Stan Dupre

Two-thirds of French and German retail investors say they want to invest in an environmentally responsible manner, according to a series of consumer-focused surveys conducted by 2DII in 2019. 43% of respondents interested in sustainable investing said their main goal is to have an “environmental impact” in the real economy. Notably, retail investors appear willing to “put their money where their mouth is:” 64% accepted a hypothetical -5% trade-off on their total returns in order to invest… Show more

Two-thirds of French and German retail investors say they want to invest in an environmentally responsible manner, according to a series of consumer-focused surveys conducted by 2DII in 2019. 43% of respondents interested in sustainable investing said their main goal is to have an “environmental impact” in the real economy. Notably, retail investors appear willing to “put their money where their mouth is:” 64% accepted a hypothetical -5% trade-off on their total returns in order to invest sustainably. Show less

In this paper, we review the marketing materials associated with a sample of 230 "sustainability-themed" European investment funds. Our findings indicated that greenwashing is rampant – even in the socially responsible investing sector. We found that 52% of the funds made environmental impact claims of some kind – and 99% of these claims were misaligned with the regulatory guidance.

For this paper, my team analysed over 7,500 resolutions and identified 500 as climate-related. From 2006-2019, over 150 shareholder resolutions involving some form of requirement to set climate target or a related business plan were introduced. Explicit references to the Paris Agreement are on the rise, with 11 resolutions pushing for consistency with the climate goals of the Paris Agreement. For the first time, in 2018, 3 companies subsequently adopted these targets. While the analysis does… Show more

For this paper, my team analysed over 7,500 resolutions and identified 500 as climate-related. From 2006-2019, over 150 shareholder resolutions involving some form of requirement to set climate target or a related business plan were introduced. Explicit references to the Paris Agreement are on the rise, with 11 resolutions pushing for consistency with the climate goals of the Paris Agreement. For the first time, in 2018, 3 companies subsequently adopted these targets. While the analysis does not prove causality, it represents a first step in understanding the potential impact of engagement.

These figures show the potential of resolutions to turn words into actions, “passing the baton” from investors who committed to aligning their portfolio with Paris goals to their investees. They illustrate the need to further organize and engage in collective shareholder actions, such as the Climate Action 100+ coalition. They also reveal the gap: among 500 climate-related resolutions, only 11 resolutions requested consistency with a 2°C pathway or better. Given the recent investor pledges, we expect Paris-aligned resolutions to rise dramatically in the next few years. Show less

This paper challenges the technical and legal approach envisioned by the European Commission to define and measure the environmental impact of a financial product in the context of the EU Ecolabel.

The paper has been updated in 2020 to provide feedback on the second version of the Ecolabel criteria: https://2degrees-investing.org/wp-content/uploads/2020/03/Draft-feedback-Report-on-the-second-version-of-the-Ecolabel-criteria-for-financial-products-1.pdf

In 2018, the European Commission established the HLEG (High Level Expert Group) on sustainable finance to help develop an overarching and comprehensive EU roadmap. Stan Dupre was one of the 20 members of the group. The report led to regulatory reforms on various aspects such as benchmarks, disclosure requirements and the role of financial advisors. Stan was in charge of drafting the recommendations on financial advice, consumer information and long-termism, which both led to regulatory actions… Show more

In 2018, the European Commission established the HLEG (High Level Expert Group) on sustainable finance to help develop an overarching and comprehensive EU roadmap. Stan Dupre was one of the 20 members of the group. The report led to regulatory reforms on various aspects such as benchmarks, disclosure requirements and the role of financial advisors. Stan was in charge of drafting the recommendations on financial advice, consumer information and long-termism, which both led to regulatory actions by the EC, notably the reform of MIFID/IDD and the introduction of an Ecolabel for financial products. Show less

The discussion paper discusses the absence of evidence that so-called 'green bonds' contribute to scaling up the investments in green projects. It concludes by recommending an alternative concept of climate-aligned bonds. Although the findings were controversial at the time, the same conclusion on the absence of evidence of impact was reached by the Bank for International Settlements (BIS) reached a similar conclusion two years later in "Green bonds and carbon emissions: exploring the case for… Show more

The discussion paper discusses the absence of evidence that so-called 'green bonds' contribute to scaling up the investments in green projects. It concludes by recommending an alternative concept of climate-aligned bonds. Although the findings were controversial at the time, the same conclusion on the absence of evidence of impact was reached by the Bank for International Settlements (BIS) reached a similar conclusion two years later in "Green bonds and carbon emissions: exploring the case for a rating system at the firm level". The debate also triggered the emergence of sustainability-linked bonds. Show less

Published in partnership with the Swiss Federal Office of the Environment, this report provides detailed guidance on how financial regulators and policymakers can support climate transparency by financial institutions and thus help to implement the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).

