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We align financial markets with climate goals

We are an international, non-profit think tank promoting the integration of climate risks in investment strategies and financial regulations. In order to ensure the integrity of our work, we have a multi-stakeholder governance and funding structure, with representatives from a diverse array of financial institutions, regulators, universities and NGOs.

What we do

Research activities

We carry out the world’s largest research projects on climate goals in financial markets, with our team having been involved in the early stages of nearly all flagship sustainable finance initiatives since 2012. Visit the Resources page for more information on some of our key projects, such as the Paris Agreement Capital Transition Assessment (PACTA) scenario analysis methodology, Partnerships with Supervisors, and our latest research papers.

Engagement activities

As an international, multi-stakeholder think tank, we present our research at some of the year’s flagship conferences, most recently the World Economic Forum, COP25, Climate Finance Day, and Principles for Responsible Investment (PRI) in Person. We also regularly organize high-level conferences, workshops and webinars, such as the Beyond Alignment energy transition conference, featuring speakers from UNPRI, WWF and AXA.

Policy work

We have contributed to some of the world’s first sustainable finance policies, including France’s Article 173, the first climate-related financial regulation in Europe, and as a member of the EC High-Level Expert Group (HLEG) on Sustainable Finance. We have also worked with leading supervisors such as EIOPA, the Bank of England, and the California Insurance Department, advising on portfolio analysis, risk management, and stress-testing of their regulated entities.

Innovation

With support from partners such as EIT Climate-KIC, the EU’s main climate innovation initiative, we have devised a range of cutting-edge methodologies and tools — ranging from the PACTA model for scenario analysis; to the Climate Tech Compass for technology investment pathways, developed in partnership with Beyond Ratings; to our spin-off, Asset Resolution, which provides data solutions for climate-related financial analysis.

Our ideals

Non commercial & committed to the public good
We have no commercial contracts and provide all our research open source and IP rights free. This policy minimizes financial conflicts of interest and guarantees the public good driven nature of our work.

Interest neutral
Our governance and our funding structure is designed to be diversified and multi-stakeholder. This ensures that our research is not designed to represent a particular interest group, but rather our best understanding of the truth.

Science and evidence based
Our research is meant to be science based, informing the results and “letting the chips fall where they may.”

Our theory

One of the three long-term goals of the Paris Agreement is “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development” (Article 2.1c). At the 2° Investing Initiative, we work to reform investment frameworks and mobilize the financial sector to reallocate capital in line with below-2°C climate goals.

As we see it, the financial sector plays a role by: (1) Supplying investment capital to make the below-2°C transition happen, and (2) anticipating changes in the demand of capital. Indeed, the introduction of more stringent carbon policies, new technologies, and the potential development of climate litigation will change the risk-adjusted returns of different financial assets, creating both financial risk and opportunity.

Eight years after our founding in 2012 with the mission to “Promote the integration of climate constraints in financial institutions’ investment strategies and financial regulation”, nearly all of core concepts we devised have become integrated into voluntary practices, as well as being placed on the regulatory agenda in the EU and further afield.

  • We helped draft the first version of France’s groundbreaking article 173, the first climate-related financial regulation in Europe, in addition to the first report commissioned by the European Commission on sustainable finance and HLEG recommendations on disclosure, supervisors and retail investors;
  • Through our research projects, SEI Metrics (2013) and the introduction of PACTA in 2015, we coined the concept of aligning portfolios with climate goals. This concept has been taken up by investors and banks with some $61 trillion in AuM, in addition to being embedded in EU regulations and the Task Force on Climate-Related Financial Disclosures (TCFD);
  • We introduced scenario analysis and climate stress tests in regional and national regulatory practice through our partnerships in the Netherlands, UK, California and EIOPA.

Annual reports