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

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