PRESS

16 10, 2019

Event: International Climate Reporting Awards Ceremony

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.

2 10, 2019

Now launched: New partnership with the Japan Financial Services Agency (JFSA)

Following our successful application for the Japan Financial Services Agency (JFSA) special research fellowship, we are proud to announce a new partnership to conduct an impact evaluation of climate-related risks to Japan’s financial stability. The project will be led by Jakob Thomae, managing director at 2° Investing Initiative, and Hugues Chenet, co-founder and board member at 2°ii France.

This partnership represents an important expansion of our climate scenario methodology in a previously untapped market, following our collaborations with the Bank of England, the California Insurance Commissioner, and the European Insurance and Occupational Pension Authority (EIOPA), as well as 17 international banks representing 20% of the global banking sector by asset size. We look forward to sharing more about this exciting new partnership in the coming months.

20 09, 2019

Enhancing transparency and aligning private financial flows with the Paris Agreement

New joint initiative presented by Switzerland & the Netherlands, with technical support from the 2° Investing Initiative, at the UN Climate Action Summit

Despite progress in recent years, the finance sector is still falling short of what’s needed to address climate change. To help bridge this gap, Switzerland and the Netherlands are calling on Member States and financial institutions to sign on to a new pledge to assess and monitor the climate impact and alignment of their financial flows with the Paris Agreement’s 1.5°C temperature goal.

The 2° Investing Initiative is providing key support to this pledge, notably via the Paris Agreement Capital Transition Assessment (PACTA) climate scenario analysis methodology. 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.

How the pledge works:

Governments (national or sub-national), including some of the world’s biggest financial hubs, and financial institutions will commit to monitor their climate impact and their alignment with the 1.5°C temperature goal.

As well as Switzerland and the Netherlands, Denmark, Italy, Luxembourg, Norway, Portugal, Spain, and Sweden have agreed to commit, with additional interest from other major finance hubs. Private financial institutions, their industry representatives, public financial institutions, and supervisory authorities can also voluntarily commit to take action. Going forward, progress will be tracked to ensure the commitments made will result in climate impact in the real economy.

More on 2°ii’s contributions: the enhanced PACTA methodology

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. This version builds on our earlier, voluntary pilot project with Swiss pension funds and insurance companies in 2017. It also incorporates new insights from our partnership with ING and 16 other banks to test a methodology for corporate lending.

The enhanced version of the model will offer:

1)    The consideration of climate actions in addition to portfolio exposure;

2)    The ability to consider corporate loans’ climate goal alignment, and therefore make the test available for banks with global loan books;

3)    A target-setting framework to be finalized in 2020;

4)    A new tool to measure climate alignment of Swiss real estate and mortgage portfolios.

To find out more about the pledge, please contact lydie-line.paroz at bafu.admin.chsilvia.ruprecht at bafu.admin.chk.p.m.solberg at minezk.nll.a.j.eble at minezk.nl

To learn more about the PACTA methodology and the internationally coordinated PACTA-Initiative 2020, supporting the Swiss/NL Initiative, please see www.transitionmonitor.com or contact  transitionmonitor at 2degrees-investing.org

 

20 09, 2019

Our op-ed on Ethical Corporation: Tackling the last frontier in climate finance

Jakob Thomae of the 2° Investing Initiative explains how 17 international banks are road-testing a new methodology to address the barriers that have prevented banks from aligning more fully with the Paris Agreement

Ahead of New York Climate Week 2019, the sustainable finance sector has made important strides toward meeting one of the Paris Agreement’s long-term goals, under Article 2.1c: “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”

But there’s a major caveat: while finance as a whole has concentrated on efforts to align equity portfolios with the Paris goals, or to promote green bonds, the banking sector has long remained one of the “last frontiers”. This has been due in large part to two major market gaps: the lack of data on non-listed companies, and the difficulties of processing data from unstructured databases.

Here at the 2° Investing Initiative, a non-profit thinktank working to align financial markets with climate goals, we’ve been working over the past months with a pilot group of 17 international banks in order to help address these gaps. By publicly announcing the banks that are piloting our flagship methodology for climate-scenario analysis of corporate lending portfolios, we’re hoping that the banking sector will be further empowered to contribute more fully to Article 2.1c – and to the Paris Agreement goals more broadly.

