COP27: time for sustainable finance to walk the walk?
International Sustainable Finance Centre (ISFC)
Apolitical, expertise-led think tank with an advisory practice focused on #sustainablefinance in finance and business
Last week, all eyes were on COP27 in Egypt. The Guardian has a lot of free COP coverage, and Bloomberg Green has removed its paywall for two weeks. Politicians have been making all the right noises, with some bold statements about the need to address climate change as a risk to the very future of humankind. However, of noticeably less prominence has been the presence of the business and financial sectors at this year's COP. Glasgow Financial Alliance for Net Zero (GFANZ) , launched at COP26 in Glasgow has been in the news because of its decision to cut ties with the UN Race to Zero, which requires its signatories to stop investing in new coal projects and also report on the "phasing out" of coal. Carbon Tracker has a good overview of what happened at a hearing held by the Environmental Audit Committee recently, with analysis of the GFANZ situation.
Loss and Damage fund: Global Citizen lists all the countries that have pledged loss and damage finance at COP27. Loss and Damage was added to the COP27 agenda, but progress with negotiations has been slow as disagreements arose about how to finance loss and damage: whether a dedicated facility should be used, or the financing would be done through the many existing structures.
To watch: This week will focus on the negotiations, and it will determine the overall COP conclusions. Bloomberg News has a great article that sums what will be happening this week.
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In the news?
CSRD adopted: In the European Parliament, the Corporate Sustainability Reporting Directive (CSRD) was adopted with 525 votes in favour, 60 votes against and 28 abstentions. The new EU sustainability reporting requirements will apply to all large companies, whether listed on stock markets or not. Non-EU companies with substantial activity in the EU (with a turnover over €150 million euro in the EU) will also have to comply. Listed SMEs will be covered, but they will have more time to adapt to the new rules. The end result? Nearly 50 000 companies in the EU, collecting and sharing sustainability information will become the norm, compared to about 11 700 companies covered by the current rules.
EBRD launches Climate Adaptation Plan: EBRD launched its Climate Adaptation Plan at COP27. The Plan involves integrating climate resilience into project design, building new and enhanced partnerships, and mobilising private finance. You can download the plan and read the press release on EBRD's website.
Climate data demonstrator:?The Global Resilience Index Initiative (GRII),?a multi-partner task force, announced milestones in its development towards an open, standard set of climate metrics and data to measure risks to communities, infrastructure and ecosystems. It will be launched at COP28 in 2023.
Decarbonisation of power systems: US envoy John Kerry at COP27 proposed a voluntary scheme for the private sector to fund the decarbonisation of power systems in the developing world, thus cutting emissions in electricity production.
Money Talks at COP27: This Bloomberg article summarises the debate about the lack of available funding for climate adaptation and support for vulnerable communities: the $100 billion climate finance contributions, trading in carbon offsets, and the Loss and Damage fund.
US net-zero road map: The Net-Zero Game Changers Initiative, chaired by President Joe Biden’s climate advisers, announced 37 “game-changing” technology categories to reach net-zero emissions and promised funds for R&D.
Green bonds with largest share of the sustainable bond market: Issuance of green, social, sustainability and sustainability-linked (GSSS) bonds fell in the Q3, but remained more resilient than the broader bond market with a 16% share of the market in the quarter, summarises the ESGtoday article.
Renting remote wind plants: The Lithuanian Ignitis Group , one of the largest energy groups in the Baltic region, is the first in the world to offer customers the opportunity to rent part of a wind power plant.
Further advancements on global standards: Companies will be required to use climate-related scenario analysis, confirmed the International Sustainability Standards Board (ISSB) , guidance on application.
Fit for 55 modelling results for CZ:?Published results by SEEPIA of model scenarios show that the target of a 55% reduction in GHG emissions by 2030 is achievable, but the 2050 climate neutrality targets need further action.
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Recommended reading
Transition finance report: The International Platform on Sustainable Finance released a report that proposed "Transition finance principles". However, difficult questions about data, measurement, and verification, as well as implementation in practice, remain.
领英推荐
LNG expansion compromises reaching 1.5°C target: Climate Action Tracker published a report with analysis showing that current liquified natural gas expansion plans would prevent countries from achieving Paris Agreement targets. It concludes that the LNG capacity now under construction, coupled with expansion plans, could increase emissions by over 1.9 GtCO2e per year in 2030 - above emission levels consistent with the International Energy Agency (IEA) ’s Net Zero by 2050 scenario.
Banking sector and supervisory priorities: The European Central Bank and 21 national competent authorities conducted a review of climate-related and environmental risks of 186 banks with total combined assets of €25 trillion. All supervisory expectations will have to be met by end of 2024. Guides on climate-related and environmental risks from ECB are available here.
Case studies for impact analysis: A new publication from United Nations Environment Programme Finance Initiative (UNEP FI) collates examples of good practice on impact analysis and target setting, providing inspiration and practical insights for banks.
Buying carbon credits: How should investment in voluntary carbon credits or in companies that hold them be disclosed? This policy brief from Cornillie Jan , European University Institute provides recommendation for regulatory changes on voluntary carbon markets.
Climate change and monetary policy: This quarterly bulletin from the Bank of England explores the macroeconomic implications of climate change and the transition to net-zero, with a UK focus.
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Podcasts
Investigating green finance: In this episode of the BBC ’s podcast The Climate Question, Climate Editor Justin Rowlatt and Graihagh Jackson look into the dark side of companies' sustainability practices, joined by Tariq Fancy , Caroline Harrison , Ulf G. Erlandsson , and Julia Carneiro .
ESG rule-making: AIMA - The Alternative Investment Management Association ' Long Short podcast has an excellent episode with Nadia Humphreys from 彭博资讯 discussing ESG-related regulatory regimes with a focus on transparency and data consistency.
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Events?
Egypt: COP27 Thematic days continue this week with Gender Day and Water Day (Monday), Civil Society Day and Energy Day (Tuesday), Biodiversity Day (Wednesday), and Solutions Day (Thursday).
Tune in for the EU events focused on climate finance (all times below are CET):
Click here for more EU events at COP27.
Prague, Czechia: 安永 , together with ACCA , Czech Institute of Directors – Institut ?len? správních orgán? , ecoDa a.s.b.l - The European Confederation of Directors Associations and BusinessEurope are hosting a one-day conference "Sustainability in Corporate Governance: from concepts to practices". The event will gather prominent experts and practitioners, including Alice Machova , Tomasz Wiatrak , Lara Wolters , and Fredré Ferreira .
London, United Kingdom: On 22 & 23 November, Reuters is hosting a two-day special conference on ESG: "ESG Investment Europe 2022". Speakers include practitioners and thought leaders such as Magnus Billing from Alecta , Nathan Fabian from UN PRI, and Desiree Fixler .
London, United Kingdom: On 22 November, the Responsible Asset Owners global conference will take place in central London. The agenda will cover topics from biodiversity to ESG. You can purchase tickets on Eventbrite website.
London, United Kingdom: On 21 and 22 November, Future of Utilities conference will take place in London's Business Design Centre. The event will see CEOs of major energy and utility companies discuss the solutions for improving the electricity grid and pricing, including electrification of transport and digitalisation of systems.
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