Asset Impact’s Post

In terms of truly driving capital into sustainability, this is the ultimate "top-down" approach. Interested to see how this shakes out (I'm sure the SEC is as well). "The metric in question is the green asset ratio (GAR), with mandatory disclosure set to kick in from January. Supported by the European Central Bank and lambasted by the finance industry, the ratio reflects the share of a bank’s balance sheet that aligns with the EU’s list of sustainable business activities." #sustainableinvesting #esg

As the EU moves towards a decarbonised economy, financial institutions may face transition risks in their credit portfolios. These risks can, in turn, become drivers of credit, market, operational, and liquidity risk. To address the issue, the European Central Bank (ECB) recently published a report on alignment assessment for the European banking sector, with the goal of guiding these financial institutions towards alignment with EU climate objectives.

Environmental, Social and Governance (#ESG) remains at the forefront of discussions within the investment industry, with the landscape evolving significantly over the last few years. In our latest whitepaper, Fixed income and ESG - where are we now?, we explore many of the developments within this space and the trends, challenges and opportunities that have emerged. We look at the quality of data, whether the ‘greenium’ makes sense and what central bank influence means for sustainable investors. Read our latest whitepaper: https://okt.to/LZ4i0h #esginvesting #fixedincome

📢ECB Supervision Blog: The European Central Bank have published their latest supervisory blog stating that “Eight years ago in Paris, global leaders reached a landmark agreement, committing to limit the global temperature increase to below the calamitous threshold of two degrees Celsius. Alarmingly, the latest scientific evidence indicates that we are currently on a global heating path of 3°C. Through the risk-based lens of a banking supervisor, this is seriously concerning – the longer we wait to transform our economy, the more disruptive the transition and the greater the risks that will materialise on banks’ balance sheets. It is therefore crucial for banks to identify, measure and − most importantly − manage transition risks, just as they do for any other material risk.”   👉Read it in full here: https://lnkd.in/eVQeBXmT     #ECB #SustainableFinance #ESG #TransitionFinance

Dear Network, For banks already engaged towards Net Zero commitments or about to do so, here is a valuable paper from European Central Bank on “net zero commitments by the world’s largest banks” (pointing that 25 out 30 G-SIB made public net zero commitments). https://lnkd.in/e8_RpAYp Of course it includes many relevant and detailed areas of improvements identified at disclosures and transitions plans levels such as: § Requirements to better frame carbon-intensive sectors, or § Use of carbon credits /offset lack sufficient scientific grounding It also develops interesting arguments on how greenwashing allegations may have supervisory consequences. But perhaps one of the most interesting part is to get how these private and voluntary initiatives may fall into ECB supervision, not extensively, and indirectly. And this written as such: to mitigate the risk of greenwashing/misleading disclosures, it could be worthwhile to integrate “a comprehensive framework for transition plans into bank’s management”. This could be seen as a natural evolution where KPI from voluntary initiatives (or made under some pressure) and KPI required for supervision collide. It may be the beginning. This seems quite logic from a technical point of view, since having some sets of transition metrics supervised (eg, under CRR among others) and other unsupervised leave room for uncertainties and weaken the whole picture. From a larger point of view, it seems logic either as the pressure is continuously increasing for regulation on mitigation policies. Volontary initiatives are still needed, but more stringent ones, and for some, to become "almost supervised". European Central Bank Glasgow Financial Alliance for Net Zero (GFANZ) FSB Task Force on Climate-related Financial Disclosures (TCFD) International Sustainability Standards Board (ISSB) International Energy Agency (IEA)

Public and Development Banks (PDBs) are responsible for delivering USD2.3 trillion in global finance annually. To enhance #ClimateAction, it is critical these banks align their lending with the goals of the Paris Agreement. The Public Bank Climate Tracker Matrix is an interactive tool developed by Third Generation Environment to analyze how PDBs are mainstreaming #ClimateChange in their work. Access the resource in our #ClimateToolbox here 🔽 https://bit.ly/42xzKlx

