1、SUSTAINABLE FINANCE AN OVERVIEW Sustainable Finance: An Overview Sustainable Finance: An Overview June 2020 Published by Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ) GmbH Headquarters: Bonn and Eschborn GIZ Agncia Braslia SCN Quadra 01 Bloco C Sala 1501 Ed. Braslia Trade Center 70.71

2、1-902 Braslia/DF T + 55-61-2101-2170 giz-brasiliengiz.de www.giz.de/brasil Disclaimer This publication was developed by the “Green and Sustainable Finance Project” in Brazil (FiBraS), launched in cooperation with the Financial Innovation Laboratory (LAB). The FiBraS project is a bilateral technical

3、cooperation project between Germany and Brazil. The project seeks to improve the framework conditions in Brazil for the development of a green and sustainable financial market. The German contribution is funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) and impleme

4、nted by the Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ) GmbH. All opinions expressed in the document are the sole responsibility of the authors, and do not necessarily reflect the position of GIZ, BMZ or the local partners of the German technical cooperation. Contact fibrasgiz.de fo

5、r any comments, doubts or questions or in case you would like to receive the Portuguese translation of this document. GIZ 2020 Written by Sebastian Sommer, Project Director - FiBraS (GIZ) Technical review We are grateful to the colleagues and partners who have provided feedback and comments to this

6、document, including Daniela Baccas (CVM), Matthias Knoch and Colin Van der Plasken (GFA), Daniel Ricas, Christine Majowski, Makaio Witte and Felicitas Koch (GIZ) Graphics design Paulo Barroso (namBBU) FiBras - Finanas Brasileiras Sustentveis Sustainable Finance: An Overview 1. Introduction04 2. Back

7、ground, definition and categories06 3. Rationale and importance09 From a sustainability perspective09 From a risk perspective10 From an efficiency perspective12 4. Effects on different financial sector stakeholders 13 5. Further development and outlook16 Annex 1: International and Brazilian initiati

8、ves, networks, standards and goals 17 References26 Index 4 Sustainable Finance: An Overview Introduction01 It requires a deep transformation of our socio- economic behaviour, structures and norms in order to ensure the stability and resilience of our livelihood. The acute consequences of inconsidera

9、te consumption and production led to emerging sustainability risks for the global community.1 On the other hand, the inevitable transformation of the “way of doing business” as we know it provides opportunities for future competitiveness, innovation, growth, prosperity, security as well as employmen

10、t and safeguards social stability and an intact environment. In order to avoid disruption, it requires timely, collaborative, systemic and forward-looking (inter)action. International agreements like the United Nations Sustainable Development Goals (SDGs)2 and the Paris Agreement on Climate Change3

11、provide clear guidance. It requires unprecedent financial resources to reach national and international sustainable development targets. It entails the involvement of both public and private sector to close this financing gap. The financial sector plays an essential role in mobilizing and allocating

12、 the required capital for the transition. An efficient and stable financial sector (i) requires the right framework of policies and regulation and (ii) needs to integrate sustainability risks in its financing and investment decisions. This document assesses these and other aspects of Sustainable Fin

13、ance (SF). It suggests a definition to develop a common understanding on SF. It further shows the relevance of SF for the financial sector from (i) a sustainability, (ii) a risk and (iii) an efficiency perspective. The document also shows the roles and responsibilities of different stakeholders of t

14、he financial sector and their relation towards SF. Finally, it examines current developments and provides an outlook for the further progress of the matter, stressing the importance of national and international cooperation to develop successful SF solutions. The annex presents a list of the most im

15、portant networks and initiatives in this area. 1 According to the 2020 WEF Global Risk Report, seven of the ten major economic risks which will affect the coming decade are sustainability risks: climate action failure, biodiversity loss, extreme weather, water supply crises, natural disasters, human

16、-made environmental disasters, infectious diseases. 2 https:/www.un.org/ sustainabledevelopment/sustainable- development-goals/ 3 https:/unfccc.int/process-and- meetings/the-paris-agreement/the- paris-agreement FiBras - Finanas Brasileiras Sustentveis 5 Sustainable Finance enables the financial sect

