1、 c/ Marqus de Villamejor, 5 28006 Madrid Tlf.: 34-91-520 01 00 Fax: 34-91-520 01 43 e-mail: afiafi.es www.afi.es Green Finance in the UK and Spain: latest developments and key service providers Final report July 1st, 2020 Information collected for Green Finance in the UK and Spain: latest developmen

2、ts and key service providers Final Report 2 Contents Foreword . 3 Acknowledgements . 4 1. Motivation, purpose and target audience . 5 2. Methodology . 6 3. Evolution and current situation in the provision of greening services for companies in Spain and the United Kingdom. A work in progress . 7 4. C

3、atalogue of Service Providers . 19 United Kingdom . 20 Chartered Banker Institute . 20 Legal clean development mechanisms (CDM) and joint implementation; the latter two via projects. Those are considered the first global effort to reduce global warming. The worldwide condition of the climate crisis

4、has been for years an argument to allow countries with emissions reduction and limitation targets who consider that reducing emissions in their own country was too onerous, could choose to pay a cheaper price to reduce emissions in other countries. Since 1995 (COP1 Berlin) to forthcoming COP26 in Gl

5、asgow, 26 Conferences of Parties (COP) body of the United Nations Framework Convention on Climate Change-, most transcendental of all have been the already mentioned Kyoto one (COP3) and COP21 held in Paris in 2015. It coincided with the United Nations adoption of the 2030 Agenda for Sustainable Dev

6、elopment, set out in the 17 Sustainable Development Goals (SDGs), which replaced the Millennium Development Goals set in 2000 for 2015. SDG 13 aims at “taking urgent action against climate change and recognizes that implementation of the Paris Agreement is essential to achieving the SDGs. Since then

7、, the 2030 Agenda, SDGs and the Paris Agreement have been walking hand in hand. A lot has happened in the last four years. However, one turning point was the speech by former Financial Stability Board Chairman and Governor of the Bank of England Mark Carney Breaking the tragedy of the horizon as eng

8、agement from financial sector seems to move on. Greenfinance is a key priority for the UK Government to support delivery the ambitious strategy, to driveeconomic growthand to ensure the UK remains a key driving force in enabling the global transition to a low carbon economy. Green Finance in the UK

9、and Spain: latest developments and key service providers Final Report 4 Acknowledgements This work is the result of a joint effort of the British Embassy in Spain and Afi, Analistas Financieros Internacionales. The authors are enormously grateful to all the representatives of the institutions kindly

10、 attending the calls, videoconferences and requests of information during the difficult times caused by the COVID_19 crises. Green Finance in the UK and Spain: latest developments and key service providers Final Report 5 1. Motivation, purpose and target audience The transition to a decarbonized eco

11、nomy is one of societys biggest challenges. For this reason, today it is one of the elements that is receiving the greatest attention by public authorities as well as economic and financial agents. This should not be surprising given the challenge that society faces in complying not only with the Pa

12、ris Agreement but also with the Sustainable Development Agenda. Completing the transformation of how we live, produce, consume, invest in, remunerate resources and care for each other and the environmentour economic and social model- will take time. Its nature has a strong global component that requ

13、ires a high degree of coordination at the international level. Meeting the objectives and delivering the global transition to a low carbon economy will require unprecedented levels of investment in green and low carbon technologies, services and infrastructure. While this is being achieved, purpose

14、for which the forthcoming COP-26 in Glasgow will be key, the action of the market itself is allowing timely progress in the transition of a diversity of agents. In this sense, together with the evolution of supply and demand for sustainable financing, in recent years has emerged a growing number of

15、providers of (new) products and services that provide solutions for the (new) needs or demands framed in the new paradigm of Sustainability. It is therefore relevant to provide light and clarity to these new products and services to facilitate, encourage -in fact, engaging-, other agents, like more

16、than a million of small and medium companies that find difficult to identify a clear greening and sustainability roadmap to follow. This work conducts a comparative study of the evolution of the Spanish and British market in this field. It provides a structured catalogue of a representative sample o

17、f the existing such providers that can support such transformation. The final result is a Guide that tries to ease the multiple decisions companies are to take on a day to day basis, and provide a detailed view of a good range of initiatives that were born with a clear mission: to accompany others i

18、n the transition path to sustainability. In short, the objective of the study is to identify the opportunities for the Spanish and British economic sectors through the identification of solutions and their providers so that the transition process can be as quickly and efficiently as possible. Green

19、Finance in the UK and Spain: latest developments and key service providers Final Report 6 2. Methodology Beyond the permanent coordination with the British Embassy in Madrid, Afi has collected information on the services market for ecological transition and greening in a broad sense, including gener

20、al information on the current situation of the market. The existing secondary information (sectoral reports, corporate reports, news and web pages) has been the primary focus, together with specific information directly collected from providers whose products and services aim to support the sustaina

21、ble transition and greening of the respective markets (Spain and the United Kingdom). Green Finance in the UK and Spain: latest developments and key service providers Final Report 7 3. Evolution and current situation in the provision of greening services for companies in Spain and the United Kingdom

22、. A work in progress The emergence of new services and products to support the green transition process and to increase the linkage of sustainability with economic and financial activity is a characteristic element of recent years. The purpose of these new services and products is often diverse and

