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
The Paris Climate Agreement: Implications for banks, institutional investors, private equity and insurers University of Cambridge Institute for Sustainability Leadership; Environmental Resources Management Feb 2016
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Summary

The momentum established by the COP 21 Paris Agreement presents revenue risks and opportunities, as capital investment shifts from high to low carbon energy infrastructure and solutions. Financial intermediaries will and are already exposed to these trends, and abrupt changes could influence the overall financial stability. In order to reduce uncertainty over the energy transition and become masters of their own destiny, this reports summarizes the issues at hand and sets out some thoughts about a potential response.

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Financial Instruments for Managing Disaster Risks related to Climate Change OECD Feb 2016
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Summary

This article outlines potential implications of climate change for the management of financial risks. It identifies insurance as a mechanism to reduce the economic disruption of disaster events. In addition, it outlines policy approaches to aid the penetration of disaster insurance coverage and the capacity of insurance markets to absorb disaster risks. Recommendations for improving the financial management of disaster risks are also identified.

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Too late, too sudden: Transition to a low-carbon economy and systemic risk European Systemic Risk Board Advisory Scientific Committee Feb 2016
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Summary

The COP 21 Paris Agreement emphasizes the necessity of transitioning towards a low-carbon economy with a shift towards more renewable energies. The report outlines the danger associated with a late and sudden shift, where the adaptation occurs abruptly, whereas an early start in implementing the pledges could ensure a soft landing. The risks would mainly be associated with the macro impact of a sudden change in energy use, revaluation of carbon-intensive assets and a rise in the incidence of natural catastrophes. To ensure financial stability, this report suggests to enhance disclosure of the carbon intensity of non-financial firms, making stress-testing of related exposures of financial firms possible.

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The Equator Principles – Do they make banks more sustainable? UNEP Inquiry, Centre for International Governance Innovation (CIGI) Feb 2016
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Summary

The Equator Principles (EPs) are a voluntary code of conduct and a risk management framework for determining,  assessing and managing environmental and social risks in projects, such as energy or infrastructure projects. This report combines a literature analysis, interviews with project financiers and stakeholders and an analysis of EP signatories’ reports to determine how these actors are implementing the EPs. The report finds that the EPs do not create significant changes in project financing institutions and therefore enforcement mechanisms should be implemented.

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ESG Magazine: Can investors lead the fight against climate change? ESG Magazine Mar 2016
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Summary

This issue is the second in a two-part COP21 special and focuses on the major outcomes of COP21 for institutional investors. It also looks at leading current investment responses to climate change from asset owners.

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Transforming our world through investment An introductory study of institutional investors’ role in supporting the Sustainable Development Goals Shareaction Mar 2016
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Summary

This study aims to examine how institutional investors across the world are beginning to consider the Sustainable Development Goals within investment decisions, in addition to their future plans related to the SDGs. A survey was sent to about 500 institutional investors globally of which 52 responded. The report highlights the belief that the SDG’s will serve to enhance returns, mitigate risk, strengthen reputation and help achieve investment objectives of the different institutions.

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Building a Sustainable Financial System in the European Union UNEP Inquiry: Design of Sustainable Financial System, 2° Investing Initiative Mar 2016
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Summary

This report present actions under way at the European level and in selected Member States to align the rules governing the financial system with environmental sustainability. The authors stress thereby five policy priorities: capital reallocation, enhancing frameworks for risk management, clarify core responsibilities of financial institutions, improve reporting and disclosure and the need of a strategic reset, seeking to link previously unconnected initiatives.

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Impact of Environmental Factors on Credit Risk of Commercial Banks Industrial and Commercial Bank of China Mar 2016
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Summary

This paper discusses the impact of internalizing environmental costs onto a firm’s balance sheet and the consequent risks this creates for commercial banks. Two industries, thermal power and cement production, were selected for stress testing. A range of high, medium and low stress scenarios were used to assess the impact on the financial performance and credit rating. This bank-led approach is the first of its kind in China and provides a foundation for the discussions on the theoretical framework and analytical methodologies.

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Phase I Report of the Task Force on Climate-Related Financial Disclosures Task Force on Climate-related Financial Disclosures (TCFD) Mar 2016
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Summary

At the request of the G20, the Financial Stability Board (FSB) engaged the private and public sector to review how the financial sector can incorporate climate-related issues in financial reporting. The TCFD undertakes a coordinated assessment of what constitutes efficient and effective disclosure and desings a set of recommendations for voluntary company financial disclosures of climate-related risks that are responsive to the needs of lenders, insureres, investors, and other users. This report sets out the scope and high-level objectives together with a set of fundamental principles of disclosure. Thereby, forming the framework for the second report (to be published end of 2016) which will describe the specific recommendations and guidelines.

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Resource Efficiency: A Case Study in Carbon and Water Use S&P Dow Jones Indices, Trucost Mar 2016
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Summary

In this study the authors take a closer look at extending the already well-researched approach to increasing the efficiency of fossil fuel usage to water usage. They find that resource scarcity is a complex theme to consider in investments as demand for various resources cannot be looked at individually considering the demand for resources is correlated. Results also show that carbon- and resource-efficient companies may outperform less efficient companies. Lastly, the report finds that a focus on efficiency can help companies mitigate risks on the level of regulation, resource depletion and reputation.

