Digital Library2020-01-22T13:59:48+00:00

Resources

DIGITAL LIBRARY

Our Digital Library contains an extensive range of resources and research on sustainable and responsible investing, searchable by theme, publication type and year. Powered by SIF Ireland and Swiss Sustainable Finance.

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Title Author Published
Final Report on Climate Benchmarks and Benchmarks’ ESG Disclosures EU Technical Expert Group on Sustainable Finance Sep 2019
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Summary

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.

2-pager that summarises the key aspects of the final report is also available.

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Forecast Policy Scenario: Macroeconomic results UNPRI Sep 2019
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Summary

Summary

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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Sustainable Financing and Investing Survey 2019. Markets alert to the environment and society HSBC Sep 2019
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Summary

Summary

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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The Inevitable Policy Response: Policy Forecasts UNPRI Sep 2019
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Summary

The Inevitable Policy Response: Policy Forecasts

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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Financing the Low-carbon Future. A private-sector view on mobilising climate finance Climate Finance Leadership Initiative Sep 2019
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Summary

Summary

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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Insuring a Low-Carbon Future. A practical guide for insurers on managing climate-related risks and opportunities ShareAction Oct 2019
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Summary

Summary

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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IIF Sustainable Finance Working Group Report: The Case for Simplifying Sustainable Investment Terminology Institute of International Finance (IIF) Oct 2019
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Summary

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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A sustainable and responsible investment guide for central banks’ portfolio management Network for Greening the Financial System (NGFS) Oct 2019
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Summary

Summary

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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IOPS Supervisory Guidelines on the Integration of ESG Factors in the Investment and Risk Management of Pension Funds International Organisation of Pension Supervisors (IOPS) Oct 2019
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Summary

Summary

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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Fiduciary Duty in the 21st Century – Final Report Principles for Responsible Investment (PRI) Oct 2019
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Summary

Summary

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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Due Diligence for Responsible Corporate Lending and Securities Underwriting OECD Nov 2019
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Summary

Summary

This report by climate-change think tank InfluenceMap analyses the world’s 15 largest investment institutions, with $37 trillion in assets under management, and found that they are collectively deviating from the “Paris-aligned” allocations needed to reach the Paris Agreement goal of stopping global temperatures rising by 2°C. The report found $8.2 trillion invested in four top-polluting industries: oil and gas, coal mining, automobiles and electric power. While the Paris-misalignment of oil & gas should not come as a surprise, widely held automative and electric utilities sectors remain seriously out of line on climate.

Increasingly, forceful engagement with companies in these sectors must occur if the finance sector wishes to align its portfolios with Paris Agreement. However, the study found that investor-company engagement is often opaque and ill-defined. Only three big firms ― UBS Asset Management, Allianz and Legal & General ― “strongly and consistently engage with the companies they invest in to align their business models with Paris targets.”

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Asset Managers and Climate Change. How the sector performs on portfolios, engagement and resolutions Influence Map Nov 2019
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Summary

Summary

This report by climate-change think tank InfluenceMap analyses the world’s 15 largest investment institutions, with $37 trillion in assets under management, and found that they are collectively deviating from the “Paris-aligned” allocations needed to reach the Paris Agreement goal of stopping global temperatures rising by 2°C. The report found $8.2 trillion invested in four top-polluting industries: oil and gas, coal mining, automobiles and electric power. While the Paris-misalignment of oil & gas should not come as a surprise, widely held automative and electric utilities sectors remain seriously out of line on climate.

Increasingly, forceful engagement with companies in these sectors must occur if the finance sector wishes to align its portfolios with Paris Agreement. However, the study found that investor-company engagement is often opaque and ill-defined. Only three big firms ― UBS Asset Management, Allianz and Legal & General ― “strongly and consistently engage with the companies they invest in to align their business models with Paris targets.”