"Central Banks from the major economies are using financing to push the economy away from high-carbon assets. In a meeting held past february with ECB, FED, the UBS representative, Judson Berkey, told that the finance industry was being asked to align loans, investments and capital-markets portfolios with a global warming trajectory of 1.5C, while the planet may in fact be hurtling toward a 2.8C increase from pre-industrial times, he noted.  “Banks are living and lending on planet earth, not planet NGFS,” Berkey told the group in an impassioned speech, alluding to the Network for Greening the Financial System, a collection of central bankers that creates model scenarios for how the energy transition may evolve."  Private capital will need to cough up the lion’s share of the $5 trillion to $10 trillion in annual commitments needed to pay for the green transition, and according to hedge fund billionaire Bridgewater Associates founder Ray Dalio, that will only happen if there’s “a return on the money. Inside the finance industry, irritation hit a new level after the publication of an ECB paper in January stating that 90% of the euro-zone banks it analyzed are “misaligned” with the goal of limiting global warming to 1.5C. The central bank called this a “staggering” outcome." How can this pledge affect the real economy? Well, "Nvidia Corp., the wildly successful tech colossus, has an implied temperature rise of 4C and cosmetics giant L'Oreal SA is at an eye-popping 6C, meaning their business models are currently aligned with a trajectory of devastating global warming, according to data compiled by Morningstar Inc.", which means to these companies, as others, will be lacked access to financing. But not only big companies will be affected as companies and househols with high carbon indexes will be in trouble to access financing or paying them with extra costs. How can this impact our daily life? Think about inflation as one of the setbacks but the rise of extremisms.  Energy transition to a low-carbon economy is crucial, but pushing too hard, too fast we'll end up with a rift.  #ESG, #decarbonization #climatechange #sustainablefinancing

Environmental, Social and Governance (#ESG) remains at the forefront of discussions within the investment industry, with the landscape evolving significantly over the last few years. In our latest whitepaper, Fixed income and ESG - where are we now?, we explore many of the developments within this space and the trends, challenges and opportunities that have emerged. We look at the quality of data, whether the ‘greenium’ makes sense and what central bank influence means for sustainable investors. Read our latest whitepaper: https://okt.to/KDgf5O #esginvesting #fixedincome

Discover how central banks can safeguard our planet! A new report by WWF and the Sustainable Finance Lab urges financial leaders to address nature loss as a growing threat to global stability. #FinanceForNature #Biodiversity #SustainableEconomy #banking #news #finance #fintech https://lnkd.in/e-dipUzY

Do you know who's the latest euro 350bn bond investor to align its portfolio with ESG targets? 🤔 And the answer is… The European Central Banks ⁉ I regularly get asked "what is the urgency for corporates to take actions on Sustainability?". Well, there are many reasons starting with “saving humankind” … 😯 The ECB's decision is another element to strongly consider when assessing and ultimately launching a serious/transparent ESG transition plan that must include supply chains. Why supply chains❓ Because they account for 90% of your total Sustainability impact. Hence an exit decision by the ECB could come from your suppliers and not your internal actions. As climate change is accelerating, it is reassuring to see more and more institutions putting their values into good practice. Who's next?... 😇 To learn more about it: www.koaloo-fi.com Koaloo.Fi #esg #sustainablefinance #fintech European Central Bank Ruxandra Ionescu Philippe HENRY Béatrice Collot Zidane Mohamed Michael Mansard Diane Lucotte le Visage ⭐Matthieu Lerebours Matthieu Guillot Didier Philouze André Casterman Caroline Peyrat Sinoun Daumont • Laura Pho Duc • Yuliana V. Fritz Queeny Matta, ACA, CPA Stephanie Fielding Nicolas Couture-Miambanzila Patrice Hiddinga Sabine Lochmann Beaujour Urvikkumar Patel Rajat Mehta Antoine FULPIN https://lnkd.in/dyvDgvTF