This paper documented and highlighted a gap in EU regulation on financial advisors practices: opinion polls clearly indicate the widespread existence of non-financial investment objectives among retail clients. However, analysis of current practices in client meetings and questionnaires used by mainstream retailers for client profiling, shows that non-financial investment objectives are hardly ever discussed.

These findings have triggered the reform of MIFID and IDD regulations by the… Show more

This paper documented and highlighted a gap in EU regulation on financial advisors practices: opinion polls clearly indicate the widespread existence of non-financial investment objectives among retail clients. However, analysis of current practices in client meetings and questionnaires used by mainstream retailers for client profiling, shows that non-financial investment objectives are hardly ever discussed.

These findings have triggered the reform of MIFID and IDD regulations by the European Commission in the context of the High Level Expert Group on Sustainable Finance (2018). Show less

ISO (International Standards Organization) Standard 14097 was proposed by the French national standardization body, AFNOR, and approved by ballot in January 2017. The conveners are Stanislas Dupré, CEO of 2DII, and Massamba Thoiye, Manager of the Sustainable Development Mechanism Program of the UN Framework Convention on Climate Change (UNFCCC). Its objective is to create a standard for measuring and reporting financing and investment activities related to climate change

This report deals with the potential integration of climate-related risks into regulatory stress tests and contributed to the design of this approach in partnership with the 2° Investing Initiative the UK and European supervisory authorities in 2017-20.

This paper has contributed to the regulatory discussion in Europe on the short-term nature of corporate disclosures. On the basis of corporate disclosures (including annual reports, regulatory filings, guidance to analysts, etc.) the paper analyzes how far in the future listed companies disclose their plans and financial forecasts, and how they discuss ‘long term risks’ that are only weak signals today but might disrupt their business model in 5, 10 or 20 years. The main conclusion of the paper… Show more

This paper has contributed to the regulatory discussion in Europe on the short-term nature of corporate disclosures. On the basis of corporate disclosures (including annual reports, regulatory filings, guidance to analysts, etc.) the paper analyzes how far in the future listed companies disclose their plans and financial forecasts, and how they discuss ‘long term risks’ that are only weak signals today but might disrupt their business model in 5, 10 or 20 years. The main conclusion of the paper is that the development of forward-looking financial disclosures over the past two decades has nearly exclusively focused on short-term time frames (next quarter to year). Show less

This report offers feedback on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. We recommend that investors disclose the results of the scenario analysis the TCFD prescribes as part of their ‘Strategy’ disclosure. The recommendations was eventually followed by the TCFD leading to the uptake of climate scenario analysis (invented by us) in the finance sector.

This paper analyzes the short-term focus of financial analysts and credit rating agencies. The paper has contributed to trigger the decision of the European Commission to further explore this issue from a regulatory perspective in 2019.

Academic literature calls ‘Black swans’ financial risks that are unpredictable. The paper suggests that certain non-cyclical, non-linear, long-term risks, such as climate-related risks, are actually predicable ‘white swans’ are they are left in the dark… Show more

This paper analyzes the short-term focus of financial analysts and credit rating agencies. The paper has contributed to trigger the decision of the European Commission to further explore this issue from a regulatory perspective in 2019.

Academic literature calls ‘Black swans’ financial risks that are unpredictable. The paper suggests that certain non-cyclical, non-linear, long-term risks, such as climate-related risks, are actually predicable ‘white swans’ are they are left in the dark by the ‘low beams’ of financial analysis that focus on the next 1-5 years. Show less

This paper highlights the short term investment horizons of 'long-term' equity investors, through analysis of the turnover of portfolios by the consultancy Mercer.

The paper has contributed to focus the attention of European financial supervisors on the topic in 2018-20.

This report explores how existing physical asset level data from business intelligence can be enhanced to inform financial analysis, notably on climate, at both company and investment/lending portfolio level. This approach led to the creation of the PACTA model and the company Asset Resolution.

This paper focuses on the need for financing of R&D expenditures in zero-carbon breakthrough technology. It suggests adding another dimension to the concept of climate-alignment of investment portfolios currently focused on existing assets and capital expenditures.

This paper is the first application of climate scenario analysis to an investment portfolio. It led to the creation of the PACTA framework by 2° Investing Initiative and its partners and has stimulated the creation of various me-too solutions by commercial providers.

This research paper looks at the effects of savings taxation on the financing of the economy in France, especially for sectors that are in need of financing, such as the energy transition. It explores the opportunities for integrating climate goals into existing tax incentives on households' incomes from their savings. I has been produced in partnership with France Stratégie, the think tank of the French Prime Minister. One of the recommendations, the reform of MIFID/IDD has been implemented by… Show more

This research paper looks at the effects of savings taxation on the financing of the economy in France, especially for sectors that are in need of financing, such as the energy transition. It explores the opportunities for integrating climate goals into existing tax incentives on households' incomes from their savings. I has been produced in partnership with France Stratégie, the think tank of the French Prime Minister. One of the recommendations, the reform of MIFID/IDD has been implemented by the European Commission 5 years later. Show less

This paper explore the implications of cap-weighted indexes use by passive investors and closet indexers in the context of the energy transition. In partnership with Allianz, HSBC and Morningstar.