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Leveraging the Potential of ESG ETFs for Sustainable Development UNCTAD Nov 2019
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Summary

Summary

Achieving the United Nations Sustainable Development Goals (SDGs) will require at least an extra $2.5 trillion a year, between 2015 and 2030. In order to bridge this investment gap, investment vehicles with an ESG or SDG dimension will play an important role. One vehicle that offers this potential is ESG ETFs — exchange traded funds (ETFs) based on corporate environmental, social and governance (ESG) factors.

This report, released by UNCTAD in cooperation with Conser and TrackInsight, aims to provide an overview of the ESG ETF landscape, examine the main drivers behind the rapid rise of ESG ETFs in recent years and discuss possible actions that can be taken by key stakeholders to grow ESG ETFs into a mass market financial vehicle for sustainable development.

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The Impact of ESG Investing in Emerging Market Equities Candriam Nov 2019
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Summary

Summary

This report looks at whether ESG factors add to, detract from, or have no effect on financial return for Emerging Market (EM) equities. Based on a decade of historical data, the authors analyse the risk/return profile of the Candriam ESG Emerging Markets universe.

The study found that over the period with sufficient testable historical data, an approach combining governance, controversy risk analysis and exposure to sustainability themes enhanced investment performance in emerging markets equities in ten out of eleven years (April 2008 through October 2018).

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Climate risk assessment of the sovereign bond portfolio of European insurers Battiston S., Jakubik P., Monasterolo I., Riahi K. , & van Ruijven B. Dec 2019
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Summary

Summary

This publication is a collaboration between climate economists, climate financial risk modellers and financial regulators, and applies the CLIMAFIN framework described in Battiston at al. (2019) to provide a forward-looking climate transition risk assessment of the sovereign bonds’ portfolios of solo insurance companies in Europe. It was published in the European Insurance and Occupational Pensions Authority (EIOPA) December 2019 Financial Stability Report.

The authors consider a scenario of a disorderly introduction of climate policies that cannot be fully anticipated and priced in by investors. They find that the potential impact of a disorderly transition to low-carbon economy on insurers portfolios of sovereign bonds is moderate in terms of its magnitude, but non-negligible in several scenarios. Thus, climate policy scenarios should be regularly monitored and assessed given the importance of sovereign bonds in insurers’ investment portfolios.

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Nature is too big to fail. Biodiversity: the next frontier in financial risk management WWF Switzerland and PwC Switzerland Jan 2020
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Summary

Summary

This report published by WWF Switzerland and PwC Switzerland finds that the financial risks associated with the loss of biodiversity will become increasingly important in 2020. As climate change and the loss of biodiversity mutually reinforce each other, decision-makers face a huge challenge to respond to this double crisis, as the risk of financial market instability significantly increases.

The report suggests a typology of four financial biodiversity-related financial risks: physical, transition, litigation and systemic risks. The report further highlights what can be learnt from the discussions around climate-related financial risks, provides a framework on how to integrate biodiversity losses into the classical risk framework of financial institutions and also includes recommendations to financial regulators/central banks, financial market players and states/international organisations.

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Demystifying Responsible Investment Performance UNEP FI & Mercer Nov 2007
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Summary

A review of academic and broker research on ESG factors

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Shedding Light on Responsible Investment: Approaches, Returns and Impacts Mercer Oct 2009
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Summary

Review of academic and commercial studies finding that, on average, the evidence is in favour of responsible investment adding value.

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Sustainable Investing – Establishing long-term value and performance Deutsche Bank Jun 2012
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Summary

Comprehensive literature review of sustainable investment concluding that CSR and ESG factors are correlated with superior investment returns at a securities level, though exclusionary approaches to sustainable investment have a neutral impact on investment returns at a fund level.

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Mapping Sustainable Finance in Switzerland onValues Jan 2013
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Summary

This study finds more than 200 organisations involved in Sustainable Finance in Switzerland in one way or another, and maps the different initiatives in an all-encompassing overview.

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