Digital library on sustainable finance
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This whitepaper evaluates the investment performance of ESG, paying particular attention to recent performance and highlighting the difference between ESG scores that overlap with traditional risk model factors and those that don’t. The analysis indicates that, in general, increasing exposure to ESG rarely underperforms the market, and often outperforms the market, especially during the last few years.
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The academic and policy debate regarding the role of central banks and financial regulators in addressing climate-related financial risks has rapidly expanded in recent years. This Perspective presents the key controversies and discusses potential research and policy avenues for the future. Developing a comprehensive analytical framework to assess the potential impact of climate change and the low-carbon transition on financial stability seems to be the first crucial challenge. These enhanced risk measures could then be incorporated in setting financial regulations and implementing the policies of central banks.
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Climate change challenges for central banks and financial regulators - EN
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This report presents findings from the Global Impact Investing Network’s eighth Annual Impact Investor Survey. These findings reflect 229 respondents’ perspectives on the growth and development of the impact investing industry. The report includes analysis of respondents’ investment activity, asset allocations, impact measurement practices, and performance. For the first time, the report also presents trends analysis for a subset of 82 respondents that participated in the survey in 2013 and again this year. Major market developments over the course of 2017 are also described throughout the report. Key Findings:
- The market is diverse
- The impact investing industry is growing
- Impact investors demonstrate a strong commitment to measuring and managing impact
- Overwhelmingly, impact investors report performance in line with both financial and impact expectations
- Impact investors acknowledge remaining challenges that need to be addressed within the industry
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The 2018 edition, subtitled "Investment and New Industrial Policies", looks at the investment policy dimension of industrial policies. A global survey carried out for the Report shows that, over the past 10 years, more than 100 economies across the developed and developing world have adopted formal industrial development strategies, with acceleration in the last five years. Industrial policies are a key driver of investment policy measures; 90% contain specific measures, such as incentives, special economic zones, investment facilitation, performance requirements and investment screening mechanisms. The Report argues that modern industrial policies, especially those aimed at positioning for the new industrial revolution, call for a strategic review of investment policies.
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This 2018 briefing provides data gathered from a survey of affluent and high-net-worth people who give to charity to understand their interest in, knowledge of and experience with impact investing. Impact investing is catching on, particularly with Generation X and Millennials. However, the terminology of impact investing is not yet well known or understood—even by those who are making investments that can be categorized as impact investments. Investors are interested in both simple and sophisticated options for impact investing. Basic education on impact investing and guidance from financial advisors would most encourage investors to make an impact investment. Investors would consider making impact investments with assets set aside for retirement, for charitable giving or for other purposes. There is an opportunity for financial advisors to initiate a conversation about impact investing and provide much needed and valued expertise. Also, there is a gender gap in impact investing.
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This discussion paper explores why investors should contribute to the ‘just transition’ and how they can do so. It is the first output of the Investing in a Just Transition project, co-designed by the Grantham Research Institute on Climate Change and the Environment and the Initiative for Responsible Investment. The project will be delivered in partnership with the Principles for Responsible Investment and the International Trade Union Confederation. The purpose of this initial paper is to offer our emerging insights and seek readers’ inputs and feedback for the project’s next phase.
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The discussion paper aims to pave the way for the development of a framework for assessing and moving forward the “contribution of green bonds to scaling up the investments in green projects”. The paper focuses on the case of ‘Use-of-Proceeds Green Bonds’ (UoP GB) that represent 95% of the market in 2016. It discusses the link between increasing investment in UoP-GB on the one hand, and the growth of investments in green projects by issuers on the other hand, suggesting how this approach can be enhanced to achieve further impact.
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Based on interviews with 22 leading asset owners, this report explores the current best practices landscape, identifies barriers, and presents a framework of ten building blocks for other asset owners introducing and developing climate strategies. Our discussions covered a range of themes including the Task Force on Climate-related Financial Disclosures (TCFD) framework, culture, purpose, education, engagement, investment strategies, barriers, priorities looking forward, and practical advice for other asset owners.
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The report shows that Switzerland has already firmly established the UN's Sustainable Development Goals in its policies, although challenges still remain. It is in Switzerland's interests to contribute to the financing of sustainable development – through its official development assistance, but increasingly through strategic partnerships and the mobilisation of private resources for sustainable development.