Read more at Ethical Corporation: http://www.ethicalcorp.com/tackling-last-frontier-climate-finance

19 09, 2019

Progress on the PACTA methodology for corporate lending: ING publishes its first Terra progress report

On September 19, 2019, one of our longstanding partners, ING, published their first progress report on Terra, their approach to steer its €600 billion lending book in line with the goals of the Paris Agreement to keep global warming to well-below two degrees. As ING put it: “With the Terra approach, ING aims to be a positive force in the fight against climate change. The progress report presents ING’s pathway towards climate alignment in the sectors most responsible for climate change and is intended to be published every year.

The disclosure addresses developments and climate alignment for the sectors: power generation, fossil fuels, automotive, shipping, aviation, steel, cement, residential mortgages and commercial real estate. These are the sectors in ING’s portfolio that are most responsible for greenhouse gas emissions. In a Climate Alignment Dashboard (CAD) the report presents which sectors are on track for climate alignment and where work is still in progress. This climate change disclosure is a first for banks.”

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16 09, 2019

17 international banks now piloting the 2° Investing Initiative’s flagship climate scenario analysis methodology

The engagement represents a major step forward in the banking sector’s contributions to measuring climate alignment

Ahead of New York Climate Week 2019, the 2° Investing Initiative (2°ii) is delighted to announce the international banks that are road testing the Paris Agreement Capital Transition Assessment (PACTA) methodology for climate scenario analysis of corporate lending portfolios.

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15 09, 2019

Event: Bridging the Gap – from Portfolio Alignment to Impact

The 2° Investing Initiative is delighted to invite you to:
BRIDGING THE GAP:
FROM PORTFOLIO ALIGNMENT TO IMPACT

Technical discussion on evidence-based and impact-oriented targets

When? September 24th 2019 – from 9am to 12pm
Where? ING Financial District office
1133 Avenue of the Americas, 9th Floor New York, NY 10036

2° Investing Initiative will bring together experts from the banking sector to discuss ways to build understanding of impact-oriented climate commitments. The audience will be invited to participate in a debate on the technical challenges to applying these target-setting and tracking concepts for banks and review a way forward.

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27 08, 2019

Climate Tools Workshop, Sept. 9, 2019: Aligning Climate Targets, Pledges and Actions of Financial Institutions and Corporations with the Paris Agreement

2° Investing Initiative and Beyond Ratings, with support from the Institut Louis Bachelier, are delighted to invite you to:

Climate Tools Workshop: Aligning Climate Targets, Pledges and Actions of Financial Institutions and Corporations with the Paris Agreement 

When? 9 September 2019 from 5.00pm to 7.00pm
Where? Palais Brongniart 16 place de la Bourse 75002 Paris

2° Investing Initiative will bring together asset owners, asset managers and technical experts to discuss ways to foster interaction between investors and companies, develop a more comprehensive understanding of their needs for climate-related tools, as well as showcase and gather feedback on existing and emerging tools.

Since COP21, climate alignment target-setting by investors and banks has evolved into a popular concept accepted by mainstream financial institutions and governments.

However, until now, target-setting has mostly been seen by large financial institutions as a way to measure changes in the climate assessment of their portfolio by improving the value of the underlying indicator to communicate on progress, rather than one to drive impact in the real economy.

In order to drive actual impact but also to comply with marketing regulations, it is critical to establish market standards on:

What is a relevant target from a technical perspective? (discussion on current target frameworks)
How to evaluate investment and impact opportunities triggered by the Paris Agreement objectives?
How to measure and report progress toward climate targets?How to implement a climate strategy and what existing tools can support investors’ actions?

A number of our own ongoing initiatives are related to those issues, notably the following:

  • The creation of a comprehensive PACTA climate toolkit with new functionalities such as a target-setting simulator, company reports consultation module, stress testing excel tool
  • The development of a model to identify investment opportunities arising under a 2°C carbon budget in partnership with Beyond Ratings, now part of the Information Services Division (ISD) of London Stock Exchange Group (LSEG).

Why attend ?

