2. 2
CONTENTS
CHANGING FINANCE, FINANCING CHANGE
• Sustainable finance in context
• What is UNEP Finance Initiative?
• How are Financial institutions working towards sustainable
finance?
• Banking
• Insurance
• Investment
• Opportunities in Eastern Europe – Ecosystems, Climate Change
• Energy efficiency
• Regional Roundtable for Europe 2017
3. 3
SUSTAINABLE FINANCE AGENDA
IN CONTEXT
PARIS AGREEMENT
Limit temperature increase to
1.5-2˚C above pre-industrial
levels.
SUSTAINABLE
DEVELOPMENT GOALS
17 goals for Sustainable
Development by 2030.
Contribution to international policy objectives.
4. 4
SUSTAINABLE FINANCE AGENDA IN CONTEXT
• Mounting environmental issues are changing business operating
environment (pollution, resource depletion).
• Financial sector plays key role in economic development
(commercial banks hold 90-95% of financial sector assets)
• Better risk management and optimizing business opportunities
• $22.89 trillion of assets managed under responsible investment
strategies (2016 Global Sustainable Investment Review).
• Environmental Social and Governance (ESG) integration is the
systematic and explicit inclusion of material ESG factors into
investment analysis and investment decisions.
• Long-term value creation and prudence – from sustainable
financial products and services to sustainable financial
institutions.
• FSB Task Force on Climate-Related Financial Disclosures
recommendations apply to financial sector, including banks,
insurance companies, asset managers, and asset owners.
TCFD: “Large asset owners and asset managers sit at the
top of the investment chain and, therefore, have
an important role to play.”
5. Partnership between UN Environment and
financial sector to support the global
development of financial institutions that
integrate sustainability as a wealth creation
driver and which contribute to the UN
Sustainable Development Goals through
their financing activities.
WHAT IS UNEP FI?
6. HOW ARE FINANCIAL INSTITUTIONS
WORKING TOWARDS SUSTAINABLE
FINANCE?
Leadership:
• Collaborative projects to
develop and pilot new tools /
guidance
• Cutting-edge research
• Policy engagement
• Leadership initiatives
• Platform for innovation and
first movers, e.g. Portfolio
Decarbonization Coalition –
28 asst owners and
managers allocating capital
towards low-carbon
economy to decarbonise
USD 600 billion.
6
Knowledge development
• Hands-on guidance on
sustainable banking, such
as Guide to Banking and
Sustainability
• Trainings, e.g.
environmental and social
risk management
• Case studies and best
practice
• Tools, e.g. human rights
• Peer exchange
7. Project to support banking sector in developing green and inclusive
financial products and services for achieving national development
goals. Key UN Environment activities included:
• Sustainable Finance Forum
• Working group and market study on developing green credit fund
• Policy briefs and engagement with policymakers on green finance
• Feasibility study to identify opportunities to integrate green
economy concepts, green modelling, and sustainable finance in
national education programmes
• Training
SUSTAINABLE FINANCE IN MONGOLIA
INDUSTRY: BANKING
8. Financial Stability Board: Task Force on Climate-Related
Financial Disclosure
• Strong Political Signaling
• Recommendations strongly focus on forward-looking
assessment of climate risks and opportunities
Not just about climate resilience. Financial institutions will
better understand where and how to adapt their strategies and
portfolios to benefit from financing the future we want
BANKS PILOTING TCFD
RECOMMENDATIONS
Pilot Project:
• Group of 8-12 first-mover banks
• Jointly work towards implementing the TCFD recommendations
and develop the scenarios, models, indicators, and
methodologies needed
CLIMATE CHANGEINDUSTRY: BANKING
9. y
stor
le
Over USD 30 trillion
global assets
under management
ver USD 5 trillion
orld premium volume
Linking insurance industry and policy agendas
through research and market practice
• Sustainable Insurance Forum for Regulators
and Supervisors (SIF)
• Global sustainable insurance underwriting
guidelines
• Insurance Development Goals linked to
UN Sustainable Development Goals
• PSI and ICLEI to set global agenda for
insurers and cities to shape resilient,
sustainable urban future.
INDUSTRY: INSURANCE
10. 10
SUPPORTING More Transparent And Sustainable
Capital Markets
Sustainable Stock Exchanges (SSE) initiative
• 63 Partner Stock Exchanges, Includes Belarus,
Kazakhstan, Latvia, Lithuania, Belgium, Estonia,
Romania, Poland, Germany, France, Turkey, UK,
Spain, Norway, Sweden, Luxembourg.
• 1 Investor Working Group
• 1 Corporate Working Group
• 4 UN partner organizations
Stock exchanges globally list over USD 70 trillion of
market cap. 70% of listed equity market in SSEI.
LSE: Guidance for
issuers on the
integration of ESG into
investor reporting and
communication
(February 2017)|
INDUSTRY: INVESTMENT
• 12 stock exchanges have Environmental, Social and Governance
(ESG) disclosure listing requirements
• 15 provide guidance on ESG corporate disclosure
• 38 provide ESG indices
• 11 list green bonds
11. 11
OPPORTUNITIES IN
EASTERN EUROPE
Potential for GEF funding to expand ecosystems work to
Eastern Europe
Quantifying natural capital risk in financial terms - database of
natural capital dependencies by industry sector to create
regional or sectoral natural capital heat maps for financial
institutions. Funded by the Swiss State Secretariat for
Economic Affairs (SECO), the MAVA foundation, FIs.
