Digital library on sustainable finance
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This report outlines concerns and needs of developing countries in relation to green finance. In particular the report focuses on the particular challenges faced by developing countries due to their underdeveloped financial systems.
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In this issue, close attention is paid to the 2016 proxy voting season. With levels of voting by long-term investors on the rise, issues such as climate resolutions, gender equality and environmentally friendly infrastructure are gaining more attention amongst shareholders.
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The Swiss Confederation considers the 2030 Agenda for Sustainable Development a unique opportunity to strengthen and to boost sustainable development at all levels: global, regional, national, and subnational. It therefore took an active role in the international process from 2013 to 2015 to draw up the universal Sustainable Development Goals (SDGs), the means of implementation and financing framework (Addis Ababa Action Agenda), as well as an effective follow-up and review system. Other Swiss key concerns in the negotiation process were, and will remain for the future, that the new goals integrate the social, economic and environmental dimensions in a balanced manner and take account of the interlinkages between them.
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The Climate Bonds Initiative released their 2016 market report on “climate-aligned bonds”. It was found that the market is still dominated by non-labelled climate-aligned bonds as opposed to Green Bonds with an estimated $694 bn of climate-aligned bonds outstanding, an increase of $96 bn compared to a year ago.
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Bonds and Climate Change – The state of the market in 2016 - EN
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The G20 Green Finance Study Group (GFSG) work supports the G20's strategic goal of strong, sustainable and balanced growth. The GFSG was established to explore how to funnel tens of trillions of dollars in order to scale up green finance. This study summarizes 14 input papers and establishes a number of options for the G20 and country authorities for consideration for voluntary adoption, to enhance the ability of the financial system to mobilize private capital for green investment. This paper was presented at the G20 event in September 2016.
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This guide was published along side the new DC code of practice no. 13. It provides guidance to pension schemes mandating that trustees should take into account factors that are financially material to any investment’s performance – such as the effects of climate change – and that ESG and ethical factors can be included if trustees also believe them to be significant.
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Guide to Investment Governance (to be read alongside our DC code of practice no. 13) - EN
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Abstract: Using newly-available materiality classifications of sustainability topics, we develop a novel dataset by hand-mapping sustainability investments classified as material for each industry into firm-specific sustainability ratings. This allows us to present new evidence on the value implications of sustainability investments. Using both calendar-time portfolio stock return regressions and firm-level panel regressions we find that firms with good ratings on material sustainability issues significantly outperform firms with poor ratings on these issues. In contrast, firms with good ratings on immaterial sustainability issues do not significantly outperform firms with poor ratings on the same issues. These results are confirmed when we analyze future changes in accounting performance. The results have implications for asset managers who have committed to the integration of sustainability factors in their capital allocation decisions.
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Corporate Sustainability: First Evidence on Materiality - EN
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In this report, a group of experts from the financial sector, NGOs, academia and government authorities in Switzerland identifies the most important concrete measures for creating a (more) sustainable financial system in Switzerland. The experts believe that now is the perfect time to debate the measures and to take action and move beyond business as usual.
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Proposals for a Roadmap towards a Sustainable Financial System in Switzerland - DE
Proposals for a Roadmap towards a Sustainable Financial System in Switzerland - FR
Proposals for a Roadmap towards a Sustainable Financial System in Switzerland - EN
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This report assesses to what extent 45 of the largest banks globally have integrated the Guiding Principles into their operations over the past five years. To determine this the study focusses on the evaluation of human right policies, processes and reporting of the banks, against 12 criteria, based on four categories: policies, due dilligence commitments, reporting and access to remedy. The research concludes that progress in the implementation has been slow, there are no true leaders, and that the link between good policies and good implementation appears to be weak.
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This mandated research by WWF, focusses on the green bond market and explores the diverse landscape of green definitions, standards, frameworks, and guidelines that are currently used in the market. It emphasizes the centrality of the notion of "credibility" and "effectiveness" of green bonds, which stand at the center stage of the discussions and the importance of developing criteria around adaptation and climate resilience assets and environmental challenges beyond climate change.
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As part of a three year project, this statement was launched in a first step to clarify investor duties in relation to the integration of environmental, social and governance issues in investment practice and decision-making. The statement aims to call on international and national policy makers to introduce a policy instrument that clarifies investor obligations and duties, in particular, to make explicit reference to the requirement to integrate ESG issues in investment decision-making.
The Fiduciary Duty in the 21st Century programme has also produced a series of other publications, including Fiduciary Duty Country Roadmaps and specific research on investor duties and obligations in Asian markets. These reports can be accessed here.
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Fiduciary Duty in the 21st Century - Global statement on investor obligations and duties - EN
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This report provides an overview on the sustainable investment market in Germany, Austria and Switzerland by the end of 2015. The Swiss Sustainable Investment Market Report is an excerpt of the full report and was prepared jointly by FNG and SSF.
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This global executive study on corporate sustainability from MIT Sloan Management Review and The Boston Consulting Group (BCG) presents an in-depth analysis of investors’ new ability to connect sustainability performance with corporate performance, discusses how investors are using sustainability performance as a key criterion for making (and leaving) investments, and identifies what corporate leaders can do to stay relevant to sustainability-oriented investors. Over 3,000 managers and investors in organizations from over 100 countries have participated in this survey.
