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16 01, 2020

A climate scenario analysis of U.S. insurers’ portfolios – a report by BlackRock powered by 2°ii data

Insurers are uniquely exposed to climate-change-related risks from multiple angles, both in their underwriting and investing activities. With input from 2° Investing Initiative, BlackRock has performed a climate scenario analysis on US insurers’ portfolios in order to help investors understand climate risks and adapt investment strategies to manage them.

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13 12, 2019

Finance ClimAct: Implementing the French action plan on sustainable finance

We are delighted to announce the launch of a new project, “Finance ClimAct“, to align the French and European action plans on sustainable finance and to strengthen French positioning on this topic. ADEME (the French Environment & Energy Management Agency) and the 2° Investing Initiative (2DII) devised the initial blueprint for the project, in close collaboration with the supporting partners.

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10 12, 2019

New Report: Passing the Baton – Shareholder Resolutions & their Contribution to Investor Climate Pledges

In a newly released report, “Passing the Baton: Climate-Related Shareholder Resolutions and their Contribution to Investor Climate Pledges,” the 2° Investing Initiative sheds new light on the investors’ demands for climate action. See our key findings below:

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10 12, 2019

Passing the Baton: Shareholder Resolutions & their Contribution to Investor Climate Pledges

New report shows growth of “climate target-setting” in shareholder resolutions & their potential to cascade investors’ climate pledges to companies

 Key figures:

  • We analysed over 7,500 resolutions and identified 500 as climate related
  • From 2006-2019, over 150 shareholder resolutions involving some form of requirement to set climate target or a related business plan were introduced
  • Explicit references to the Paris Agreement are on the rise, with 11 resolutions pushing for consistency with the climate goals of the Paris Agreement
  • For the first time, in 2018, 3 companies subsequently adopted these targets. While the analysis does not prove causality, it represents a first step in understanding the potential impact of engagement.

Key takeaways:

  • These figures show the potential of resolutions to turn words into actions, “passing the baton” from investors who committed to aligning their portfolio with Paris goals to their investees
  • They illustrate the need to further organize and engage in collective shareholder actions, such as the Climate Action 100+ coalition
  • They also reveal the gap: among 500 climate-related resolutions, only 11 resolutions requested consistency with a 2°C pathway or better. Given the recent investor pledges, we expect Paris-aligned resolutions to rise dramatically in the next few years

Please see here for the full report.

 

9 12, 2019

The Katowice commitment: one year on

As COP25 begins in Madrid, the 2˚ Investing Initiative and the five Katowice signatories look back on progress over the past year and what’s ahead. Find the full statement below:

As five leading global banks with a combined loan book of over €2.4 trillion – BBVA, BNP Paribas, ING, Société Générale and Standard Chartered – we believe we have a critical role to play in supporting Article 2.1c of the Paris Agreement: “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”

This is why at last year’s COP24 in Katowice, we made a historic commitment: pledging to measure the climate alignment of our lending portfolios, and to explore ways to progressively steer financial flows through our core lending towards the Paris Agreement’s goals.

The Katowice commitment contributed to inspiring the Collective Commitment to Climate Action, signed by 34 banks (representing $13 trillion in loans) willing to commit to aligning their business with the Paris Agreement, as part of the UNEP FI Principles for Responsible Banking, signed by more than 130 banks around the world. Both were announced in September 2019 in New York at the UN Secretary General’s Climate Action Summit.

At the heart of this pledge was the commitment to develop open-source methods and tools for measuring the alignment of our lending portfolios with the Paris Agreement goals, partnering with organizations like the 2˚ Investing Initiative. As part of this commitment, we’re also leading the implementation of these tools to “put the money where our mouth is,” and actually align our portfolios with these goals within the timeframe of the Collective Commitment to Climate Action.

One year on from Katowice, we’re proud to say that we’ve made strong progress on refining these methodologies and tools and improving their application. One of the 2˚ Investing Initiative’s flagship tools, the Paris Agreement Capital Transition Assessment (PACTA) climate scenario analysis methodology, has played a key role in driving these efforts forward.

Open-source, anonymized and IP rights-free, the PACTA methodology calculates the extent to which corporate capital expenditures and industrial assets behind a given equity or bond are aligned with various climate scenarios. Recognizing the potential of this methodology, in 2018 we began working with the 2˚ Investing Initiative to finesse PACTA’s application to corporate lending portfolios. Since then, 12 other major banks from Europe, North and South America have joined with us to help test and further improve the methodology, in a bid to expand its uptake across the banking sector.