  • Learn from industry experts on existing and emerging climate-related tools
  • Hear from investors and corporates on how these tools are shaping their actions
  • Influence the development of emerging tools and methodologies for measuring the impact of climate actions

Programme

16h50 – 17h: Welcome
17h – 17h20: Introduction: Shifting the economy toward the objectives of the Paris Agreement
17h20 – 17h50: Support technology pathways assessment within the Financial sector: Presentation of the methodology & concept, functionalities and case study
17h50 – 18h10: Q&A and roundtable discussion
18h10 – 18h40: Setting decarbonisation targets for Institutional Investors: Deep dive into PACTA target setting module, methodology and concept
18h40 – 19h: Q&A and roundtable discussion

The workshop will be followed by an hour of networking drinks organized at Chai Brongniart 33 Place de la Bourse, 75002 Paris.

Speakers

Simon Messenger, France and UK Director, 2°investing Initiative
Rodolphe Bocquet, CEO, Beyond Ratings
Emeric Nicolas, Head of Data Science and Systems, Beyond Ratings
Emmeline Stein, Analyst, 2° Investing Initiative

To register, please email comms [at] 2degrees-investing.org

This project has received funding from the European Union’s H2020 programme under grant agreement 785087

 

7 08, 2019

Now launched: the Bank of England stress test on TransitionMonitor.com

In August, the 2° Investing Initiative officially launched the Bank of England climate insurance stress-testing tool on the Paris Agreement Capital Transition Assessment (PACTA) website. The tool uses the breakdown of exposure to different climate-relevant sectors to calculate the effects of climate stress on the portfolio’s value. UK insurance companies, as well as investors outside of the UK interested in understanding their performance under the UK stress test, can now go online to run a free, anonymised stress test. Users will be able to generate the stress test results in combination with a freely available Excel tool and the online PACTA scenario analysis software.

The tool further builds on our “Storm Ahead stress test scenario report (January 2019), which provides guidelines for integrating scenario analysis into stress tests of regulated entities.

Background

On June 18th, 2019, the Bank of England Prudential Regulation Authority launched its biennial insurance stress test, asking the biggest regulated life and general insurers to provide information about the impact of a range of stress tests on their business. The stress test also includes an exploratory exercise related to climate change, which looks into potential impacts to firms’ liabilities and investments stemming from physical and transition risks. The 2° Investing Initiative has been supporting the Bank of England with designing the climate-related aspects of the stress test.

More about PACTA

The PACTA climate change scenario analysis tool was launched in September 2018 with support from the UN Principles for Responsible Investment (UNPRI), a UN-backed investor body, and California Insurance Commissioner Dave Jones. The tool builds on a previous version that has been used by more than 250 investors, many of whom are PRI signatories, as well as four regulators, including the Dutch Central Bank, the Swiss financial regulator, and the California Insurance Commission.

The tool analyses exposure to climate-change related risks in equity and fixed-income portfolios over multiple scenarios, producing a customized, confidential output report. It has an interactive feature that allows the user to study the effects of different parameters on alignment, for example by modifying the scenarios and geographies of the analysis. It also uses graphs to help investors to see the gap between their existing portfolio and 2˚ benchmarks.

The tool is housed on TransitionMonitor.com, which includes a number of other tools, all open source and IP rights-free. These include the PACTA methodology for corporate lending portfolios as well as a target-setting module designed to help set science-based targets for financial portfolios (slated for late 2019).

The PACTA project has received funding from the European Union’s Life NGO programme under grant agreement No LIFE16 GIC/FR/00061 PACTA.

3 04, 2019

Announcement: 2° Investing Initiative is now a GRESB industry partner

We are delighted to announce that 2° Investing Initiative just became a GRESB industry partner and now belongs to the GRESB Strategic Alliance Partnership!

In the scope of our collaboration with Beyond Ratings, we are currently developing a platform for national climate technology and investment transition pathways. This model will cover 10 sectors, including Real Estate*, and will fill an essential market gap in providing, at a country level, sectoral technology pathways consistent with 2°C scenarios. Such technology road maps respond to the existing market demand of governments and investors and support corporate needs to better grasp how they can plan technological investments with regards to climate performance.

When looking for industry partners in the Real Estate sector, we identified GRESB as a leader for sustainability-related data, and connection between our two organisations was natural in terms of mission alignment on sustainability and climate topics. We are looking forward to our collaboration with GRESB in the next months!

* Other sectors already covered in the 2°ii database include: Coal production, Oil&Gas production, Power generation, Aviation, Cement, Shipping, Steel, Automotive, Agriculture (ongoing)