Digital library on sustainable finance
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Meta-studies examining the relationship between environmental, social, and governance (ESG) and financial performance have a decades-long history. Almost all the articles they cover, however, were written before 2015. Those analyses found positive correlations between ESG performance and operational efficiencies, stock performance and lower cost of capital. Five years later, we have seen exponential growth in ESG and impact investing – due in large part to increasing evidence that business strategy focused on material ESG issues is synonymous with high-quality management teams and improved returns.
In collaboration with Rockefeller Asset Management and Casey Clark, CFA (MBA '17), the NYU Stern Center for Sustainable Business examine the relationship between ESG and financial performance in more than 1,000 research papers from 2015 – 2020.
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ESG Paper Aug 2021 (pdf 1.7 MB)Summary
This academic article offers an examination of the different different terms used to describe investments in the sustainability context, particularly of the impact investment terminology and its different definition.
To offer (re-)orientation from an academic perspective, the authors derive a new typology of sustainable investments. This typology delivers a precise definition of what impact investments are and what they should cover and proposes distinguishing between impact-aligned investments and impact-generating investments. Based on these insights, the authors hope to lay the foundation for future research and debates in the field of impact investing by practitioners, policymakers, and academics alike.
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This report explores the increasing sophistication with which impact investors are approaching decision-making and provides insights into financial performance. Specifically, it finds that impact investing is showing signs of maturing, with investors exercising a multi-dimensional approach to their decision-making to achieve satisfactory financial and impact performance in line with their goals.
Drawing on data from six of the industry’s existing financial performance studies, the report also offers a synthesis of impact investment financial performance and additionally analyzes the GIIN’s 2020 Annual Impact Investor Survey responses of 161 impact investors seeking risk-adjusted, market-rate returns.
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Impact Investing Decision-making: Insights on Financial Performance - EN
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This policy consultation response and Consultation on regulations lays out the UK government's plans to require pension schemes to disclose their carbon footprint and governance structure, and undertake detailed climate scenario analysis.
It sets out the government's proposals to require pension funds will to commence climate reporting in line with recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) from 2021. Initially, the obligations will only apply to schemes with more than £5bn in assets, but the threshold will fall to £1bn from October 2022. Under the current plans, pension scheme trustees will be required to carry out detailed scenario analysis, exploring the effects and implications of various climate scenarios such as a rise in global temperatures or the introduction of a high carbon price. The analysis must include at least two scenarios involving an increase in the global average temperature, one of which must be between 1.5°C and 2°C.
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This report presents the findings from an in-depth assessment of actions in 24 financialhubs, all members of the UN-convened International Network of Financial Centres for Sustainability (FC4S) across Africa, the Americas, Asia and Europe. The FC4S assessment framework allows for an effective evaluation of each financial centre’s alignment with the Paris Agreement and the UNSDGs, for the identification of areas which require further work, and for the development of strategic advice for each one of them to apply, considering current best practices.
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This report outlines state-of-the-art approaches—particularly the use of climate change scenarios—to better assess climate-related physical, transition and litigation risks in the insurance business. It captures the key findings of the project of UN Environment Programme’s Principles for Sustainable Insurance Initiative to pilot the TCFD recommendations, which was collaborative effort by 22 insurance companies representing over 10% of world premium volume and USD 6 trillion in assets under management.
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This report maps the current state of ocean finance revealing trends in lending, underwriting and investment activities which impact the ocean. Moreover, it outlines the frameworks and financial instruments that are successfully addressing ocean sustainability and highlights new opportunities and gaps in the market. It looks across five major ocean-linked sectors chosen for their established connection with private finance: seafood, ports, shipping, coastal and marine tourism and marine renewable energy.