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Switzerland implements the 2030 Agenda for Sustainable Development - DE
Switzerland implements the 2030 Agenda for Sustainable Development - FR
Switzerland implements the 2030 Agenda for Sustainable Development - IT
Switzerland implements the 2030 Agenda for Sustainable Development - EN
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In part 4 of the paper, the authors analyze extend their analysis of ESG integration across various types of equity protfolios to factor-based and active allocations. The chapter explores how asset owners and asset managers effectively integrate ESG into factor-based and actively managed allocations.
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Foundations of ESG Investing Integrating ESG into Passive Institutional Portfolios (pdf 972.8 kB)Summary
Switzerland was actively involved in developing and shaping the 2030 Agenda and its 17 goals. The goals can be achieved only through a concerted effort by the international community and the participation of all important stakeholders. Switzerland is ready to do its bit, both at a global level and through concrete measures domestically.
The present report is the first comprehensive review of the current status of implementation of the 2030 Agenda (baseline assessment) from the perspective of the Federal Administration. It documents achievements and successes and identifies challenges.
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Baseline assessment of Switzerland serving as basis for the country report 2018 - DE
Baseline assessment of Switzerland serving as basis for the country report 2018 - FR
Baseline assessment of Switzerland serving as basis for the country report 2018 - IT
Baseline assessment of Switzerland serving as basis for the country report 2018 - EN
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This paper charts the rise in interest towards ESG investing. At the same time, the authors warn that the challenge facing ESG investing is the lack of standardisation and the mixed quality of information of all three domains, especially the S domain. By drawing on internationally recognized human rights standards, the S can be strenthend, thereby improving the robustness and comparability of ESG aggregations.
The publication is aimed at investors, issuers, and human rights advocates alike.
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Money, Millennials and Human Rights: Sustaining ‘Sustainable Investing’ - EN
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This Climate Finance Policy Brief aims to demonstrate how new finance tools that build on the mandate of central banks can help the Tanzanian government to overcome these challenges. Thereby, Tanzania can not only harvest the first mover advantage, but also pioneer implementation of the Paris Agreement and Agenda 2030, particularly SDG7.
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The 16th edition of Mercer’s European Asset Allocation Report gathered information from institutional investors across 12 countries, reflecting total assets of around €1.1 trillion. The survey revealed that more European pension funds are considering the investment risks posed by climate change.
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There is substantial growth potential for green lending, also in developing countries where energy demand is growing at the fastest rate. To access it, however, it is essential to understand how green lending works and what is needed to promote it. To support partner institutions in this endeavor, GCPF presents a practical guide for practitioners.
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GCPF_Green_lending_Booklet_for_Banks_WEB_EN (pdf 866.0 kB)Summary
Das Buch „Geldanlagen und Investoren hinterfragen - Finanzen als Hebel für eine zukunftsfähige Ökonomie und Gesellschaft“ geht auf die Fragen ein welche Bedeutung nachhaltige Geldanlagen und verantwortliche Kapitalanlagen für Gesellschaften und Ökonomien haben, und warum sich Journalistinnen und Journalisten damit befassen sollten. Die Autorin gibt unter anderem Anhaltspunkte dafür, wie man bei Recherchen, in Pressekonferenzen und Interviews andere, neue Fragen stellen kann.
Das PDF ist für 16 Euro erhältlich und die Erträge aus dem Verkauf fließen in die Arbeit des gemeinnützigen Netzwerk Weitblick e.V.
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In Part 2 of this paper, MSCI examines four key criteria for an index that serves as a benchmark, whether at the total portfolio level or for individual allocations. They test whether ESG indexes can be used for these purposes, using a “best-in-class” approach index that selects index constituents with strong ESG ratings and an index with a re-weighting methodology that relies on ESG ratings and changes in ESG ratings. While not indicative of future performance, these ESG indexes enhanced risk reduction and led to better risk-adjusted returns during the study period. While the best-in-class methodology had stronger ESG characteristics than the tilted approach, the former had a narrower investment universe.
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Foundations of ESG Investing Part 2: Integrating ESG into Benchmarks - EN
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This survey utilises the framework provided by the Task Force on Climate-related Financial Disclosures (TCFD) to benchmark responses from the world’s 80 largest insurers to the AODP survey on climate-related risks and opportunities. As such, the organisation hopes to contribute to the debate surrounding the role of the insurance sector in addressing climate change, resulting in real improvements across the sector. The survey also offers recommendations to both regulators and insurers.
