Mainstreaming Climate in Financial Institutions
External Partner Newsletter - May 2018
|
|
|
Dear colleagues and friends of the Climate Action in Financial Institutions Initiative,
In March, the Climate Action in Financial Institutions Initiative organised its first Annual Assembly, hosted by HSBC in Paris. Following these discussions:
- the Supporting Institutions Assembly adopted new governance statutes;
- a 2018 action plan is under discussion and will be presented soon;
- the website was restructured and now includes a Climate Mainstreaming Resource Center;
- this internal newsletter was reshaped to facilitate knowledge sharing and ensure the dissemination of practices and lessons learnt.
Lastly, we are very pleased to announce that two new Supporting Institutions have joined the Initiative, which now gathers 40 financial institutions:
|
|
General Data Protection Regulation (GDPR)
|
|
|
The Climate Action in Financial Institutions Initiative complies with the new requirements of the General Data Protection Regulation (GDPR or GDPR). We use your email address to send you information through our newsletters. To continue to receive them, you must update your preferences.
|
|
 In November 2017, the French Development Agency (AFD) adopted its 3rd Climate and Development Strategy. This strategy is driven by the ambition for AFD Group’s activities to be consistent with the Paris Agreement. As such, the strategy proposes four major commitments (ı) ensure a 100% Paris Agreement-compatible activity, (ıı) increase the volume of climate finance, (ııı) contribute to redirecting finance and investment flows, and (ıv) co-build solutions and bring influence to bear on standards.
During the Work Stream 4 workshop held last March in Paris, Damien Navizet, Head of AFD’s Climate Change Division presented the internal process, which led to the adoption of this strategy.
Lessons learnt from this experience:
The most striking feature of this new strategy is that it set the objective for the AFD Group to be “100% compatible” with the Paris Agreement, in addition to the target of 50% of total financing that goes to projects with climate co-benefits in terms of mitigation and/or adaptation. This involves progressing from an approach based mainly on an assessment of the benefits of projects with direct climate co-benefits and on a selectivity policy for highly emissive projects, towards an approach that includes seeking and characterizing the consistency of all interventions with low-carbon and climate-resilient development pathways.
Damien Navizet, noted the following key drivers for mainstreaming its climate strategy:
- A sustained leadership vision for climate change in the last 15 years
- Specific objectives such as the 50% target in terms of climate co-benefits
- The international climate agenda and the COP21 context that helped build political momentum
- Increased recognition of the opportunities linked to climate action and improved understanding of physical and transition risks.
- A team, which includes the climate unit but also referees across the institution’s different divisions. The role of the climate team being to ensure overall consistency.
- Time and expertise. Though it is never over as new issues are constantly emerging, such as climate related financial risks.
|
|
|
Latest case studies added to the
Climate Mainstreaming Practices Database
|
|
|
HSBC Sustainability Leadership Programme
In 2009, HSBC committed to training senior managers across all areas of its global business, as well as external stakeholders (such as strategic supply chain partners and key clients), on a 5-day experiential based Sustainability Leadership Programme (SLP).
|
|
|
TSKB’s Turkey & CEEMEA regional Green/Sustainable Bond and Sustainable Subordinated Tier-II
In line with the Sustainability Committee’s targets of encouraging the industry in tackling climate change by new products, TSKB issued the first Green/Sustainable Bond in the Turkey & CEEMEA region and the world’s first Sustainable Subordinated Tier-II.
|
|
Latest items added to the Climate Mainstreaming Library
|
|
|
Flood risk for investors: are you prepared?
In this report, CICERO analyses the implications of flood risk for investors as flooding events become more extreme and more costly. Through four case studies CICERO demonstrates that “the industry sector is most exposed to direct flooding risk but other economic sectors can also be hit by flood, especially through indirect damage via transportation, communication and supply chain disruptions.” CICERO also warns that “there may be a systemic risk related to the insurance industry as some of the risk previously covered by the public sector through national insurance programs is being transferred to the private sector”. As a conclusion, CICERO provides two key recommendations for investors :
1) dialogue with companies to uncover potential vulnerabilities either in resiliency planning or insurance coverage;
2) consider new investment opportunities via technologies and services that can mitigate flood risk.