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Levering ecosystems: A business-focused perspective on how debt supports investments in ecosystem services Credit Suisse, Climate Bonds Initiative, Clarmondial Apr 2016
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Summary

This report explores how businesses can utilize debt as a tool to restore, rehabilitate, and conserve the environment while creating financial value. The report explains how ecosystem services are relevant to companies, examines the state of markets for carbon, water, and biodiversity credits, discusses the suitability of debt financing for companies at various stages and sizes, and suggests recommendations for businesses and investors who want to take advantage of opportunities to invest in conservation finance.

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The Role of Financial Services in Society World Economic Forum (WEF) Apr 2016
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Summary

Due to the accelerated growth in technology-enabled innovation, the authors aim to consider the impact on the risk profile of the financial system. This report further describes the wave of innovation at hand and how it leads to opportunities for enhancing the stability of the financial system, and concludes with a set of recommendations on how to improve it.

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Financial risks and opportunities in the time of climate change Bruegel Apr 2016
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Summary

In the scenario of a late and sudden transition to a low-carbon economy, the financial sector can be heavily exposed to environmental risks. Methodologies are being developed to measure the carbon intensity of investments, and the industry is reflecting on the importance of carbon stress tests. This policy brief proposes a Finance and Sustainability Risk Forum in which European financial supervision can share best practices and coordinate their input to the Financial Stability Board.

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Annual Survey of Large Pension Funds and Public Pension Reserve Funds Report on Pension Funds’ long-term investments 2015 OECD Apr 2016
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Summary

The survey provides information on 75 retirement schemes, monitoring and comparing the investment behaviour, asset levels, and performances in order to help and encourage long-term financing by institutions. The importance of retirement systems has grown over the last 15 years, representing 51.8% of GDP in 2001, and 61.9% of GDP totalling USD 30.2 tn in assets. Thus, the accumulation of saving in such financial channels has never been larger. The research shows that pension schemes face a challenging environment, especially due to the low interest rates. Thus, there is an important quest for alternative investment management, uncorrelated lower volatility returns, expansion of alternatives, etc. Six key trends have been identified by the survey respondents, of which the following ones are particularly interesting:

  • Emerging markets and foreign investment
  • Climate change resiliency and green investments
  • Social impact investing
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ERISC Phase II: How food prices link environmental constraints to sovereign credit risk UNEP, Global Footprint Network May 2016
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Summary

The global food system is affected by changing environmental conditions (e.g. water scarcity) which will increase over the coming years, as well as the increasing demographic pressure and demand for food supplies. It is highly probable that the volatility of food commodity prices will also increase over the coming years. Furthermore, higher and more volatile food prices are key transmission mechanisms through which environmental risks and constraints (e.g. climate change) will impact national economies. If these are significant enough, they may affect a country’s credit rating and risks exposure of sovereign bondholders. This report discusses how more volatile food prices, influence the different nations.

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Green finance – a growing imperative Paulson Institute, Green Finance Committee, sifma, UNEP, Bloomberg Philanthropies May 2016
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Summary

This briefing underlines the importance that green finance is scaled, thereby ‘industrialised’. This requires international harmonization of definitions, products and standards. Hence governments have a central role to play. This report discusses barriers, challenges, and makes suggestions on how to encourage the industrialisation of sustainable finance.

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Taking the long view: A toolkit for long-term, sustainable investment mandates Investment Leaders Group Cambridge Institute for Sustainability Leadership May 2016
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Summary

This report includes investment strategies that can contribute to increased long-term value creation by companies and the economy as a whole. Such investments are guided by a clear investment philosophy, process and culture rather than a defined set of rules or criteria. This report outlines 10 design features which can be flexibly adapted to deliver varying degrees of long-term value; focusing foremost on active listed equity strategies.

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In search of impact: Measuring the full value of capital Investment Leaders Group Cambridge Institute for Sustainability Leadership May 2016
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Summary

Helping the investment industry to understand the impact of their investments on sustainability challenges, is the aim of this research. Therefore, a framework is suggested based on a set of six environmental and social themes (based on SDGs), which should allow investors to calculate and communicate the social and environmental impacts of their portfolio.

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Feeling the heat: An investors’ guide to measuring business risk from carbon and energy regulation Investment Leaders Group Cambridge Institute for Sustainability Leadership May 2016
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Summary

This report suggests a model that quantifies the impact of potential climate and energy regulation on company profitability. Thereby aiming to improve stock picking and empowering investors to engage with companies on actions they can take to become “future proof”. The research finds significant effects of climate and energy regulation on company profitability, but with important differences on a firm-level within the same sectors and geographies.

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Green Investment Banks Scaling up private investment in low-carbon, climate-resilient infrastructure OECD May 2016
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Summary

This report focusses on capitalised green investment banks (GIBs), analysing the rationales, mandates and financing activities of this relatively new category of public financial institution. Based on the experience of over a dozen GIBs and GIB-like entities, the report provides a non-prescriptive stock-taking of the diverse ways in which these public institutions are catalysing private investment in low-carbon, climate-resilient infrastructure and other green sectors, with a spotlight on energy efficiency projects. The report also provides practical information to policy makers on how green investment banks are being set up, capitalised and staffed.

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