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Dieses Gutachten im Auftrag des vzbv argumentiert, dass nachhaltig beworbene Geldanlagen nicht automatisch zu mehr Nachhaltigkeit führen. Zwar können nachhaltige Geldanlagen durchaus eine positive Wirkung entfalten, wahrscheinlicher sind dabei allerdngs indirekte Effekte, zum Beispiel, wenn Verbraucher über eine Geldanlage für das Thema Nachhaltigkeit sensibilisiert werden. Direkte Effekte über den Kapitalmarkt sind möglich, aktuell aber kaum nachweisbar. Prinzipiell können sie über einen Verzicht auf Rendite durch Verbraucher erreicht werden, zum Beispiel, wenn in Folge der Geldanlage in bisher nicht rentable regenerative Energien investiert wird. Angebote der Finanzindustrie, die mit einem direkten Beitrag ihrer Anlageprodukte zu bestimmten Nachhaltigkeitszielen werben, und zugleich marktübliche Renditen versprechen, müssten demnach kritisch hinterfragt werden.
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This report lays out a call to collective action to address both the short-term collapse in resources of developing countries as well as long-term strategies to build back better following the outbreak of the COVID-19 pandemic.
The report highlights the need to enhance the quality of financing through better incentives, accountability and transparency mechanisms, integrating the long-term risks of climate change, global health, and other non-financial factors into investment decisions. The report concludes with a plan of action for all actors to work jointly to reduce market failures in the global financial system and to seize opportunities to align financing in support of the 2030 Agenda for sustainable development.
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This discussion paper is an analysis of the convergence and divergence of various climate risk analysis method results, based on a sample of 300 firms.
A rapidly growing number of market participants and financial authorities are exploring which metrics to use to capture climate risks, and to what extent the use of different metrics delivers heterogeneous results. This discussion note takes a first step in analyzing the convergence in assessments of climate-related transition risks across metrics providers, based on the ECB corporate bond portfolio. The findings show that firms’ risk assessments across metrics are fairly heterogeneous but tend to converge on which firms are most and least exposed to transition risks.
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Comparing_climate_risk_metrics_EN (pdf 542.2 kB)Summary
This review report provides a comprehensive overview of sustainable finance news, reports on sustainable finance and biodiversity, events and other related developments in 2020. It also includes contributions by a variety of practitioners that provide their view on biodiversity and the financial sector.
The report argues for the interconnectedness between the environment and the economy. It puts forward that it is misguided to view economic decisions as a series of independent trade-offs and sets out that Covid-19 has sharpened awareness of the interrelation of non-financial risks and their potential to cascade through economic and financial systems to sectors previously considered relatively safe.
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Protect nature, protect the economy. How the financial sector can safeguard biodiversity - EN
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Dialoge mit Unternehmen, die Ausübung der Stimmrechte oder das Einbringen von Resolutionen auf Aktionärsversammlungen sind Möglichkeiten für Investoren, Fortschritte im Sinne von Nachhaltigkeit anzustoßen, zu unterstützen oder sogar zu bewirken. Engagement lautet der Oberbegriff für diese verschiedenen Instrumente, die vielfach eingesetzt wurden und werden, mit Blick auf die ökologischen und sozialen Herausforderungen unserer Zeit jedoch noch viel ungenutztes Potenzial bergen.
Das vorliegende Buch nähert sich dem Thema aus unterschiedlichen Blickwinkeln: Zunächst wird Engagement aus wissenschaftlichen Perspektiven heraus beleuchtet, um dann die Anlagestrategie historisch wie auch konzeptionell und strategisch zu betrachten. Spezialisierte Organisationen kommen mit ihren Zugängen und Aktivitäten zu Wort und Praxisbeispiele aus Bereichen wie Existenzlohn und Klimawandel werden angeführt. Perspektivische Überlegungen zu Wandel, Wirkung und gelingenden Dialogen schließen den Sammelband ab.
Das Buch kann hier bestellt werden (Springer Verlag).
