Idea Exchange – James Robertson
Events & Webinars
- Event: 2019-2020 Green Finance Seminar Series – Session 4: Promoting Innovative Green Financing for Belt & Road Initiative
Organised by: HKQAA
Date & Time: 17th July 2:30 – 5pm
Location: Theatre R1&R2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong
The Hong Kong government has prioritised green finance as a key strategy, aiming to capitalise on the city’s financial strength to foster sustainable businesses.
HKQAA is engaging business leaders and environmental experts to shed light on the development of green finance in worldwide and the potential business opportunities brought by green finance.
Felix Lam, Green Finance Advisor of Friends of the Earth (HK) will share his latest insights on this topic.
For more information, please visit the website: https://www.hkgreenfinance.org/event/seminar-of-2019-2020-green-finance-seminar-series-session-4-promoting-innovative-green-financing-for-belt-road-initiative/
- Webinar: Insurance Sustainability Development Goals (iSDGs)
Organised by: Swiss Re and UN Environment Programme’s Principles for Sustainable Insurance Initiative (PSI)
Date & Time: 8th July 7 – 9pm HKT
Currently, many insurance products and solutions already support achieving the SDGs but the industry lacks a systematic mapping of such products and solutions, a clear narrative, and methods to measure impact. There is also a lack of understanding on the types of insurance products and solutions needed—both existing and new—to support the achievement of various SDGs, and how such products and solutions can be developed and brought to scale. Finally, there are no global goals or targets for the insurance industry linking its insurance portfolios to the SDGs.
For this third event, there will be three sessions on how insurance products and solutions can contribute to achieving the SDGs. Specifically, speakers will discuss an agenda-setting PSI collaborative initiative to develop “Insurance SDGs”, including how non-life and life & health insurance can support the SDGs, and emerging SDG opportunities for the insurance industry.
This event is part of the PSI-Swiss Re online event series 2020 on “Sustainability leadership in insurance“.
Reports & Research
- Book: ESG Investment – Opportunities and Risks for Asia (Free to download)
Published by: Asian Development Bank (ADB) Institute
ESG investment has the potential to bridge the gap between traditional capitalism and the newer concepts of shared economic and social value and sustainable and inclusive finance. It can also act as a driver for incentivizing the private sector to tackle environmental and social challenges, such as those related to renewable energy, employee training and education, and the gender gap. These benefits can in turn help to boost corporate value and economic growth.
However, concerns remain on many issues, such as unclear and dispersed criteria for sustainable investment, the low quality of non-financial data, lack of disclosure, and resource misallocation risks. These obstacles are critical for many countries in Asia and the Pacific whose stages of development have not yet reached those of more developed countries.
This timely book investigates the current state of ESG investment and examines the risks and benefits using an evidence-based approach. It aims to contribute to developing a framework for future analysis and monitoring to ensure the growth of ESG investment while exploring innovative ways for economies in Asia to leverage the benefits for sound and sustainable development.
- New Report: Investing with SDG outcomes: A five-part framework
Published by: PRI
Following on from the PRI’s The SDG investment case – which laid out why the SDGs are relevant to investors, why there is an expectation that investors will contribute and why investors should want to – this report takes the next steps by outlining a prospective framework for action. It is meant as a useful reference for all PRI signatories, providing sufficient scope for asset owners, investment managers and service providers to differ in the specific actions they undertake to shape outcomes in line with the SDGs.
This framework is the starting point for a deeper and ongoing body of work on the subject, and will be the basis for future guidance and support.
- New Research: Sustainable and actionable: An ESG study of climate and social challenge for Asia
Published by: Economist Intelligence Unit
Sustainable and actionable: An ESG study of climate and social challenge for Asia is an Economist Intelligence Unit report, commissioned by Amundi. It explores environmental, social and governance (ESG) investing in fixed-income markets and examines the evolution of “green” debt from an issuer, investor and regulatory perspective. Central to the study is a question about market progress and if it has been enough, in Paris Agreement terms.
The research is based on in-depth interviews conducted with 14 executives at asset-owner firms, regulatory bodies and finance professionals at academic or advisory organisations alongside extensive desk research and historical analysis. While the study concentrates on stakeholders and market players in Asia, the conclusions and implications are globally minded.
- New Report: Towards a Better Hong Kong – Pathways to Net Zero Carbon Emissions by 2050
Published by: World Resources Institute and Civic Exchange
Hong Kong is developing its own long-term decarbonisation strategy. The government kicked off a public engagement in June 2019 to collect public views; it is expected to announce the results later this year. It will subsequently formulate a long-term decarbonisation strategy.
This report analyses the feasibility of Hong Kong’s reaching a net zero emission target in 2050 and provide inputs for the formulation of Hong Kong’s long-term decarbonisation strategy. It highlights where action is needed through 2050 and provides context for landmark decisions that must be made under current policy plans until 2030. This project involved a detailed modelling exercise that perspectives.
The model evaluated the medium and long-term impacts on CO2 emissions in Hong Kong of key policies for the power, building and mobility sectors and devised additional policy recommendations to strengthen the pathway towards net zero emissions.
- New Report: Climate Change Impact on Sovereign Ratings: A Primer
Published by: Fitch Ratings
An Undoubted Risk, but Hard to Quantify Fitch Ratings aims to capture climate change in sovereign ratings, as it does for all factors that it believes are relevant and material for creditworthiness. However, the magnitude and timing of the impact on individual sovereigns is highly uncertain.
