Digital library on sustainable finance
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This is the final report of the UN PRI's "Fiduciary Duty in the 21st Century" programme, which intended to clarify investor obligations and duties (fiduciary duties) in relation to the integration of ESG issues.
The report affirms that fiduciary duty requires the incorporation of ESG issues into investment analysis and decision-making processes. It describes how this integration of ESG issues is an increasingly standard part of the regulatory and legal requirements for institutional investors, along with requirements to consider the sustainability-related preferences of their clients and beneficiaries, and to report on how these obligations have been implemented.
The report also identifies areas where further work is required and reflects on how investors’ duties and obligations may further evolve over time.
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The IOPS Supervisory guidelines on the integration of ESG factors in the investment and risk management of pension funds highlight a range of challenges to be met by pension funds governing bodies, asset managers and pension supervisors.
The guidelines provide guidance and propose a number of actions to be taken by pension supervisory authorities, intending to help pensions supervisors to oversee pension funds more effectively by integrating ESG factors. While they are non-binding, the IOPS encourages supervisory authorities to voluntarily adopt and implement the guidelines.
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This guide is a hands-on approach aimed at central banks that wish to adopt Sustainable and Responsible Investment (SRI) practices. It builds on the results of an SRI portfolio management survey among NGFS members and concludes with case studies of first-hand experiences by some NGFS members.
Among the five SRI strategies identified in the guide, the most prominent are green bond investments and negative screening for equity and corporate bond holdings.The survey shows that there is a growing momentum among NGFS members: 25 out of the 27 respondents have already adopted SRI principles in their investment approach or are planning to do so. Those principles range from a broad scope of environmental, social, and governance (ESG) considerations to a climate-specific focus. As the mandates and status of central banks differ, the guide does not offer a one-size-fits-all solution, but discusses potential SRI approaches and ways to implement them, allowing central banks to account for their own specific challenges.
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A sustainable and responsible investment guide for central banks’ portfolio management - EN
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The 2019 edition of the CS Gender 3000 report looks at the link between gender diversity and superior company performance and how this is evolving over time, analyzing 3000 companies across 56 countries.
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CS-gender-3000-in-2019 (pdf 1.2 MB)Summary
As global efforts to channel more private sector investment towards sustainable development ramp up, one key barrier has been the sheer proliferation of terms referring to “sustainable investment.” In a 2019 survey, the IIF Sustainable Finance Working Group (SFWG) polled member firms on their views. A significant majority agreed that industry alignment around simplifying terminology and product names into a few broad categories could greatly advance the goal of scaling up sustainable finance.
To help drive progress towards this goal, this short note sets out the case for simplification and proposes three such categories as a starting point for discussion: “Exclusion,” “Inclusion,” and “Impactful,” leaving “Philanthropic” as a separate category distinct from sustainable investment.
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Die Schweiz hat das Pariser Übereinkommen am 6. Oktober 2017 ratifiziert und sich damit unter anderem verpflichtet, ihre Finanzflüsse klimaverträglich auszurichten. Um die Erarbeitung und Diskussion entsprechender Massnahmen auf eine solide Basis stellen zu können, beauftragte das BAFU die beiden Gutachterinnen im Juli 2019 mit der Erstellung des vorliegenden Rechtsgutachtens zu den Grundlagen. Das Gutachten beantwortet insbesondere die folgenden Fragen: 1) Inwiefern sind die verschiedenen Finanzmarktakteure unter dem geltenden schweizerischen Recht verpflichtet, Klimarisiken und -wirkungen bei ihrer Tätigkeit zu berücksichtigen? 2) Mit welchen regulatorischen Instrumenten kann die Rechtssicherheit für schweizerische Finanzmarktakteure erhöht werden?
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Based on interviews with 14 proactive insurers, this report explores how climate awareness is being integrated into underwriting, investment, and group-wide risk management practices. In addition to exploring common barriers, this report also presents a practical framework of eight building blocks relevant for insurers introducing and developing climate strategies.
