which industries are most involved. The report also considers how incident analysis can be integrated into portfolio strategy, including industry tilts, beta analysis and security selection, as well as corporate engagement processes.
Sustainalytics’ incident collection framework covers 45 incident categories and 60,000 sources of information worldwide, and provides comprehensive insight into company activities that generate undesirable social or environmental effects. The key findings from Sustainalytics’ report include:
- Quality and safety and business ethics are the two most common ESG incident types, accounting for 30 percent of all incidents;
- The banking industry accounts for 19 percent of all incidents, more than twice the amount of the next most exposed industry (food products);
- Adjusting for differences in industry size, the automobile industry is the most incident prone, and real estate is the least; and
- Over 40 percent of incidents occur in the U.S., the highest concentration of any country.
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This publication provides a concise, accessible summary of finance flows to renewables around the world. The study examines finance flows worldwide in 2013-2016, broken down by technology, financial instrument and region.
Although investment in renewables dipped in dollar terms in 2016-2017, they have continued to gain ground against conventional energy sources, particularly for new power plants. The report finds that private sources provide the bulk of renewable energy investment globally – over 90% in 2016. Conventional debt and equity are the most prominent financing instruments
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IRENA_Global_landscape_RE_finance_2018 (pdf 3.6 MB)Summary
WWF works with many stakeholders to tackle the challenge that climate change presents. With this Climate Guide to Asset Owners, WWF wishes to support asset owners and show how they can align their investments with the objectives set in the Paris Climate Change Agreement (‘Paris Agreement’). This document is structured to assist asset owners in their efforts to address climate change. It demonstrates that the financial evidence and regulatory environment have created a favourable context for taking action on climate change; and that asset owners can count and build on extensive strategic advice and existing good practice from peers. On that basis, WWF presents operational recommendations on how asset owners can accelerate their progress and seek to achieve carbon mitigation in line with the Paris Agreement. The document ends with the next steps planned by WWF.
Read English summary here
WWF works with many stakeholders to tackle the challenge that climate changepresents. With this Climate Guide to Asset Owners, we wish to support assetowners and show how they can align their investments with the objectives set inthe Paris Climate Change Agreement (‘Paris Agreement’).WWF recognises that addressing climate change is a multi-year effort, and thatasset owners are at different stages on this path. Yet the pace and scale of actionrequired to comply with the Paris Agreement does not leave room forprocrastination: the cost of the transition increases with every year of inaction.This document is structured to assist asset owners in their efforts toaddress climate change. It demonstrates that the financial evidence andregulatory environment have created a favourable context for taking action onclimate change; and that asset owners can count and build on extensive strategicadvice and existing good practice from peers. On that basis, WWF presentsoperational recommendations on how asset owners can accelerate their progressand seek to achieve carbon mitigation in line with the Paris Agreement.The document ends with the next steps planned by WWF.
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WWF climate guide to asset owners: aligning investment portfolios with the Paris Agreement - DE
WWF climate guide to asset owners: aligning investment portfolios with the Paris Agreement - EN
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This ShareAction UK report captures the current state of the European banking sector’s response to climate-related risk and the low-carbon transition. It aims to provide share- and bondholders in the 15 largest European banks with an overview of where the sector is positioned on climate-related risks and opportunities. The report is structured around four key areas:
- Climate-related risk assessment and management
- Low-carbon products and services
- Public policy engagement and collaboration with other actors on climate change
- Governance structures and strategy on climate-related risks and opportunities
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The UNEP Inquiry has published this report with the official launching of the international network for Financial Centres for Sustainability. The report maps out the action areas, as well as strategic priorities which the group will address in the following years.
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Accelerating Financial Centre Action on Sustainable Development - EN
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The PRI has published this review with the aim to drive a deeper discussion in the industry about the inclusion of ESG issues as a standard part of consulting advice and which additional ESG integration investment services are needed. The report also sets out barriers to this practice and identifies preliminary interventions.
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This report outlines the key megatrends that are impacting the global economy, financial system and the UN Sustainable Development Goals (SDGs). Over the past several months the authors have engaged with PRI signatories, market participants and other key stakeholders to gauge investor responses and strategies for dealing with current and future outcome volatility caused by the megatrends. The study finds that technological advances and environmental changes are seen as the most impactful global megatrends that represent major opportunities and threats to investment institutions. However it also shows that social inequality and global capital flow issues, including public sector deficits, emerge as rival concerns for senior global investment industry figures.
