Investors, Lenders and Insurers
The resources below have been collated to provide non-executive directors with a knowledge hub. This brings together relevant climate change materials from regulators, standard setters and other content creators.
Resources are provided based on our Terms and Conditions.
Newly added resources
|Climate Financial Risk Forum Guide 2020||Considers how firms can plan for the impact of climate policies, assess their exposure to climate-related financial risks and adapt in response. Contains 4 industry-produced chapters on Disclosures, Innovation, Scenario Analysis and Risk Management.||29 July 2020|
|Was June a tipping point for the switch to green?||Findings indicate that asset managers are failing to integrate biodiversity into risk management, corporate engagement and financial decision-making.||15 July 2020|
|BlackRock Shows Resolve, Restraint in First Public Climate Test||BlackRock’s voting record at shareholder meetings shows how it’s delivering on its January promise to put climate change at center of its strategy; it recently rejected the election of directors at Exxon Mobil and Volvo, for making “insufficient progress” on climate disclosures.||15 July 2020|
|Translating targets into temperature: CDP launches new ratings system for climate crisis||CDP launches a new set of ratings gauging the temperature pathway of investment portfolios, funds and stock indices in order to outline future climate-related risks to investors.||06 July 2020|
|Managing climate-related financial risk-feedback from the PRA’s review of firms’ SS3/19 plans||Letter from Sam Woods ‘Managing climate-related financial risk – thematic feedback from the PRA’s review of firms’ SS3/19 plans and clarifications of expectations.||01 July 2020|
|Beyond ‘Business as Usual’: Biodiversity and Finance||More than half the world’s GDP is dependent on nature, which is under threat. There is urgent need for financial sector action on biodiversity. This reportsets out 9 priority sectors with large financial flows and major dependencies or impacts on biodiversity to help with understanding and target setting.||30 June 2020|
|Make My Money Matter||Pensions with Intentions: movement calling for trillions of pounds invested in UK pension to build a better world.||30 June 2020|
|How COVID-19 could supercharge the green bond market||Bonds issued to raise money for projects that are both environmentally sustainable and build resilience into the world economy are proving to be a smash hit.||29 June 2020|
|Trump Administration Targets ESG Funds With 401(k) Rule||The Labor Department seeks to restrict where retirement plan managers can put money, which may hinder sustainability focused funds.||25 June 2020|
|Jeff Ubben quits ValueAct for social investing||Jeff Ubben, told the Financial Times that he’s calling it quits at the investment fund he co-founded: ‘Finance is, like, done.’||23 June 2020|
|Green Investing has Shortcomings||Finance has a crucial role in fighting climate change but a far more rigorous approach is needed, and soon.||20 June 2020|
|How much can financiers do about climate change?||The role that green investing can play must not be misunderstood or overstated||20 June 2020|
|NGFS, ECB and ACPR: a new wave of recommendations and consultations about climate-related risks||Despite crisis triggered by covid-19, financial regulators have not lost sight of the major threat to financial stability: climate change and environmental degradation. Recent publications by the NGFS, ECB and ACPR expand the growing body of resources to address these financial risks.||12 June 2020|
|EU states agree taxonomy for sustainable business||EU green light to proposal for first EU-wide classification system to determine what economic activities can be termed sustainable.||01 June 2020|
Previous reports, analysis and articles
|Organisation / Publication / Author||Link||Information||Date|
|Investors are in a race to find the best models of climate risk||Article exploring how the pandemic, which highlights the threat of sudden, non-linear risks, has dramatically accelerated emergence of new finance trend||12/06/2020|
|ShareAction||Asset managers are blind to biodiversity loss crisis||Findings indicate that asset managers are failing to integrate biodiversity into risk management, corporate engagement and financial decision-making.||11/06/2020|
|Record year for environmental, social investor petitions||Campaigning shareholders are finding common cause with big asset managers on more issues||09/06/2020|
|Shareholder climate rebellions surge despite coronavirus crisis||Investors pile pressure on companies including JPMorgan and Rio Tinto over global warming||30/05/2020|
|Chevron’s Investors Defy Board in Demanding Climate Disclosures||In rare move against Chevron Corp.’s board, shareholders call for disclosure on lobbying efforts to ensure they support global warming mitigation.||28/05/2020|
|Institutional Investors Group on Climate Change||Addressing physical climate risks: key steps for asset owners and asset managers||Five-step guidance for investors to start to identify, assess, monitor and manage physical climate risk.||27/05/2020|
|Institutional Investors Group on Climate Change||Understanding physical climate risks and opportunities – a guide for investors||Guidance for investors that sets out how to integrate the risks and opportunities presented by the physical impacts of climate change into investment processes.||27/05/2020|
|SEC chair warns of risks tied to ESG ratings||Jay Clayton says merging separate metrics can lead to imprecise analysis.||27/05/2020|