23、ranges from the increase of climate related information available, to the management of data, the support in the design of more sustainable products and services and the improvement of transparency and public information. The implementation of these initiatives has been supported by an increasing ac

24、tivity by public and private entities developing support services for this purpose. The current needs for transitioning into a sustainable development paradigm are enormous and the gap between and so on is still high, it should be noted that the number of actors involved in reducing this gap is nume

25、rous. The first global initiatives that emerged in this international arena responded to the sustainability challenges that were just beginning to break the surface of collective business consciousness. Figure 1. Timeline: an overview Source: Afi Green Finance in the UK and Spain: latest development

26、s and key service providers Final Report 8 The reason why the very first initiatives were closely linked to climate change is mainly due to the change that the Kyoto Protocol in 1997 brought into the global agenda. Accounting turned out to be relevant at that point in time. It, soon emerged initiati

27、ves aiming at assisting on the proper management and disclosure of such “new type of relevant information”. And revealed that some corporations are responsible for higher greenhouse gas emissions than many national states. Figure 2. The 1990s Source: Afi Access to this type of information has proved

28、 to be very useful for the strategic management function of investors, management teams and regulators by allowing measurement and understanding of the environmental impact of a more diverse and heterogeneous range of economic activities, and, in the long run, limiting the associated risk. The so-ca

29、lled Stern Report, commissioned by the UK Government and released in 2005, was a key point of inflection. It claimed that climate change is the result of a major market failure with enormous economic implications beyond the “mere” environmental and social dimensions. The scientific analyses that exi

30、sted at that time were already robust enough for the subsequent debate to focus on the “capacities for action” rather than on the “needs for action”. In addition, it was then first claimed that the benefits of action far outweighed those of inaction, but only if action kicked-off at the time. Figure

31、 3. The 2000s Green Finance in the UK and Spain: latest developments and key service providers Final Report 9 Source: Afi With a somewhat broader approach, and supported by the United Nations, one of the first initiatives of the financial sector in the field of sustainability emerged in 2006 under t

32、he assumption not as widespread then as it is today- that non-financial aspects could influence the financial return on investment portfolios. The launch of the Principles of Responsible Investment (PRI) in 2006 initiated a massive mobilization of funds under this approach that has continued to grow

33、 to this day, with a key inflection point in the Great Depression. Under a non-binding approach, PRI were an aspirational approach that is now beginning to turn into regulation at European level. In fact, the serious consideration of such information as a fiduciary duty of asset managers in their in

34、vestment and administration decisions places the consideration of Environmental, Social and Governance (ESG) criteria at the same level as other business-as-usual factors (sectoral, technological, market, economic, financial). Since then, asset managers and other financial institutions have increasi

35、ngly relied on ESG rating agencies to evaluate, measure and compare the ESG performance of companies, an element they incorporate into their risk management process and, in some cases, to define investment strategies. This type of informational service providers has grown in recent years, offering e

36、ssential information for the incorporation of ESG elements in investment management. In this context, other market players have adapted their services of index provision, management software, databases and even standards that allow to identify which ESG elements are relevant i.e. material- in each s

37、ector and company. Today, empirical evidence is beginning to show that the relationship between ESG and financial performance is positive. Also, the combination of fiduciary duty and the broader recognition that long-term investment sustainability is a must, has turned social, environmental and corp

38、orate governance concerns increasingly important. In 2007 the European Investment Bank (EIB) carried out the very first issuance of a Green Bond (Climate Awareness Bond) by creating a new category of bonds whose purpose was Green Finance in the UK and Spain: latest developments and key service provi

39、ders Final Report 10 linked to the funds obtained. Driven also by other development banks and multilateral institutions, this segment of financing evolved allowing for the emergence of a cast of entities that created a new category of sustainable financial products, based on purpose and transparency

40、. Securities exchanges, companies, structuring agents and other auxiliary service providers have since adapted to this reality. In this vein, although beyond the use of funds to combat climate change, the so-called Green Bond Principles emerged in 2014. These principles, appropriately updated at a l

41、ater date, were developed with the guidance of issuers, investors and environmental groups. They serve as voluntary guidelines on the recommended process for the design and issuance of Green Bonds and promote transparency, disclosure and integrity in the development of the green bond market. In this

42、 market, one of the main and early issuers is Iberdrola: the first Spanish issuer back in 2014 (the second company to issue such bonds after Frances EDF) has now become one of the worlds largest private issuers of green bonds. The purpose of Iberdrolas investments is to support projects in renewable

43、 energy, transmission, distribution and smart grids that contribute to the transition to a low- carbon, climate-resistant economy, in line with their sustainable development commitments. However, not all the destinations of green bond issuance are referred to the energy sector, but transportation, c

44、onstruction and infrastructure as well as the financial sector are those that concentrate the most emissions. In the United Kingdom, it is worth noting the issuance of Barclays in 2017 as the first financial institution to link an issuance to this typology of bonds. The funds were intended to financ

45、e mortgage loans for residential properties in England and Wales estimated to be in the top 15% of the best performing buildings in terms of carbon intensity. This is an area -efficient and sustainable buildings- where development is increasing. Supply of finance by a growing number of entities via the so-called green mortgages is yet an incipient reality, but already identified. This funding supply coincides with a greater capacity of real estate agents to articulate demand, other financial and energy agents to design models