Softcover ISBN: 978-3-658-31213-8
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Nachhaltige Finanzen. Durch aktives Aktionärstum und Engagement Wandel bewirken - DE
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This study presents the results of the 2020 PACTA climate test of financial institutions.
It assesses the alignment of the Swiss financial sector with climate benchmarks, using 2DII’s Paris Agreement Capital Transition Assessment (PACTA) methodology. For the first time, 2DII and its partners measured progress across a vast swathe of the financial sector over the past three years, shedding light on the distinction between portfolio reallocation and real-world emissions reductions. Critically, the assessment shows that the Swiss financial sector’s consideration of climate issues has increased demonstrably since the 2017 study.
The full study is available in EN, a summary can be downloaded in German and French.
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DEF_DE_Zusammenfassung_PACTA 2020_05.11.2020 (pdf 8.0 MB)DEF_FR_Résumé_PACTA 2020_05.11.2020 (pdf 2.7 MB)
DEF_Bridging_the_Gap_PACTA_2020_Switzerland_november_2020 (pdf 12.3 MB)
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This SFI Roundup provides evidence-based perspectives on the opportunities and risks which lie ahead in the transition to a green economy, as well as how the financial sector, governments, central banks, firms, and consumers can all contribute to solve the climate puzzle. It includes academic as well as practitioners' insights, including contributions from Swiss Sustainable Finance CEO, Sabine Döbeli.
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SFI Roundup: Finance and the Green Transition - DE
SFI Roundup: Finance and the Green Transition - FR
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The "IFZ Sustainable Investments Study 2020. Nachhaltige Themenfonds" conducted by the Lucerne University of Applied Sciences and Arts assesses the offering of sustainable mutual funds in the Swiss fund market for the fourth year in a row.
According to the study, the assets of sustainable mutual funds in Switzerland have risen by 60 percent to CHF 316 billion and counting 777 sustainable funds over the past year, about a forth of which are invested in thematic funds. The report contains an overview of the largest sustainable funds in Switzerland.
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This report explores the broad range of different finance solutions at hand to support the transition to a climate-friendly economy. The extensive compendium, prepared by SSF in cooperation with its network, highlights 16 specific finance instruments and approaches for a low-carbon economy, and illustrates their implementation through 8 case studies.
The different chapters provide insights into the mechanisms and applicability of different instruments such as listed equity, green bonds, direct real-estate investments, green mortgages, insurance solutions, private equity investments, community finance and energy performance contracting.
The full report is available in English, with summaries in German and French.
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Financing the Low-Carbon Economy. Instruments, Barriers and Recommendations - DE
Financing the Low-Carbon Economy. Instruments, Barriers and Recommendations - FR
Financing the Low-Carbon Economy. Instruments, Barriers and Recommendations - EN
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This report contributes to the analysis of the diverse impact channels and associated measures theoretically available to financial market players in order to bring about changes in companies in the real economy.
To this end, the most recently published academic and non-academic literature were surveyed and systematically evaluated, and a critical analysis of the impact channels regarding existing practical implementation was carried out. The six impact channels analysed and discussed in this report are the secondary market, direct investments, real estate, banking, insurers and politics.
The full report is available in German and French, and a summary in English.
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Overview of the climate impact of financial market players’ action - DE
Overview of the climate impact of financial market players’ action - FR
Overview of the climate impact of financial market players’ action - EN
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The State Secretariat for International Finance (SIF) carried out a survey to discover where the fintech sector sees opportunities for concrete technological applications and where there may be obstacles for Swiss green fintechs in terms of funding, availability of data or regulatory environment. It makes overarching recommendations to the government and the private sector on how to improve framework conditions in Switzerland.
The results of the survey will be used as input for SIF's further work in the area of sustainable finance.
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2020 Green Fintech Survey - DE (pdf 11.5 MB)2020 Green Fintech Survey - EN (pdf 11.5 MB)
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This report provides an empirical assessment of investment in infrastructure by institutional investors domiciled in OECD and G20 countries, presenting a snapshot from February 2020.