|Investors should ask if carbon promises are just hot air – Pledges by oil majors to protect the planet often clash with capital spending plans||If empty promises are used as cover for inaction, it could cause irreparable harm to our planet. Investors need to establish beyond doubt that companies’ commitments to deliver net zero are for real.||17/05/2020|
|Unpriceable Climate Change Stalks $31 Trillion Debt Market||Bond investors are struggling to answer ‘the question of our age’: how much societies are willing to sacrifice in economic growth to counter climate change, and what that spells for the world’s $31 trillion sovereign debt market.||17/05/2020|
Gwladys Fouche and Terje Solsvik
|Norway wealth fund blacklists Glencore, other commodity giants over coal||Norway’s $1 trillion wealth fund is excluding some of the world’s biggest commodities firms from its portfolio for their use and production of coal, including Glencore and Anglo American.||13/05/2020|
|BlackRock accused of climate change hypocrisy||Asset manager voted against environmental resolutions at Australian oil groups, despite Larry Fink’s new sustainability focus.||17/05/2020|
|Federated Hermes International Gemologist||Can we adapt to the new climate normal?||Investors should make climate change a core theme of their interactions with businesses: all companies, not only those people invest in, must begin to focus on adapting for the rougher weather ahead.||01/05/2020|
|ShareAction||Only 35% of European banks claim to have Paris-aligned climate strategy||The European banking sector has made sluggish progress on tackling the climate crisis in the last three years, according to new research by responsible investment organisation ShareAction.||26/04/2020|
|Harvard Law School Forum on Corporate Governance||The Atmosphere for Climate-Change Disclosure||Adding to BlackRock’s ask of companies, State Street Global Advisors has stated that “Beginning this proxy season, we will take appropriate voting action against board members at companies in the S&P 500 . . . that are laggards based on their R- Factor scores and that cannot articulate how they plan to improve their score.”||05/04/2020|
|Keep on climate path, urge investors||Big investors have urged companies to maintain their focus on reducing carbon emissions, even as businesses grapple with the economic fallout of coronavirus. Eight investment groups, including BNP Paribas Asset Management, DWS and Comgest Asset Management, told FTfm that tackling global warming must continue to be a priority for public companies, despite unprecedented pressure on businesses globally after government measures to tackle the pandemic left whole sectors unable to operate. The investors said businesses would be given leeway when it came to climate change this year, but warned against backtracking on targets to reduce carbon emissions.||19/04/2020|
Asset owners disclosure project
|Point of no returns - A ranking of 75 of the world’s largest asset managers’ approaches to responsible investment||The 75 asset managers in this assessment manage more money than the GDP of the US, China and the European Union combined. The overall impression from our research is that much of this money, however, is currently being managed in a way which at best ignores key systemic risks and at worst contributes to them.||09/03/2020|
|The Investment Association||Investors demand companies manage climate change risk ahead of 2020 AGM season||The IA, whose members own one third of the value of UK listed companies, for the first time is asking companies to explain in their annual report the impact climate change will have on their business model and how these risks are being measured and managed||05/03/2020|
|Schroders||Sustainable Investment Report Annual Report 2019||We have a risk budgeting approach to portfolio construction. We allocate risk to themes based on conviction, and we allocate risk to alpha sources and time horizons based on factors including portfolio-specific return objectives, risk limits, expected risk/reward and conviction. ESG factors are incorporated into the risk assessment of the relative attractiveness and valuation metrics of each proposed trade.||04/03/2020|
|EU Technical expert group on Sustainable Finance||Financing a sustainable European Economy||On 9 March 2020, the TEG published its final report on EU taxonomy.|
The EU Taxonomy is a tool to help investors, companies, issuers and project promoters navigate the transition to a low-
carbon, resilient and resource-efficient economy.
The Taxonomy sets performance thresholds (referred to as ‘technical screening criteria’) for economic activities which:
• make a substantive contribution to one of six environmental objectives;
• do no significant harm to the other five, where relevant;
• meet minimum safeguards (e.g., OECD Guidelines on Multinational Enterprises and the UN Guiding Principles on Business and Human Rights).
The performance thresholds will help companies, project promoters and issuers access green financing to improve their environmental performance, as well as helping to identify which activities are already environmentally friendly. In doing so, it will help to grow low-carbon sectors and decarbonise high-carbon ones.
|The Investment Association||Shareholder priorities for 2020 – Supporting long term value in UK listed company||This year the IA has developed expectations on four areas that members believe can be critical drivers of long-term value:|
Responding to climate change, Audit quality, Stakeholder engagement, and Diversity.