Some impact is already visible and reflected in ratings, but a comprehensive assessment of future risks would require further information, analysis or assumptions on issues including: future international policy actions on greenhouse gas (GHG) emissions and the effect of the resulting atmospheric stock of GHGs on global temperatures; the sovereign exposure to country-specific rises in temperature, drought, sea levels, extreme weather and natural disasters; the constraints on exploitation of fossil fuels; and the likely effectiveness of mitigation and adaption strategies. It would also require assessment of the impact of these climate and policy developments on variables that directly affect sovereign creditworthiness, such as GDP, public finances and political risk; as well as judgments on relevant time and rating horizons.
Climate Change Risk Factors for Sovereigns Physical risks include the potential impact of higher temperatures, drought, rising sea levels, change in land use and more extreme weather events and incidences of natural disasters. Transition risks include exposure to potentially ‘stranded assets’ (such as fossil fuel resources that may never be used) owing to changes in global policies, technology or consumer preferences.
- New Report: China Green Bond Market 2019 Research Report
Published by: Climate Bonds Initiative
The report analyses the key developments in the world’s largest source of labelled green bonds. Focusing on green bond issuance, policy development and wider market growth, available in English and Chinese, the report is the fourth in an annual series from Climate Bonds.
Climate Bonds Initiative completed this research report in collaboration with the China Central Depository Clearing Co. Ltd Research Centre (CCDC Research) and with the support of HSBC.
- New Research: Should COVID-19 bailouts include ESG performance metrics? An Australian case study
Published by: ISS ESG
The monetary value of government bailouts as a response to COVID-19 is unprecedented. Whilst governments historically have justified disaster-related bailouts to companies based on securing employment, there is now a growing focus on linking receipt of public funds to addressing wider ESG-related matters, such as tax transparency and quantifiable climate targets. This paper explores several of these initiatives using an Australian case study.
- New Working Paper: Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?
Published by: Smith School of Enterprise and the Environment, University of Oxford
The COVID-19 crisis is likely to have dramatic consequences for progress on climate change. Imminent fiscal recovery packages could entrench or partly displace the current fossil-fuel-intensive economic system. Here, we survey 231 central bank officials, finance ministry officials, and other economic experts from G20 countries on the relative performance of 25 major fiscal recovery archetypes across four dimensions: speed of implementation, economic multiplier, climate impact potential, and overall desirability.
We identify five policies with high potential on both economic multiplier and climate impact metrics: clean physical infrastructure, building efficiency retrofits, investment in education and training, natural capital investment, and clean R&D. In lower- and middle-income countries (LMICs) rural support spending is of particular value while clean R&D is less important. These recommendations are contextualised through analysis of the short-run impacts of COVID-19 on greenhouse gas curtailment and plausible medium-run shifts in the habits and behaviours of humans and institutions.
- New Working Paper: The Effect of Firm-level ESG Practices on Macroeconomic Performance
Published by: Oxford Sustainable Finance Programme, Smith School of Enterprise and the Environment, University of Oxford
This working paper investigates whether the development and adoption of firm-level environmental, social and governance (ESG) practices affects national macroeconomic performance, and whether this differs between developed countries and emerging economies. Using dynamic panel techniques – generalised method-of-moments (GMM) estimators – we find that an increase of micro-ESG performance can result in the improvement of living standards as measured by GDP per capita. When we test this link by country type, we find that firm-level social performance in a country is positively associated with GDP per capita in both developed countries and emerging economies.
As for the other two components of firm-level ESG measures, namely environmental and governance performance, we find that these affect macroeconomic performance in emerging economies, but that the effects remain insignificant in developed countries. While further research is needed, these results may be of particular interest to policymakers and central banks, as they suggest that encouraging the adoption of ESG practices at the firm-level could support macroeconomic performance.
- New Report: Building a Global ESG Disclosure Framework: a Path Forward
Published by: Institute of International Finance
The focus of this paper is on entity-level disclosures of ESG-relevant information by financial institutions. In this context, this paper also addresses non-financial reporting by other corporates, given the interlinkage between robust corporate ESG disclosure and financial institutions’ own ESG disclosures and risk management. We consider disclosures that are corporate in nature (e.g. to inform investment and financing decisions) and those that are more regulatory/supervisory in nature. Such disclosures are often also referred to as nonfinancial reporting.
This paper reviews the spectrum of existing ESG disclosure frameworks and standards, ranging from voluntary frameworks (which many firms are, or feel, obliged to complete due to their stakeholders’ expectations and requirements) to national and regional policy and regulatory requirements, which come in various forms and involve different compliance mechanisms.
Although climate-related disclosures have been a key issue in recent years, not least due to the impact of the TCFD (and general awareness of and focus on climate-related risks within financial policymaking and regulation), this paper focuses on ESG disclosures more broadly to identify where consistency and fragmentation issues may arise.
- New Report: Understanding Physical Climate Risks and Opportunities
Published by: IIGCC
As the severity of climate change grows, the urgency for investors to address physical risks in their portfolios becomes more acute. IIGCC has therefore produced guidance for investors which sets out how they can integrate the risks and opportunities presented by the physical impacts of climate change into their investment processes.
The report provides comprehensive and practically focused full guidance on the topic. This is then supplemented by a shorter form practical summary guidance of steps for investors to take, which complements the core guidance report.
The detailed guidance is intended as a useful tool for investors which brings together useful case studies, frameworks and resources for investors who are making a start on assessing physical risk. Critical considerations and questions are provided at each stage of a generalised climate risk assessment process, which enables investors to shape physical climate risk and opportunity analysis that is relevant to their individual context.
Also see the press release here for more info and context to the guidance.