Based on a new detailed view of investment channels, financial instruments, sectoral allocations, regional preferences and trends, the report provides guidance on policy levers and priorities to scale-up institutional investment in green infrastructure. Amongst other key findings, the report finds that regulatory limits on investments in infrasturcture for pension funds and insurance companies are generally not a constraint.
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Green Infrastructure in the Decade for Delivery. Assessing Institutional Investment - EN
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This report maps sustainable finance definitions and taxonomies in five jurisdictions: the European Union, People’s Republic of China, Japan, France and the Netherlands. When taxonomies are appropriately designed, they can improve market clarity, bring confidence and assurance to investors, and facilitate the measurement and tracking of sustainable finance flows. The report lays out preliminary considerations for good design of taxonomies, which can support policy makers to develop and grow sustainable finance markets to help achieve environmental and sustainable development goals. It also identifies differences among the taxonomies in scope as well as commonalities. These commonalities could provide a basis for creating comparable frameworks that facilitate international investment while also reflecting differing national circumstances.
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Developing Sustainable Finance Definitions and Taxonomies - EN
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This report analyzes Alipay’s Ant Forest trajectory as a green digital innovation and takes stock of its impact. Alipay Ant Forest, launched by Ant Financial in 2016, is a green fintech initiative that provides users with a tool to help measure their personal carbon footprints, recording avoided emissions derived from individual behavioral changes.
The report unpacks different policy and regulatory efforts in China that have enabled a green fintech firm like Alipay’s Ant Forest to thrive, one of which is China’s national policy directive on sustainable finance.
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Digital Technology Shaping Green and Sustainable Lifestyles. Exploring Alipay Ant Forest - EN
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This report outlines opportunities for investor engagement in the blue economy. The report stipulates that over a third of large institutional investors see the Blue Economy as one of the most important investment topics in 2020. It states that the ocean, besides creating livelihoods for billions of people, serves as a tremendous asset to climate change mitigation, absorbing 93% of climate heat and sequestering 25% of global carbon dioxide (CO2) emissions. Engagement opportunities in the blue economy include climate change mitigation and adaptation; maritime renewable energy; plastic pollution prevention; and sustainable fisheries and aquaculture.
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Engaging for a Blue Economy (pdf 3.7 MB)Summary
This report by the PRI provides an overview of investors' human rights responsibilites and lays out a framework that helps guide investors to respect human rights in investment activities. It presents a six-part framework, in which investors should: Adopt a policy commitment to respect internationally recognised human rights; identify actual and potential negative outcomes for people, arising from investees; prevent and mitigate the actual and potential negative outcomes identified; track ongoing management of human rights outcomes; communicate to clients, beneficiaries, affected stakeholders and publicly about outcomes, and the actions take and, lastly, enable or provide access to remedy. The report also outlines next steps for the PRI's agenda for the next few years and their work towards respect for human rights being implemented in the financial system.
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This guide aims to support investors in developing an evidence-based impact strategy for their entire portfolio. Based on available evidence, it recommends investors enable impactful companies to grow by considering impact in their investment decision and fund manager selection, to encourage improvement by screening out companies and engaging with investees, and to influence the public discourse by being vocal about what you do.
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This report is an analysis of over 150 investment funds that target emerging and frontier markets with a development impact focus. It builds on the previous impact fund surveys Symbiotics has developed, on microfinance investment vehicles (MIVs) initiated in 2007 with CGAP/World Bank, and on private debt impact funds (PDIFs) initiated in 2018 with the GIIN.
The survey brings a very comprehensive data set including funds affiliated to nearly 80 managers in 26 countries. It also sheds light on the business model of private asset impact funds (PAIFs), including their balance sheet structure, investment instruments, investee type, geography of investments, investor composition, risk, return and impact performance. It also offers multi-year analysis on microfinance funds, dating back to 2006.
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