June 2018: While the discussion of bond markets has largely focused on the green bond space, which currently only represents a marginal share (<0.5%) of outstanding bonds, this discussion paper focusses on creating a broader understanding of the interface between climate goals and bonds.
Discussion paper: Shooting for the moon in a hot air balloon? Measuring how green bonds contribute to scaling up investments in green projects
May 2018: This new discussion paper aims to pave the way for the development of a framework for assessing and moving forward the “contribution of green bonds to scaling up the investments in green projects”. The paper focuses on the case of ‘Use-of-Proceeds Green Bonds’ (UoP GB) that represent 95% of the market in 2016. It discusses the link between
increasing investment in UoP-GB on the one hand, and the growth of investments in green projects by issuers on the other hand, suggesting how this approach can be enhanced to achieve further impact.
May 2018: Our new working paper “The bigger picture” shows that under optimistic assumptions around breakthrough technologies, oil demand could drop by 50% in only 22 years. A combination of shared economy, 3D printing, autonomous vehicles, nanotechnologies, and artificial intelligence, among others, could shave around 30 million barrels per day off of global oil demand. Once you add the ‘traditional’ assumptions around the effects of electric vehicles and the end of oil in the power sector, oil demand could drop to 47 million barrels per day by 2040.
The paper builds on a comprehensive literature review of the potential effects of breakthrough technologies, building on the optimistic assumptions founds in academic literature, as well as research by industry experts (McKinsey). Squarely in the realm of the possible, the analysis represents an alternative vision of what an oil demand crash could look like if technology disruption materializes. Our objective in this paper is not to forecast, but rather to show where optimistic technology assumptions lead the oil sector, providing the potential basis for alternative stress-testing frameworks for fossil fuels.
April 2018: In the context of mobilising policy actions with regard to sustainable finance, the European Parliament and Commission are considering introducing a Green Supporting Factor (GSF) or Brown Penalty (BP) for capital reserve requirements. The objective of this working paper is to identify the potential impacts of introducing a GSF or a Brown Penalty.
In this project 2ii collaborates with banks to extend the existing 2°C scenario analysis framework to corporate lending portfolios including a road-test with participating banks of the methodology developed in the course of the project.
Jan 2018: An overview of the current state of the household credit market. We argue that household credit has so far been an overlooked topic in climate finance. While there are some tentative steps from early movers to assess the climate impact of various types of household credit much potential remains to be unlocked.
Read our paper “A Taxonomy of Climate Accounting Principles for Financial Portfolios” published in the sustainable finance special issue of the journal Sustainability.
The project offical titled as”KliFin-Scanner” (Climate finance product scanner for retail investors and banks) aims to develop a non-financial objectives questionaire for retail investors. This quesitonare will allow retail investors to create their individual non-financial objectives investment profile, which can then be matched to financial products. The questionaire and the corresponding matching software will be integrated in a free-to-use information website available to all retail investors in Germany. They will open-source and be available as white label solution for integratino in bank own infrastructe. The project runtime is 01.01.2018 – 30.06. 2020.