David O'Bamber

The latest developments in sustainable finance: SEC sets date for climate proposal, UK Government to introduce more legislation for pension schemes, Eurosif urges portfolio clarifications.

The latest developments in sustainable finance: MSCI downgrades Russia and Belarus ESG rating, CalPERS and CalSTRS face Russia divestment legislation

The common ground paper focuses on the assessment and disclosure of negative impacts, avoided negative impacts and positive impacts on biodiversity resulting from the investments of financial institutions as a way to contribute to the conservation and sustainable use of biodiversity. The aim of the paper is to define harmonized principles underlying biodiversity impact assessment approaches/methodologies. These harmonised principles can be used by financial institutions interested in assessing the impact of investments on biodiversity. Although the focus is very much on quantifying this impact, the principles are also relevant for a qualitative analysis of biodiversity impact (e.g. to understand what should be included in the analysis and how impacts can be defined). This principles could also support financial institutions with the formulation of strategies and the setting of goals

The loss of biodiversity has an impact on the economy. Firstly, the loss of biodiversity threatens the health of ecosystems that provide services to the economy, such as animal pollination of food crops, natural water treatment and fertile soil. The Global Assessment of the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES), published in 2019, shows that a large proportion of original biodiversity has been lost in many places worldwide. For example, deforestation not only causes nature to deteriorate, it can also cause erosion of fertile soil, rendering agricultural land unusable in the long term. Second, the loss of biodiversity and healthy ecosystems contributes to accelerating climate change. Deforestation is responsible for just over 10% of global greenhouse gas emissions. Biodiversity loss is therefore considered to be one of the greatest risks to society and the economy.

Climate stability and biodiversity are ultimately two sides of the same coin. President Macron and President Xi emphasized this in their "Beijing Call" in autumn 2019, highlighting the crucial role of private and public financial flows to combat climate change and halt biodiversity loss.

Alexandra Pinzon, Nick Robins and Gabriel Thoumi explore how investors in sovereign bonds can take action to confront the risks of deforestation.

Current and future generations can continue to benefit from the Earth’s terrestrial and marine species and natural resources only if this biodiversity is protected. The cost of environmental protection—traditionally borne by governments and nongovernment organisations—is high. Yet the cost of not protecting our biodiversity is far greater in that we risk losing the means to sustain life. The conservation of our natural environment and the achievement of sustainable ecosystems will require greater private sector involvement, a rapid upscaling of sustainable businesses and green infrastructure, and new financial arrangements.

The EU Blue Economy Report seeks to continuously improve the measuring and monitoring of the socio economic impact of the Blue Economy, without disregarding the environmental implications. As the European Union embarks on the new European Green Deal1, the need to ensure that all angles are being considered becomes more and more evident so economic growth and employment go hand in hand with protecting and restoring nature and fighting climate change.. The Report should be seen as a tool to support relevant initiatives and policies under the new European Green Deal, which aims at implementing the United Nation’s 2030 Agenda by putting “sustainability and the well-being of citizens at the centre of economic policy and the sustainable development at the heart of the EU’s policymaking and action”

The oceans cannot sustain the ongoing imbalance driven by declining wild fish stocks and rising demand. A period of restraint is needed to allow ecosystems to replenish. We outline a proposal to facilitate this with the creation of a blue bond. This would compensate the industry for its temporary loss in cashflow and provide a return for investors when fish stocks recover.

This discussion paper seeks to advance the concept of transition finance as a channel for systemic decarbonization of the global economy.  We offer an updated definition of transition finance, review estimates of investment flows directed towards low-carbon activities, and highlight metrics that could be adopted by banks, asset managers, and other financial institutions to ensure integrity.  Transition finance has the potential to facilitate real changes in the global economy but needs a set of mandatory standards that underpin tangible contributions towards a future energy system. As capital providers examine their options for accelerating progress on climate change mitigation, we highlight the crucial role of transparent criteria in managing continued funding to fossil-fuel producers and energy-intensive firms.