17、or to mobilize and allocate the unprecedent amount of capital required for the transition towards a more sustainable economy The skyline of Frankfurt (Envato Elements) 6 Sustainable Finance: An Overview 02 For the purpose of this document, Sustainable Finance (SF) refers to the integration of sustai

18、nability aspects in the decision-making processes of financial market actors, financial market policy and related institutional and market arrangements that contribute to the achievement of strong, sustainable, balanced and inclusive growth.4 Background, definition and categories 4 Several definitio

19、ns include the following aspects in SF (1) fiscal policy, including Co2 pricing, taxation and subsidies; (2) carbon emissions trading; and/or (3) financial compensation schemes for loss and damage due to results from climate change. In this document, the focus is on the perspective of (public and pr

20、ivate) financial sector actors regarding their decision-making towards financing (e.g. credit), investment and insurance practices and the requirement to disclose such practices.Source: own graphic, based on European Commission (2017) The current international debate on sustainability focuses on env

21、ironmental, particularly climate change related aspects. However, the term of Sustainable Finance is conceptually broader, including the narrower term of green finance, but also social and governance-related aspects. ESG Sustainable Development EconomicEnvironmentalSocialGovernance Traditional Low-C

22、arbon Finance Climate Finance Green Finance Socio-Environmental Finance Sustainable Finance Climate Change Mitigation Climate Change Adaptation Other Environmental Financing Models 7 FiBras - Finanas Brasileiras Sustentveis As with the term SF, there is also no universal definition of the compositio

23、n of Environmental- Social- and Governance-related (ESG) aspects. The following graphic suggests some of the areas within each dimension that are included in the concept: Social Governance Environmental S G E Climate mitigation Adjustment to climate change Protection of biodiversity The sustainable

24、use and protection of water and maritime resources The transition to a circular economy, the avoidance of waste, and recycling The avoidance and reduction of environmental pollution The protection of healthy ecosystems Sustainable land use Access to appropriate health care and prevention of diseases

25、 and epidemics Compliance with recognised labour standards (no child labour, forced labour or discrimination) Compliance with employment safety and health protection Appropriate remuneration, fair working conditions, diversity, and training and development opportunities Trade union rights and freedo

26、m of assembly Guarantee of adequate product safety Application of the same requirements to entities in the supply chain Inclusive projects and consideration of the interests of communities and social minorities Tax honesty Anti-corruption measures Sustainability management by the board Board remuner

27、ation based on sustainability criteria The facilitation of whistle blowing Employee rights guarantees Data protection guarantees Information disclosure Source: own graphic, based on BaFin (2020) 8 Sustainable Finance: An Overview Investment type Amount of capital available Investment types by impact

28、 and capital allocation No consideration of impact Negative screening / exclusion list Positive screening / best in class Selection of impact - related sectors Fully oriented to positive impact Impact Investing Traditional Commercial Investing Socially Responsible Investing (SRI) Sustainable Investi

29、ng (ESG) Thematic Investing Philanthropy The financial sector offers a great variety of investment products. The degree to which ESG-aspects are integrated differs widely. The SDGs can provide a useful orientation for a methodological approach. The application of certain minimum (sustainability) sta

30、ndards can be legally obliged and apply to most financial sector processes. This includes laws to combat money laundering and the financing of terrorism as well as social minimum standards such as the protection against child and forced labour. Despite great investor appetite and the fact that there

31、 is generally no trade-off with financial performance (see further discussion below), the - usually voluntary - further integration of ESG criteria5 is still in an early stage. Impact-only driven investments with no or limited capacity and expectations to provide financial returns will remain an ins

32、trument for selected impact investors, receiving limited asset allocation. Depending on the intent, ESG processes can be undertaken as a risk mitigation or value creation tool. (OECD, 2020) Source: own graphic 5 The following non-exhaustive list provides methods of ESG integration in the order of in

33、creased rigorousness and resource-intensity in application (can be applied in combination): (1) “Exclusion criteria/limits or negative screening”: exclusion or limitation on certain companies, sectors, regions, countries due to ESG-considerations, (2) “Positive list”: identification of companies, se

34、ctors, regions, countries, etc. that are preferred for investment, as a general result of compliance with certain (presumed or proven) sustainability criteria, (3) “Best-in- class-approach”: identification of investees that outperform their peer group for the sustainability criteria chosen, e.g. bas

35、ed on ESG-ratings, (4) “Standards based screening / ESG integration”: sustainability performance corresponds with international standards; investor takes a holistic approach to ESG integration, (5) “Performance- based ESG integration”: linkage of investment or financing product to an incentive (e.g.