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The sustainable investment market in Switzerland experienced extremely dynamic growth in 2015. This is attributable in part to the fact that self-managed investments of asset owners were recorded for the first time and in part to the inclusion of new study participants from the asset management field. Notwithstanding these two factors, it can nonetheless be stated that the level of growth was above the market average for 2015: sustainable funds recorded stronger growth than their conventional counterparts. Their share of the overall funds market thus increased to over 4.5%.
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Swiss sustainable investment market report 2016 - DE
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The sixth annual impact investor survey found that USD 15.2 bn commited by 157 respondents to 7,551 impact investments in 2015. In 2016, respondents plan to increase capital committed by 16% to USD 17.7 bn and number of deals by 55% to 11,722. Overall the participants describe continued improvements in the sophistication of the impact investing industry. Challenges, such as appropriate types of capital across the risk-return spectrum, and high-quality investment opportunities with track record still persist.
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This report offers answers of millennials engaged in impact investing, regarding their interest in the topic and their actions taken, based on a survey completed by 58 individuals. Overall millennials are interested in the issue and either take a portfolio approach, or try to align their careers and philanthropic activities with their values but still face important barriers. 10 in-depth interviews provide insights into the lives of active impact investors.
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This report is the follow-up study of the one published in 2013. Since then, there has been a surge in the number of reporting instruments identified. The research identified almost 400 sustainability reporting instruments in 64 countries versus 180 instruments identified in 44 countries in the 2013 report. Especially the level of activity of stock exchanges and financial market regulators is noteworthy in the 2016 edition.
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Carrots & Sticks - Global trends in sustainability reporting regulation and policy - EN
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Die Studie der Alternativen Bank Schweiz (ABS) und dem Verein zur Förderung von Ethik und Nachhaltigkeit bei der Geldanlage (CRIC) besteht aus zwei Teilen. Der Erste beschreibt die Wertpapierbörse vor dem Hintergrund des ökonomischen Standardmodells und den der Ökonomie eigenen normativen Auffassungen. Der zweite Teil analysiert den Börsenhandeln aus der Sicht von CRIC relevanten ethischen Problemfeldern. In einer Replik nimmt die ABS Stellung zu den einzelnen Argumenten und Empfehlungen der CRIC Analyse.
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Gut oder Börse? Überlegungen zum ethischen Börsenhandel - DE
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This report focusses on capitalised green investment banks (GIBs), analysing the rationales, mandates and financing activities of this relatively new category of public financial institution. Based on the experience of over a dozen GIBs and GIB-like entities, the report provides a non-prescriptive stock-taking of the diverse ways in which these public institutions are catalysing private investment in low-carbon, climate-resilient infrastructure and other green sectors, with a spotlight on energy efficiency projects. The report also provides practical information to policy makers on how green investment banks are being set up, capitalised and staffed.
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This report suggests a model that quantifies the impact of potential climate and energy regulation on company profitability. Thereby aiming to improve stock picking and empowering investors to engage with companies on actions they can take to become "future proof". The research finds significant effects of climate and energy regulation on company profitability, but with important differences on a firm-level within the same sectors and geographies.
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Helping the investment industry to understand the impact of their investments on sustainability challenges, is the aim of this research. Therefore, a framework is suggested based on a set of six environmental and social themes (based on SDGs), which should allow investors to calculate and communicate the social and environmental impacts of their portfolio.
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In search of impact: Measuring the full value of capital - EN
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This report includes investment strategies that can contribute to increased long-term value creation by companies and the economy as a whole. Such investments are guided by a clear investment philosophy, process and culture rather than a defined set of rules or criteria. This report outlines 10 design features which can be flexibly adapted to deliver varying degrees of long-term value; focusing foremost on active listed equity strategies.
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Taking the long view: A toolkit for long-term, sustainable investment mandates - EN
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This briefing underlines the importance that green finance is scaled, thereby 'industrialised'. This requires international harmonization of definitions, products and standards. Hence governments have a central role to play. This report discusses barriers, challenges, and makes suggestions on how to encourage the industrialisation of sustainable finance.
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The global food system is affected by changing environmental conditions (e.g. water scarcity) which will increase over the coming years, as well as the increasing demographic pressure and demand for food supplies. It is highly probable that the volatility of food commodity prices will also increase over the coming years. Furthermore, higher and more volatile food prices are key transmission mechanisms through which environmental risks and constraints (e.g. climate change) will impact national economies. If these are significant enough, they may affect a country's credit rating and risks exposure of sovereign bondholders. This report discusses how more volatile food prices, influence the different nations.
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ERISC Phase II: How food prices link environmental constraints to sovereign credit risk - EN
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The survey provides information on 75 retirement schemes, monitoring and comparing the investment behaviour, asset levels, and performances in order to help and encourage long-term financing by institutions. The importance of retirement systems has grown over the last 15 years, representing 51.8% of GDP in 2001, and 61.9% of GDP totalling USD 30.2 tn in assets. Thus, the accumulation of saving in such financial channels has never been larger. The research shows that pension schemes face a challenging environment, especially due to the low interest rates. Thus, there is an important quest for alternative investment management, uncorrelated lower volatility returns, expansion of alternatives, etc. Six key trends have been identified by the survey respondents, of which the following ones are particularly interesting:
- Emerging markets and foreign investment
- Climate change resiliency and green investments
- Social impact investing
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