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Responding to megatrends: investment institutions trend index 2017 - EN
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This paper builds on the requirements for sound due diligence as explained in the Thun Group of Banks' 2013 Discussion Paper and focuses on situations where banks may be directly linked to negative human rights impacts under UNGP 13b of the UNGPs. It further clarifies the interpretation of UNGP 13a, and specifies that the Paper was drafted from the perspective that financial institutions will generally be directly linked in the case of adverse human rights impacts (UNGP 13b).
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In this first benchmarking, Climate-KIC, I4CE and PwC compare the financial centres of G7 countries: Frankfurt (Germany), London (United Kingdom), Milan (Italy), New York (United States), Paris (France), Tokyo (Japan) and Toronto (Canada). The main indicators were transparency of information; availability of green finance; green intensity; integrity of green finance; and the dynamics of the green financial centres. Though working with partial data only the report attempts to highlight the strong points of certain financial centres with respect to developing green finance. This first benchmark shows that green finance is currently traceable mainly through stock exchanges and notably via green bonds. A first conclusion is the need of diversifying green financial products and of developing their traceability and comparability at an international level. This concerns mainly green lending, private equity, insurance and green investment funds.
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The purpose of this directory is to provide policymakers and global and regional market participants a simple, easy-to-use reference guide as to which international and regional governments and industry bodies have implemented or are implementing major initiatives on green, sustainability and climate change.
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This report presents findings from the GIIN’s first comprehensive survey of the state of impact measurement and management (IMM) in the impact investing industry. It captures data from 169 impact investing organizations to provide valuable insights into why impact investors measure and manage their social and environmental impact, how they do so, and challenges that remain. By providing critical data and transparency regarding IMM practice, this report enables investors to better understand this core element of impact investing.
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The State of Impact Measurement and Management Practice - EN
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Swiss Sustainable Finance has prepared a handbook on sustainable investments for Swiss institutional asset owners. One year after the publication of the handbook in German and French, SSF updated and translated the publication into English.
The handbook contains relevant information for institutional asset owners and consists of 21 chapters, 8 case studies, a glossary, and over 30 visuals. It offers a comprehensive overview of the various available sustainable investment strategies and it contains concrete tips helpful in implementing a sustainable investment policy.
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The High-Level Expert Group on Sustainable Finance, established by the Commission, has published its first report setting out concrete steps to create a financial system that supports sustainable investments. The Commission will explore some key early recommendations to take further steps towards a low carbon, more resource-efficient and sustainable economy. The report is part of broader efforts to map out an EU strategy on sustainable finance, a priority action of the Capital Markets Union (CMU) Action Plan.
For more information visit the group's website
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This follow-up report of "The cost of inaction: Recognising the value at risk from climate change"from July 2015 reviews issues concerning climate-related financial disclosure. In more detail, it investigates the mandates of ten different international, EU and UK financial institutions, all with very different focuses and mandates, to consider what role they play, or could play, in supporting climate-related financial risk reporting. The report also looks at the recommendations put forward by the TCFD and considers how climate-related financial disclosure can be set into the UN’s broader Sustainable Development Goals (SDGs), rather than being siloed into green finance-related policies and regulations.
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THE ROAD TO ACTION Financial regulation addressing climate change - EN
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This report provides information for investors, banks and companies about the most attractive climate investment opportunities, while offering governments a set of best practice policies and measures that have been proven to attract private investment. Engaging the private sector in climate-smart investments will be essential to achieving the goals of the Paris Agreement.
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Creating Markets for Climate Business: An IFC Climate Investment Opportunities Report - EN
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Quarterly reporting remains essential in providing investors with the transparency they need and in keeping management teams accountable for their performance. On the other hand, consensus earnings estimates will continue to be a feature of markets regardless of what companies choose to disclose. If companies do not issue guidance, a mismatch between reported earnings and consensus indicates an inaccurate forecast rather than an earnings “miss.” This paper is aimed not at reporting or consensus estimates, but at the issuance of quarterly earnings guidance alone.
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This ESG Magazine Issue 9 looks at why and how companies, investors and related bodies are already starting to play their part in promoting the SDGs. It also looks at how a selection of the goals can fit clearly into the risk/return profiles of institutional investors, according to market practitioners. Governments could help enormously here by making SDG goal targets part of public procurement programmes where feasible: that would be a direct financial signal to investors. There is still a very real danger that the SDGs could become the ultimate catch-all for greenwashing – SDG-washing if you like – whereby every business and finance activity is hitched, however tenuously, to a goal.
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This study looks at how foundations are applying mission-related investing and their corresponding needs in Switzerland and Liechtenstein. Over 50 foundations were surveyed. The findings are presented in this report in addition to key recommendations on how to bring about further progress. See the German version for the full version.
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Creating impact with a foundation's Assets: Mission (Im)Possible? - DE
Creating impact with a foundation's Assets: Mission (Im)Possible? - EN
