UNEP Finance Initiative - Changing Finance, Financing Change

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Changing Finance, Financing Change
Liesel van Ast, Signatory Relations Manager, UNEP FI

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CONTENTS
CHANGING FINANCE, FINANCING CHANGE
• Sustainable finance in context
• What is UNEP Finance Initiative?
• How are Financial institutions working towards sustainable
finance?
• Banking
• Insurance
• Investment
• Opportunities in Eastern Europe – Ecosystems, Climate Change
• Energy efficiency
• Regional Roundtable for Europe 2017

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SUSTAINABLE FINANCE AGENDA
IN CONTEXT
PARIS AGREEMENT
Limit temperature increase to
1.5-2˚C above pre-industrial
levels.
SUSTAINABLE
DEVELOPMENT GOALS
17 goals for Sustainable
Development by 2030.
Contribution to international policy objectives.

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SUSTAINABLE FINANCE AGENDA IN CONTEXT
• Mounting environmental issues are changing business operating
environment (pollution, resource depletion).
• Financial sector plays key role in economic development
(commercial banks hold 90-95% of financial sector assets)
• Better risk management and optimizing business opportunities
• $22.89 trillion of assets managed under responsible investment
strategies (2016 Global Sustainable Investment Review).
• Environmental Social and Governance (ESG) integration is the
systematic and explicit inclusion of material ESG factors into
investment analysis and investment decisions.
• Long-term value creation and prudence – from sustainable
financial products and services to sustainable financial
institutions.
• FSB Task Force on Climate-Related Financial Disclosures
recommendations apply to financial sector, including banks,
insurance companies, asset managers, and asset owners.
TCFD: “Large asset owners and asset managers sit at the
top of the investment chain and, therefore, have
an important role to play.”

5. Partnership between UN Environment and
financial sector to support the global
development of financial institutions that
integrate sustainability as a wealth creation
driver and which contribute to the UN
Sustainable Development Goals through
their financing activities.
WHAT IS UNEP FI?

6. HOW ARE FINANCIAL INSTITUTIONS
WORKING TOWARDS SUSTAINABLE
FINANCE?
Leadership:
• Collaborative projects to
develop and pilot new tools /
guidance
• Cutting-edge research
• Policy engagement
• Leadership initiatives
• Platform for innovation and
first movers, e.g. Portfolio
Decarbonization Coalition –
28 asst owners and
managers allocating capital
towards low-carbon
economy to decarbonise
USD 600 billion.
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Knowledge development
• Hands-on guidance on
sustainable banking, such
as Guide to Banking and
Sustainability
• Trainings, e.g.
environmental and social
risk management
• Case studies and best
practice
• Tools, e.g. human rights
• Peer exchange

7. Project to support banking sector in developing green and inclusive
financial products and services for achieving national development
goals. Key UN Environment activities included:
• Sustainable Finance Forum
• Working group and market study on developing green credit fund
• Policy briefs and engagement with policymakers on green finance
• Feasibility study to identify opportunities to integrate green
economy concepts, green modelling, and sustainable finance in
national education programmes
• Training
SUSTAINABLE FINANCE IN MONGOLIA
INDUSTRY: BANKING

8. Financial Stability Board: Task Force on Climate-Related
Financial Disclosure
• Strong Political Signaling
• Recommendations strongly focus on forward-looking
assessment of climate risks and opportunities
 Not just about climate resilience. Financial institutions will
better understand where and how to adapt their strategies and
portfolios to benefit from financing the future we want
BANKS PILOTING TCFD
RECOMMENDATIONS
Pilot Project:
• Group of 8-12 first-mover banks
• Jointly work towards implementing the TCFD recommendations
and develop the scenarios, models, indicators, and
methodologies needed
CLIMATE CHANGEINDUSTRY: BANKING

9. y
stor
le
Over USD 30 trillion
global assets
under management
ver USD 5 trillion
orld premium volume
Linking insurance industry and policy agendas
through research and market practice
• Sustainable Insurance Forum for Regulators
and Supervisors (SIF)
• Global sustainable insurance underwriting
guidelines
• Insurance Development Goals linked to
UN Sustainable Development Goals
• PSI and ICLEI to set global agenda for
insurers and cities to shape resilient,
sustainable urban future.
INDUSTRY: INSURANCE

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SUPPORTING More Transparent And Sustainable
Capital Markets
Sustainable Stock Exchanges (SSE) initiative
• 63 Partner Stock Exchanges, Includes Belarus,
Kazakhstan, Latvia, Lithuania, Belgium, Estonia,
Romania, Poland, Germany, France, Turkey, UK,
Spain, Norway, Sweden, Luxembourg.
• 1 Investor Working Group
• 1 Corporate Working Group
• 4 UN partner organizations
Stock exchanges globally list over USD 70 trillion of
market cap. 70% of listed equity market in SSEI.
LSE: Guidance for
issuers on the
integration of ESG into
investor reporting and
communication
(February 2017)|
INDUSTRY: INVESTMENT
• 12 stock exchanges have Environmental, Social and Governance
(ESG) disclosure listing requirements
• 15 provide guidance on ESG corporate disclosure
• 38 provide ESG indices
• 11 list green bonds

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OPPORTUNITIES IN
EASTERN EUROPE
Potential for GEF funding to expand ecosystems work to
Eastern Europe
Quantifying natural capital risk in financial terms - database of
natural capital dependencies by industry sector to create
regional or sectoral natural capital heat maps for financial
institutions. Funded by the Swiss State Secretariat for
Economic Affairs (SECO), the MAVA foundation, FIs.
Countries seeking UNEP FI support to help Financial
Institutions Access Green Climate Fund
• Currently low number of accredited financial
intermediaries from developing countries due to capacity
and awareness limitations.
-> UNEP FI proposal for new initiative to help financial
institutions directly access the GCF.
-> Technical assistance to help 20 National Designated
Authorities include financial institutions in GCF country
strategic frameworks.

12. • Support NDAs in process to nominate FIs for GCF
accreditation
• Support NDAs in identifying and prioritising funding
proposals
• Help developing countries directly access the GCF
through their financial institutions by:
 Raising financial institutions’ awareness.
 Capacity building to develop financial institutions’
knowledge on financing mitigation and adaptation
 Helping financial institutions become GCF accredited.
 Supporting financial institutions in developing funding
proposals for direct access to GCF funding.
 Technical assistance and targeted grant support to 20
financial institutions.
CLIMATE CHANGEOPPORTUNITIES IN
EASTERN EUROPE

13. ENERGY EFFICIENCY: G20 INVESTMENT AND
UNDERWRITING TOOLKITS 2017
• Promoting supportive policies for
energy efficiency investment as
part of the G20 Energy Efficiency
Finance Task Group
• USD 4 trillion of investor assets
+ 122 banks commit to further
embed energy efficiency finance
into business
• UNEP FI, one of the three partners
of the G20 Toolkit, led the
production of the section on private
finance.
G20 Energy Efficiency Finance Task Group;
International Energy Agency (IEA), UNEP FI and
the International Partnership for Energy Efficiency
Collaboration (IPEEC).

14. SCALING UP SUSTAINABLE FINANCE
ACROSS BANKING, INSURANCE AND
INVESTMENT IN EUROPE
GENEVA, 16-17 OCTOBER 2017
 Insights into sustainable finance leadership.
 Emerging knowledge and good practice
 Highlight issues on the horizon
 Explore future policy direction and market practice to
shape the industry.
 Convene financial institutions and key stakeholders
 Celebrate 25 years of sustainable finance
CONTACT: Liesel van Ast at liesel.vanast@un.org