The paper outlines for the first time the concept of alignment of a stock index with climate goals, which led to the introduction of climate-aligned benchmarks by the European Commission in 2020.

Climate-related litigation risk is the long-term risk that lawsuits targeting companies with high cumulated past emissions create liabilities, based on the company’s share of responsibility in the cost of global warming. It is not limited to direct emissions and likely to occur in countries where extra- territorial jurisdiction and class action lawsuits exist. The tort cost could include adaptation costs at local level for states and cities (invested by anticipation), thus shortening the time… Show more

Climate-related litigation risk is the long-term risk that lawsuits targeting companies with high cumulated past emissions create liabilities, based on the company’s share of responsibility in the cost of global warming. It is not limited to direct emissions and likely to occur in countries where extra- territorial jurisdiction and class action lawsuits exist. The tort cost could include adaptation costs at local level for states and cities (invested by anticipation), thus shortening the time horizon of risk from the years 2050-2100 to today. This concept note focuses on this type of risk. It was later turned into a research paper in collaboration with the law firm Minter Ellison (https://2degrees-investing.org/wp-content/uploads/2017/09/Carbon-boomerang.pdf) Show less

This paper outlines the financial risks related to carbon emissions for corporates and financial institutions. It first describes the conceptual framework that will be adopted by the TaskForce on Climate-Related Financial Disclosures (TCFD) in 2016-18.

The concept will be further described in following 2Dii and 2Dii/WRI/UNEP publications including:
https://2degrees-investing.org/resource/carbon-risk-for-financial-institutions/… Show more

This paper outlines the financial risks related to carbon emissions for corporates and financial institutions. It first describes the conceptual framework that will be adopted by the TaskForce on Climate-Related Financial Disclosures (TCFD) in 2016-18.

The concept will be further described in following 2Dii and 2Dii/WRI/UNEP publications including:
https://2degrees-investing.org/resource/carbon-risk-for-financial-institutions/
https://2degrees-investing.org/resource/carbon-asset-risk-discussion-framework/
Show less

First study providing a comprehensive mapping of the implications of climate goals for financial regulation, monetary policies and finance-sector related public incentives. From 2014 onwards, the UNEP Inquiry built on this framework to put the topic on the g20 agenda.

State-of-the art review of GHG emissions accounting for the financial sector. 12 methodologies reviewed including Trucost, Inrate, South Pole Carbon, BofA Merrill Lynch, Ecofys, Profundo, etc.
Includes recommendations to policy-makers on mandatory disclosure requirements and incentives.

In this first paper, the 2° Investing Initiative proposes to create a framework that connects the dots between climate goals, portfolio allocation and financial regulation.

The report outlines for the first time the concept of alignement of investment, lending and financial regulation with climate goals, which will then socialized by the UNEP Inquiry and the TCFD, and implemented in France (Article 173) and Europe (sustainable finance action plan).

Current equity research and asset allocation practices poorly integrate financial risks related to climate change. Investors face methodological difficulties and a weak price signal on carbon, but the main obstacle lies in the short-term focus of investment horizons.

Where do banks and institutional investors invest household savings? How do they take long term risks and climate constraints into account? What can policy makers do about it? Book in French. Content featured in this TV documentary: https://www.youtube.com/watch?v=R7YPCRVx9hA

The book (in French) outlines the concepts of climate scenario analysis for investment portfolios and call for the alignment of financial regulation with climate goals, notably mandatory climate disclosure for… Show more

Where do banks and institutional investors invest household savings? How do they take long term risks and climate constraints into account? What can policy makers do about it? Book in French. Content featured in this TV documentary: https://www.youtube.com/watch?v=R7YPCRVx9hA

The book (in French) outlines the concepts of climate scenario analysis for investment portfolios and call for the alignment of financial regulation with climate goals, notably mandatory climate disclosure for financial institutions (which will become the French article 173 in 2015) and the integration of sustainability by financial advisors (which will become the reform of MIFID/IDD in 2020). Show less

The study explores how companies use stakeholder panels (composed of sustainability experts, SRI investors, NGOs, etc.) to inform strategic decisions and provide assurance on non-financial reporting. It concludes that these emerging practices can be lead to major changes in legal requirements regarding reporting assurance and governance frameworks.

Can corporate marketing foster sustainable consumption? What are the business drivers? What are the key tips to communicate effectively?

This study is the first state of the art of assessment frameworks applied by non-financial rating agencies.

The objective of the report is to provide European Union (EU) policymakers with an actionable toolbox for how they can contribute to mobilising private finance for climate-friendly investments.