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The Climate Finance Leadership Initiative (CFLI) was launched in January 2019 in order to accelerate private sector investment for climate solutions. The seven founder members have published this report “Financing the Low-Carbon Future” which examines the challenges and potential solutions to delivering the necessary financing for a sustainable low-carbon economy.
The report highlights five factors that are hampering progress:
- Proven investment models are not replicated at scale.
- Risks in emerging markets constrain low-carbon investments.
- Many low-carbon investments in key emitting sectors are not yet profitable.
- The transition from carbon-intensive business models may create financial and social risk.
- There is a lack of tools and incentives to align portfolios with a low-carbon future.
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Financing the Low-Carbon Future (pdf 9.4 MB)Summary
A forceful policy response to climate change is not priced into today’s markets. Yet it is inevitable that governments will be forced to act more decisively than they have so far, leaving investor portfolios exposed to significant risk. The longer the delay, the more disorderly, disruptive and abrupt the policy will inevitably be.
In anticipation, PRI, Vivid Economics and ETA are building a landmark forecast of the financial impact of this Inevitable Policy Response (IPR), including a Forecast Policy Scenario:
- How will it affect the economy?
- Which asset classes will be impacted?
- Which sectors are most at risk?
A summary of the report can be accessed here. The project is a collaboration between the PRI, Vivid Economics and Energy Transition Advisors, with contributions from 2° Investing Initiative, Carbon Tracker and the Grantham Research Institute on Climate Change and the Environment.
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Forecast Policy Scenario (FPS) models the impact of the forecasted policies on the real economy up to 2050, tracing detailed effects on all emitting sectors, including changes to energy demand (oil, gas, coal), transport, food prices, crop yields, and rates of deforestation.
A summary of this report can be accessed here. The Inevitable Policy Response (IPR) project project is a collaboration between the PRI, Vivid Economics and Energy Transition Advisors, with contributions from 2° Investing Initiative, Carbon Tracker and the Grantham Research Institute on Climate Change and the Environment.
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Users of the capital markets, the world over, are now highly alert to environmental and social issues, with around 60% of both issuers and investors saying environmental and social issues are ‘very important’.
The findings come from HSBC’s Sustainable Financing and Investing Survey 2019, a poll of 500 investors and 500 issuers from the Americas, Asia, Europe and the Middle East.
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HSBC Sustainable Financing and Investing Survey 2019-komprimiert (pdf 4.2 MB)Summary
On 30 September 2019, the TEG published its final report on Climate Benchmarks and Benchmarks’ ESG Disclosures.
The final report recommends a list of minimum technical requirements for the methodologies of ‘EU Climate Transition’ and ‘EU Paris-aligned’ benchmarks, with the objective to address the risk of greenwashing. The report also recommends a set of Environmental, Social and Governance (ESG) disclosure requirements, including the standard format to be used for the reporting. Those aim to improve transparency and comparability of information across all benchmarks.
A 2-pager that summarises the key aspects of the final report is also available.
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Final Report on Climate Benchmarks and Benchmarks' ESG Disclosures - EN
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This paper investigates the divergence of environmental, social, and governance (ESG) ratings between five prominent rating agencies. The paper traces the disagreement of ESG categories and decomposes the overall divergence into three sources: Scope divergence related to the selection of different sets of categories, measurement divergence related to different assessment of ESG categories, and weight divergence related to the relative importance of categories in the computation of the aggregate ESG score.
The authors find that measurement divergence explains more than 50 percent of the overall divergence. Scope and weight divergence together are slightly less important. The results allow investors, companies, and researchers to understand why ESG ratings differ.
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This study by Vontobel Asset Management commissioned a survey of 4,600 people in 14 countries to find out what they think about sustainable investing. The survey found that although investors follow sustainable principles in their daily lives, their awareness of sustainable investment opportunities remains limited.