Already, this collaboration has shown promising results. PACTA represents a major step forward in climate scenario analysis, by providing banks with insights into the climate impact of their clients’ capital expenditure plans across the seven sectors already in scope (oil & gas, coal, power, automotive, cement, steel, and shipping). It employs a sector-based approach focusing on the economic activity carried out by owned assets of companies, in the most carbon-intensive segments of these value chains (namely: upstream O&G, power generation, car fleet emissions, cement & steel manufacturing, shipping operations). In these, it tackles the alignment of production capacity and emission intensity. PACTA targets shifts in investment of companies from high-carbon to low-carbon technologies, empowering banks to steer towards a positive climate impact.

As more banks test PACTA on their lending portfolios, we expect that this will help improve the methodology and its applicability for piloting credit portfolios. It also provides banks with the opportunity to collaborate and harmonize the method for measuring the Paris alignment of financial products.

After more than a year’s work of intensive work on refining this methodology, in 2020 the finalised IP rights-free, open source software will be released, enabling any bank to carry out the analysis. We hope this development will further drive the ambitious promise we made at Katowice, in turn enabling the global banking industry to ramp up its contributions to the Paris goals.

28 11, 2019

Allianz France, Australian Ethical, Aviva France, AXA, Citi, and Ircantec recognized at the International Climate Reporting Awards

Under the High Patronage of Brune Poirson, Secretary of State to the Minister for the Ecological and Inclusive Transition, Arnaud Leroy, CEO of ADEME, announced the winners of the International Climate Reporting Awards on November 28, 2019.

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28 11, 2019

Climate Tech Compass

According to the OECD, meeting the 2°C scenario will require $6.9 trillion annual investments in infrastructure until 2030, versus $6.3 trillion annual investments in a business-as-usual scenario. These investments require precise alignment among governments, corporates, and investors.

However, several important factors hinder efforts to channel investments towards low carbon pathways. For instance, governments frequently lack the referential frameworks and tools to develop national climate strategies (national determined contributions, or NDCs) that are consistent with the 2°C scenario. Likewise, corporates often lack visibility on public climate strategy at national sectoral level, which weighs on their confidence in investing in low carbon technologies.

To address this market gap, the 2° Investing Initiative and Beyond Ratings, a provider of data and analytics services for the investment industry, have joined forces to develop an innovative methodology and suite of services known as the Climate Tech Compass.

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28 11, 2019

Official launch of the Climate Tech Compass, a new platform to help investors align with the Paris Agreement goals

As COP25 kicks off, the 2° Investing Initiative and Beyond Ratings are delighted to announce the official launch of the Climate Tech Compass, which helps governments, corporates, and financial institutions align their investments and policies with the Paris Agreement goals.

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27 11, 2019

FinanceMap: Asset Managers & Climate Change, a study with InfluenceMap

In November 2019, InfluenceMap published a new report, FinanceMap, which examines how the asset management sector performs on portfolios, engagement, and resolutions. We were proud that our Paris Agreement Capital Transition Assessment (PACTA) methodology played a key role in the analysis. Please see the report here and the executive summary below.

This report received support from EIT Climate-KIC and KR Foundation.

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4 11, 2019

Op-ed by Stan Dupre in Environmental Finance: In response to accusations that Enel’s SDG bond was greenwashing

Now that the G-word has been dropped, let’s talk about it, says Stan Dupré

Quoted by Environmental Finance last week, a representative from the green bond investor Nuveen charged that the “SDG-linked bond” recently issued by Italian electricity giant Enel amounted to “greenwashing.”

The first-of-its-kind bond is linked to a commitment to increase the coupon by 25 basis points if the company fails to meet its renewables capacity development targets by the end of 2021. A Nuveen representative argued, “That is not a green bond to us. If you want to issue a green bond, then issue a green bond funding the direct projects that are transitioning them to 55% renewables.” He added, “Effectively, all they have done is pay … an option on not delivering their renewables goals”.

So now that the “G-word” has been dropped, it might be the right time to ask: in many ways, isn’t the ‘green bond’ concept itself a form of greenwashing?

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