This document outlines why investors consider these four issues to be important areas of focus for companies this year and also sets out their expectations for change in 2020.
|Lex in depth: the $900bn cost of ‘stranded energy assets’||These companies (Climate Action 100) have 2,910 gigatonnes (GT) of potential CO2 emissions locked away in their assets. Two-thirds of that is coal, the rest crude oil and natural gas. The question investors must ask is how long these assets can hold their value. Ben Caldecott, director of Oxford university’s Sustainable Finance Programme, says: “Oil companies need to think about [preparing] themselves for when their cost of capital soars.”||03/02/2020|
|Why asset managers cannot be passive on climate change||Climate change is causing the most significant shift in the investment universe I have seen in my 35 years in the industry. But if asset managers are to play a critical role, they must adopt a more radical approach. Our customers, particularly the next generation, regard climate change as the biggest global threat.||30/01/2020|
|CDP||Doubling down – Europe’s low-carbon investment opportunity||European corporate low-carbon investment: scale, needs and benefits; Investment patterns in high-emitting sectors ; closing the investment gap ; Disclosure; CDP’s A-list; featured case study; methodology||30/01/2020|
Huw van Steenis
|What I learned at Davos 2020||Investors and financiers can see the stakes are rising. Firms can see there is real money to be made by helping mobilise capital into financing the transition to a lower carbon economy. Some $90tn may need to be invested over the coming decade, according to the Bank of England.||27/01/2020|
|UBS||Mobilizing capital to help meet climate change goals: an investor’s perspective||Addressing the climate challenge. Against that backdrop this paper addresses two key questions:|
1.Why are current investment levels so far short of what we need to reach the Paris Agreement goals? Many investors want to direct their capital toward a lower-carbon future. The existence of that shortfall has been widely discussed, yet still it persists.
2. How can asset owners invest in a climate-smart future now? How do they integrate known climate risks within their investment decisions, identify and invest in products and solutions that can contribute to a lower-carbon world, while staying abreast of the regulatory and policy developments that could put the world on track to meet the goals of the Paris Agreement? In short, how do they align their investments to a climate-smart future?
|Don’t expect the earth from fund managers on climate change||Fund managers aren’t there to drag their clients out of profitable investments into ones where returns are more meagre. That would be quixotic and almost certainly unsuccessful. For as climate-concerned investors dumped fossil-fuel stocks, thus driving down their value, their socially neutral peers would take advantage of the mispricing that came about, meaning the net effect was blunted. In the case of climate change, it could even be detrimental. Put Royal Dutch Shell out of business by dumping its shares and state-run oil companies in Asia or South America might pick up the slack, creating more polluting output.||18/01/2020|
Larry Fink, CEO
|Larry Fink’s letter to CEOs and clients||Blackrock asks companies to publish SASB- and TCFD-aligned disclosures, and as expressed by the TCFD guidelines, this should include the company’s plan for operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized.||14/01/2020|
|Hermes Investment Management||Climate-Related Financial Disclosures Report 2019||“The investment management industry sits in a unique position, where its actions could continue to compound the issues we currently face, or it could instead use intelligent and considered stewardship of capital to effect genuine and positive change. We have a responsibility as an industry, and indeed as a business, to make the right choice.|
In this report, we lay out our approach to identifying and managing climate risks and seizing opportunities as a business, ranging from our involvement at the policy level in the development of climate-rated initiatives, to the way we ensure that everyone at Hermes factors the weight of the climate emergency into the work that they do.”
Saker Nusseibeh, Chief Executive
|Accounting for sustainability||Financing our future - Update||A growing number of leaders from each part of the investment chain and wider capital markets community are taking action to direct finance towards sustainable outcomes. It is only through collective leadership and by reconnecting with individual savers, investors and beneficiaries, that we will find solutions to the barriers which remain.||11/12/2019|
|Influence Map||Understanding Asset Managers’ Climate Engagement Scores and Portfolio vs Paris alignment||The world’s 15 largest asset management groups (with collectively $37Tn in assets in all classes), are overweight in companies deploying brown technologies in four key sectors: automotive, oil & gas, electric power and coal production, representing roughly 10% of global equity markets. Increasingly, forceful engagement with the companies in these sectors to hasten their transition to low carbon technologies must occur rapidly.||29/11/2019|
|ShareAction||Decarbonising Cement: The Role of Institutional Investors||Cement accounts for 8% of global emissions. This report outlines why it's so carbon-intensive, how the industry can decarbonise, and why institutional investors need to act.||09/10/2019|
|Climate action 100+||Climate Action Progress Report 2019||Provides an overview of the activities that have been undertaken and observed progress against the initiative’s goal.||02/10/2019|
|Climate action 100+||Investors are getting closer to a climate change tipping point by Stephanie Maier, director of responsible investment at HSBC Global Asset Management||Press summary of the Climate Action 100+ 2019 progress report. Investment giants to step up calls for corporates to set net zero goals.||02/10/2019|
|Legal & General Investment Management||Active ownership||LGIM supported more shareholder resolutions on climate change than any of the world’s 20 largest asset managers|
We published our second annual ranking of climate leaders and laggards, naming 11 companies that have failed to demonstrate sufficient action, including ExxonMobil
We co-filed our first ever shareholder resolution, which led to oil major BP adopting industry-leading climate targets 2019 report