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This analysis reviews the progress made by the national regulatory agencies of G20 members in making the recommendations relevant to their national contexts. It considers actions taken by the national (and international in the case of the EU) regulatory authorities in underlining the relevance, and taking steps towards potential implementation, of the TCFD recommendations.
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Asset owners will need high-quality and timely data on climate-related risks to help guide them through the energy transition. The FSB Taskforce on Climate–Related Financial Disclosures (TCFD) provide a global framework to translate non-financial information into financial metrics. The TCFD has been endorsed by over 238 companies, including 150 financial institutions representing a combined market capitalisation of over US$6 trillion and US$81.7 trillion assets under management. Yet, what would adopting the TCFD recommendations mean in practice for asset owners?
This publication provides technical guidance on:
- actions for asset owners;
- example of peer asset owner practice on implementing the TCFD recommendations and reducing exposure to climate risk;
- questions to engage consultants or fund managers on TCFD;
- climate scenarios.
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Implementing the TCFD recommendations: a guide for asset owners - EN
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This paper gives an overview of the current developments in the Green Bond Market. Following an unbridled winter, the green bond market shifted towards a more tentative pattern of issuance growth through the spring, with brighter growth prospects emerging from some slightly overcast patches by April. The report's 2018 base-case issuance scenario is maintained at USD 175 bn for 2018, with the possibility to surprise to the upside once again and cross to USD 210 bn.
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Part 3 of the research paper series focuses on how ESG can be integrated into passive allocations using MSCI ESG Ratings. While not indicative of future results, the MSCI ESG Ratings provided better risk-adjusted returns from August 2010 to December 2017 than the MSCI ACWI Index. MSCI used existing best-in-class selection-based index methodologies for the creation of hypothetical global and regional passive allocations. In the global and regional allocations, the authors found that ESG integration led to a reduction in risks and an increase in valuations compared to their respective parent index.
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Foundations of ESG Investing. Part 3: Integrating ESG into Passive Institutional Portfolios - EN
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Under the Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (FMIA), the Regulatory Board determines what information needs to be published so that investors are able to evaluate the characteristics of securities and the quality of issuers. Internationally recognised standards are taken into account (Art. 35 para. 2 FMIA). The information to be published includes details on the management and control mechanisms at the highest corporate level of the issuer (Corporate Governance).
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Directive on Information relating to Corporate Governance - DE
Directive on Information relating to Corporate Governance - EN
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Um ihrer gesellschaftlichen Verantwortung nachzukommen und Erwartungen von Anspruchsgruppen zu erfüllen, beziehen sich Unternehmen häufig auf international akzeptierte und legitimierte CSR-Standards. Unter diesen Standards nehmen die OECD-Leitsätze für multinationale Unternehmen eine besondere Stellung ein. Durch die nationalen Kontaktpunkte (NKP) - in der Schweiz das Staatssekretariat für Wirtschaft (SECO) - und ein entsprechendes Beschwerdeverfahren, verfügen die Leitsätze über eine einzigartige hoheitliche Komponente.
Mit der nachfolgenden Studie wollen das SECO sowie die DEZA den Stellenwert der OECD-Leitsätze und des NKPs für Schweizer Unternehmen ermitteln. Zugleich wurden Informationen über den Bedarf an Unterstützung für Unternehmen bei der Umsetzung der OECD-Leitsätze erhoben.
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OECD_Leitsätze_Brochure_DE (pdf 3.9 MB)OECD_Principes_Directeurs_Guide_FR (pdf 9.3 MB)
OECD_Guidelines_Brochure_EN (pdf 4.8 MB)
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This is the first time Swiss Sustainable Finance (SSF) provides its own comprehensive market overview of sustainable investments in Switzerland. The study highlights the growing importance of sustainability within the Swiss financial community and sheds more light on the background and drivers for this development.The market study also includes case studies from two large asset owners (Migros Pension Fund and Geneva Cantonal Pension Fund CPEG), interviews from the Federal Office for the Environment (FOEN) and the State Secretariat for International Finance (SIF), and a comprehensive chapter on regulatory issues applying to Switzerland as well as globally.
The full report is available in English and summaries in German and French.
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Swiss Sustainable Investment Market Study 2018 - DE