Regional case studies for DACH, Germany, Italy, Spain, Switzerland and the United Kingdom can be accessed here (scroll down).
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Based on a survey conducted among asset managers operating in Switzerland, the IFZ/AMP Asset Management Study 2019 provides an overview of the scope and breadth of the Swiss asset management industry, capturing the facts, current industry dynamics as well as the most important challenges and opportunities faced by Swiss-based asset managers. Moreover, in the context of a PEST analysis, the political, economic, social, and technological environment is analyzed with the aim to highlight the most important developments affecting the industry.
Among other findings, the analysis showed that Swiss-based asset managers see large opportunities in sustainable investments .
An executive summary can be download in German and French.
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This UK strategy recognises the role of the financial sector in delivering global and domestic climate and environmental objectives. It sets out the proposals for green finance at the heart of delivering the UK’s Clean Growth Strategy, 25 Year Environment Plan and Industrial Strategy, and how the proposals support the UK’s economic policy for strong, sustainable and balanced growth
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In dieser Studie hat der WWF Österreich gemeinsam mit der Ratingagentur ESG Plus die zehn größten österreichischen Retailbanken untersucht. Unternehmensführung, Sparen und Anlagen sowie Kredite und Finanzierungen wurden auf konkrete Aktivitäten im Bereich Nachhaltigkeit analysiert und bewertet. Das Ergebnis zeigt, dass den 10 größten Akteuren des österreichischen Bankwesens eine klare Vision fehlt, um eine sichere und erstrebenswerte Zukunft für Österreich und den Planeten mitzugestalten.
Eine Kurzfassung der Studie finden Sie hier, die Vollversion kann via untenstehendem Link geöffnet werden.
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WWF Rating des Österreichischen Retailbankings 2018/2019 - DE
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The international community set itself the goal of limiting the rise in global warming to 2°C by 2100. To reach this target, societies must rethink and transform the way they operate, especially with regard to carbon dioxide emissions. Can finance help the world rise to the challenge?
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Practitioner Roundups Special Issue: Can Finance Make the Planet Greener? - DE
Practitioner Roundups Special Issue: Can Finance Make the Planet Greener? - FR
Practitioner Roundups Special Issue: Can Finance Make the Planet Greener? - IT
Practitioner Roundups Special Issue: Can Finance Make the Planet Greener? - EN
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The new edition of the Best Practice Principles for Shareholder Voting Research & Analysis was launched in July 2019, after a two-year consultation period by the group of five firms that sponsor them.
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Best Practice Principles for Providers of Shareholder Voting Research & Analysis 2019 - EN
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This document details the key steps regarding impact analysis, target setting & implementation, and accountability a bank needs to take to ensure the effective implementation of the Principles for Responsible Banking.
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Principles for Responsible Banking: Key Steps to be Implemented - EN
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This document sets out the 6 Principles and the preamble of the Principles for Responsible Banking (PRB) .
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This briefing paper aims to help investors and banks understand how they could use Internal Carbon Pricing (ICP) in their decision-making, specifically for their investment and lending practices.
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This document is a technical supplement to the April 2019 NGFS Comprehensive report. The supplement provides an overview of existing approaches for quantitatively assessing climate-related risks and identifies key areas for further research. It also sets out a menu of options for central banks and supervisors to assess the risks.
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Macroeconomic and financial stability: Implications of climate change - EN
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In the 2019 edition of the Swiss Sustainable Investment Market Study, SSF provides in-depth insights into recent market developments. The study reveals a sharp increase in the total volume of sustainable investments, again highlighting the growing importance of sustainability in the Swiss financial industry.
The full report is available in English and summaries in German and French.
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Swiss Sustainable Investment Market Study 2019 - DE
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The Official Monetary and Financial Institutions Forum (OMFIF) publishes several reports a year, covering key themes in current economic and financial issues. In this edition, OMFIF discusses the increasing attention that Central Banks are giving to climate change.
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