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.
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:
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.
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?
When? November 28th 2019 from 10am to 1pm
Where? La Fabrique Événementielle, 52 ter Rue des Vinaigriers, 75010 Paris
Reading material linked to the event
During Paris for Tomorrow week, 2°ii and Beyond Ratings are organizing an event on November 28th, 2019 to discuss the financing of the energy transition and launch the Climate Tech Compass, which allows you to map country level sectoral technology pathways consistent with a 2°C scenario, as well as explicit investment options in climate relevant sectors. The audience will be invited to participate in panel discussions on the following topics:
1. Transition strategies: How can we accelerate the energy transition through innovative investment strategies and products?
2. Transition monitoring: What are the indicators and tools available to track progress and ensure our actions are taking us toward greater alignment with the Paris Climate Goals?
- Learn about the new online platform, the Climate Tech Compass, developed by Beyond Ratings and 2°ii
- Hear from financial institutions leading the way in terms of investment strategies and metrics to track progress for financing the energy transition, as well as NGOs pushing the ambition of climate-aligned finance
- Participate in envisioning next steps to make progress on financing a low-carbon economy
What is it about?
This event will mark the launch of Climate Tech Compass, developed in partnership with Beyond Ratings as part of an EIT Climate-KIC project. The platform will enable key stakeholders to map the technology transition and investments necessary to achieve the 2°C target. The data is available at country and sector level, therefore allows the integration into key stakeholders’ operational process and investment decisions.
We invite participants of this event to imagine, discuss and reflect on the progress required in the coming years as well as innovative strategies, actions or metrics that can take us there. The panel discussions and the Climate Tech Compass platform launch will be followed by a buffet and time for further conversation.
10h00 – 10h45 : Financing the Transition: How can we accelerate the energy transition through innovative investment strategies and products?
10h45 – 11h15: Launch of the Climate Tech Compass platform
Live demo of the platform and Q&As
11h15 – 12h: Monitoring the Transition: What are the indicators and tools available to track progress and ensure our actions are taking us towards greater alignment with the Paris Climate Goals?
12h – 13h: Buffet Lunch and Networking
When? On November 11, 2019 from 14.00 to 15.00 (CEST)
This technical webinar will focus on how to use the PACTA model to measure the alignment of equity/corporate bond portfolios and global bank loans with the Paris Agreement. Free and open-source, the PACTA methodology analyses exposure to climate change-related sectors in equity and fixed-income portfolios over multiple scenarios – and compares it with scenarios needed for a climate-safe transition. More than 1,500 financial institutions worldwide have already applied the methodology on over $10 trillion in assets under management.
The webinar comes in the context of our support for the Swiss and Dutch government-led initiative, announced at the UN Climate Action Pre-Summit 2019, to help align private financial flows with the Paris Agreement. As part of this initiative, governments (national or sub-national), including some of the world’s biggest financial hubs, and financial institutions are committing to monitor their climate impact and their alignment with the 1.5°C temperature goal. Committed governments and financial institutions will enjoy a number of free benefits, including the chance to participate in testing the enhanced version of the PACTA methodology in 2020.
- Jakob Thomä, Managing Director at 2° Investing Initiative
- Silvia Ruprecht, Senior climate policy advisor in the Swiss Federal Office for the Environment FOEN
Access the webinar recording here.
To learn more about the PACTA methodology and its role in the Swiss/NL Initiative, please see https://www.transitionmonitor.com/pacta-2020/ or contact email@example.com
This project has received funding from the European Union’s Life NGO programme under grant agreement No GIC/FR/00061 PACTA
Brune POIRSON, Minister of State attached to the Minister for the Ecological and Inclusive Transition, is delighted to invite you to the ceremony for the second edition of the International Climate Reporting Awards in presence of Olivier GUERSENT, Director General of DG FISMA, and Arnaud LEROY, ADEME CEO and Thomas LESUEUR, Commissioner-General for sustainable Development.
In addition to announcing the winners, a series of high-level conversations and panels will provide an overview of some of the key reporting drivers, best practices and challenges which international financial institutions are currently working on.
The Awards build on the French Article 173, European Action Plan and TCFD guidelines aims to stimulate innovation and recognize the best climate reporting practices of international financial institutions.
The 2019 awards are awarded by an independent jury and will highlight collective efforts and knowledge across different institutions and regions.
To register for the event, please click here.