|
|
|
Extending our horizons – Outputs of a working group of 16 banks piloting the TCFD Recommendations
This report synthesizes the efforts of a Working Group of sixteen international banks (ANZ, Barclays, BBVA, BNP Paribas, Bradesco, Citi, DNB, Itaú Unibanco, National Australia Bank, Rabobank, Royal Bank of Canada, Santander, Société Générale, Standard Chartered, TD Bank Group and UBS) convened by the UN Environment Finance Initiative (UNEP FI) and supported by Oliver Wyman to develop a methodology for assessing the risks and opportunities associated with the transition to a low-carbon economy (the “transition-related” impacts associated with climate change).
|
|
“A Transition in Thinking and Action” speech by Mark Carney, Governor of the Bank of England
Mark Carney, Governor of the Bank of England delivered a speech at the International Climate Risk Conference for Supervisors, jointly organised by De Nederlandsche Bank, the Banque de France and the Bank of England, taking stock of the progress made in addressing climate-related financial risks since his 2015 speech “Breaking the tragedy of the horizon“. The speech aims at demonstrating that there has been a transition in thinking in the financial sector since 2015 but that there is an urgent need to move from a transition in thinking to action.
|
|
|
What is Sustainable Infrastructure? IDB framework to guide sustainability across the project cycle
This document written by the Inter-American Development Bank presents a framework for both public and private sectors to support planning, designing, and financing of infrastructure that is economically, financially, socially, environmentally, and institutionally sustainable. This framework forms the basis of the IDB Group working definition of sustainable infrastructure as “infrastructure projects that are planned, designed, constructed, operated, and decommissioned in a manner to ensure economic and financial, social, environmental (including climate resilience), and institutional sustainability over the entire life cycle of the project.”
|
|
Upcoming events
- Innovate4Climate - Frankfurt - May 22-24, 2018
Innovate4Climate 2018 will convene global leaders to work and dialogue on development of innovative financing instruments and approaches to support low-carbon, climate-resilient development pathways; mobilization of private investments in climate action; support to developing countries in their NDCs implementation; development of ideas on how market-based and non-market based climate finance instruments identified in the Paris Agreement can best be designed to maximize impact and minimize costs. Some of the Supporting Institutions of the Initiative are organizing workshops to present and discuss specific practices and tools.
- Green and Sustainable Bonds workshop - Lima - May 29, 2018
The Inter-American Development Bank, together with the Latin American Association of Development Financing Institutions (ALIDE) is organizing a workshop on green and sustainable bonds in Latin America and the Caribbean.
- Sustainable Finance Forum Luxembourg - May 30, 2018
The Sustainable Finance Forum Luxembourg, organised by Luxembourg for Finance, will address key regulatory and market challenges, the asset management industry’s role in sustainable investment, as well as how capital markets can contribute to a sustainable low-carbon economy. Afternoon panels will focus on sustainable products available on the market and investors’ demand, sustainability standards and reporting, as well as impact investments.
- “Towards a resilient financial sector: disclosing physical climate risk & opportunities” - EBRD - GCECA - London - May 31, 2018
This conference organised by EBRD and GCECA will bring together the financial, technical and policy perspectives to shape market action on climate resilience. The focus will be on improving financial sector awareness of climate risks and their impacts on investments, as well as facilitating the emergence of climate risk and resilience metrics, and identifying ways on which investors and businesses can integrate climate change intelligence into their business strategies and investment planning. If you are interested, please contact Franka Klingel: KlingelF@ebrd.com
- Responsible Investors Europe - London - June 5-6, 2018
This year’s 11th annual conference will focus on different issues related to the 5 voluntary Principles, such as the European Commission Action Plan on financing sustainable growth, scenario analysis in the TCFD recommendations or new models and approaches to finance sustainable infrastructures.
Forward look of major climate milestones
Sept. 12-17, 2018 Global Climate Action Summit - San Francisco
Sept. 12-14, 2018 PRI in person - San Francisco
Sept. 24-30, 2018 New York Climate Week
Oct. 12-14, 2018 Annual Meetings of the IMF and World Bank Group - Bali Nusa Dua, Indonesia
Nov. 13, 2018 5th OECD Forum on Green Finance and Investment - Paris
Nov. 26-28, 2018 UNEP FI’S 2018 Global Roundtable and Climate Finance Day - Paris
Dec. 3-14, 2018 COP24 - Katowice (Poland)
|
|
|
|
|
|