36、 lower interest rate) caused by positive ESG performance, (6) Engagement: Exercising voting rights, engaging in dialogue with companies or exerting influence on sector organisations to actively encourage counterparties to adopt a more sustainable approach. (based on BAFIN, 2019) 9 FiBras - Finanas B

37、rasileiras Sustentveis 03 Three interdependent perspectives drive the rationale behind the importance of Sustainable Finance:6 From a sustainability perspective, SF deals with the requirement to finance the transition towards a sustainable socio- economic pathway. To close the financing gap, unprece

38、dented investments are required.7 The financial sector plays an important role in mobilising and channelling these financial resources, thereby “shifting the trillions” of existing financial assets towards low-carbon, sustainable and resilient investments.8 Increasingly, asset owners, investment man

39、agers and banks consider this transition as a business opportunity and align their investment and financing strategy accordingly.9 By redirecting capital flows, SF is a precondition to achieve the Sustainable Development Goals (SDGs) and the Paris Agreement.10 Public resources alone will not be suff

40、icient to close this financing gap. Emerging solutions: The private financial sector, including banks and asset managers, as well as asset owners, increasingly integrate ESG-considerations in their financing decisions.11 Financial instruments such as thematic bonds12 (including transition, green13,

41、social, blue, CAT and SDG bonds) and sustainable lending products14 (e.g. ESG-based or green/sustainability loans) can channel private and public capital to investments and activities with positive environmental impacts, such as renewable energy generation, energy efficiency in production and buildi

42、ngs, sanitation, as well as sustainable forestry and agriculture.15 Public interventions can help to provide a conducive environment by creating rules and regulation as well as (financial and non-financial) incentives that affect risk/return considerations, thereby fostering ESG-based financing and

43、investment decisions. This includes a rethinking of public financing and investments. For instance, blended finance instruments receive growing recognition, as a mean to utilise scarce public resources, following a subsidiarity principle to crowd-in private investments. Rationale and importance 6 Fo

44、r studies that include survey results on the reasons why financial institutions engage in SF, refer to EBA (2020), PRA (2018) or ACPR (2019). 7 OECD estimates that around USD 6,3 trillion of infrastructure investment is needed each year until 2030 to meet the SDGs, increasing to USD 6,9 trillion a y

45、ear to make this investment compatible with the goals of the Paris Agreement. (OECD, 2018) Brazil alone requires an estimated USD 1,3 trillion of investments in green infrastructure. (CBI, 2019) 8 The IPCC refers to a global stock of USD 386 trillion of financial capital (USD 100 trillion in bonds,

46、USD 60 trillion in equity and USD 226 trillion of loans managed by the banking system) that need to be aligned with climate targets. (Climate Transparency, 2019) 9 Recent examples include (i) the worlds largest asset manager BlackRock, announcing early 2020 to put climate change in the centre of its

47、 investment strategy (New York Times, 2020), (ii) Goldman Sachs, reducing its investments in fossil fuel while at the same time identifying climate friendly activities as “a powerful business and investing case”, targeting investments worth USD 750 billion over the next ten years. (Reuters, 2019) 10

48、 The Paris Climate Change Convention requires that financial flows are consistent with a path towards a more climate-friendly economy (Art. 2.1 c). 11 The Principles for Responsible Investment (PRI) initiated by the United Nations in 2005 are a voluntary self-commitment to integrate ESG-criteria in

49、investment decision-making. As of January 2020, the PRI had roughly 2.800 signatories including asset owners, investment firms and advisers with about USD 90 trillion of assets under management. (source: https:/www. unpri.org/) 12 The total issuance of labelled bonds since the issuance of the first green bond in 2007 reached USD 915 billion by January 2020. Issuance of green, social and sustainability bonds grew 40% in 2019. (Environmental Finance, 2020) 13 The growth of the green bond market has caught int