Countries seeking UNEP FI support to help Financial
Institutions Access Green Climate Fund
• Currently low number of accredited financial
intermediaries from developing countries due to capacity
and awareness limitations.
-> UNEP FI proposal for new initiative to help financial
institutions directly access the GCF.
-> Technical assistance to help 20 National Designated
Authorities include financial institutions in GCF country
strategic frameworks.
12. • Support NDAs in process to nominate FIs for GCF
accreditation
• Support NDAs in identifying and prioritising funding
proposals
• Help developing countries directly access the GCF
through their financial institutions by:
Raising financial institutions’ awareness.
Capacity building to develop financial institutions’
knowledge on financing mitigation and adaptation
Helping financial institutions become GCF accredited.
Supporting financial institutions in developing funding
proposals for direct access to GCF funding.
Technical assistance and targeted grant support to 20
financial institutions.
CLIMATE CHANGEOPPORTUNITIES IN
EASTERN EUROPE
13. ENERGY EFFICIENCY: G20 INVESTMENT AND
UNDERWRITING TOOLKITS 2017
• Promoting supportive policies for
energy efficiency investment as
part of the G20 Energy Efficiency
Finance Task Group
• USD 4 trillion of investor assets
+ 122 banks commit to further
embed energy efficiency finance
into business
• UNEP FI, one of the three partners
of the G20 Toolkit, led the
production of the section on private
finance.
G20 Energy Efficiency Finance Task Group;
International Energy Agency (IEA), UNEP FI and
the International Partnership for Energy Efficiency
Collaboration (IPEEC).
14. SCALING UP SUSTAINABLE FINANCE
ACROSS BANKING, INSURANCE AND
INVESTMENT IN EUROPE
GENEVA, 16-17 OCTOBER 2017
Insights into sustainable finance leadership.
Emerging knowledge and good practice
Highlight issues on the horizon
Explore future policy direction and market practice to
shape the industry.
Convene financial institutions and key stakeholders
Celebrate 25 years of sustainable finance
CONTACT: Liesel van Ast at liesel.vanast@un.org
Editor's Notes
The International Energy Agency estimates that between 2015 and 2030 investment in the order of USD16tn will be required to realign the global energy system with a 2 degrees limit. When the effects of a growing global population and middle class are considered, between 2015 and 2030, the demand for new, sustainable infrastructure could exceed $90 trillion. Ensuring this infrastructure does not lock-in a higher emissions trajectory but instead supports the transition to a low-carbon economy is estimated to have a net incremental cost of around USD4trillion . In the buildings sector alone meeting the Paris commitments will require about $300 billion annually by 2020 for financing energy efficiency retrofits. According to the 2015 Climate Policy Initiative report, ‘Global Landscapes of Climate Finance 2015’, in 2014 a little over that amount, USD391 billion, was invested in all low-carbon and climate resilient actions, just a fraction of the required overall amount.
Collaborative Projects to Develop and Pilot new Tools and Approaches (examples: Drought Stress Testing, TCFD Project)
Cutting-Edge Research (Fiduciary Duty in the 21st Century, Portfolio Carbon Measurement)
Leadership initiatives: Principles for Responsible Investment, Sustainable Stock Exchange Initiative, Natural Capital Finance Alliance, Portfolio Decarbonization Coalition
Policy Engagement (Secretariat G20 EE Working Group, TCFD members, strong voice for members at the Climate Negotiaations)
What is the Guide to Banking and Sustainability?
The Guide to Banking and Sustainability (“Guide”) is a high-level, functional overview of what a sustainable bank looks like from inside and to the outside.
Who and what is it meant for?
The Guide is first and foremost a tool for banking practitioners themselves. It is meant as an awareness-raising, integration and outreach tool for:
Senior management and board members seeking to educate themselves and their employees on banking and sustainability
Sustainability teams seeking to engage employees across the bank
Employees seeking to understand the relevance of sustainability issues to their work
Employees who are engaging with external shareholders and stakeholders on sustainability expectations, risks, inquiries, and other matters
It will also be a useful tool for a number of stakeholders, including:
Banking associations seeking to understand and promote sustainability among their membership
Banking regulators and supervisors interested in understanding and promoting banks’ roles in preserving the banking system’s safety and soundness vis-a-vis environmental and social risk drivers
Anyone from the policy-making sphere to civil society, to the corporate sector and the general public who is interested in understanding how the worlds of banking and sustainability are connected in practice
The SSE initiative was launched in NYC in 2009.
Exponential growth since the launch of SDG and Paris Agreement (3X)
What we do:
We campaign for exchanges to adopt voluntary reporting requirements and provide guidance to their listed companies on ESG reporting. We engage regulators to bring the voice of exchanges that would like to see more «mandatory» action.
We promote Green Finance and the Sustainable Development Goals with exchanges that either lead by example or support the financing of the SDGs through innovating instruments and platforms.
The G20 Energy Efficiency Investment Toolkit includes:
An assessment of current energy efficiency investment by sector and region;
A showcase of countries’ good practice exchanges on enabling national policy framework design, to mobilise and channel finance to energy efficiency investments, and implementing the voluntary Energy Efficiency Investment Principles for G20 participating countries;
A report on “best in class” instruments and approaches to encourage and enable more financing from different types of private sector financial institutions (banks, long-term investors and insurance companies);
A joint consensus among public banks and development institutions around “best in class” instruments and approaches to scaling-up their energy efficiency activities.