February – a month of rising ocean temperatures, transition finance and artificial intelligence

Transition Finance in the Debt Capital Market publication by ICMA puts into perspective the topic of transition finance. The report introduces key principles and focuses on explaining concepts such as economy-wide transition, climate transition, hard-to-abate transition. It also includes an overview of bonds and transition plans.

IIGCC published a paper From asset to portfolio alignment: Assessing climate target alignment with cumulative benchmark divergence focusing on Cumulative Benchmark Divergence, taking a deeper dive into metrics and portfolio alignment, while also presenting a selection of useful data.

February on course to break unprecedented number of heat records shared by The Guardian reports on alarmingly rising ocean temperatures, provides expert opinions and outlines further trends for 2024.

China’s role in accelerating the global energy transition through green supply chains and trade, published by LSE and Grantham Research Institute on Climate Change and the Environment, discusses China’s success in green manufacturing and clean energy technologies, as well as its links with the ASEAN region

Climate Policy Initiative has published a report Landscape of Guarantees for Climate Finance in EMDEs, which explores the important role of cross-border guarantees as a mobilisation tool, analyses the instruments and delves deeper into the gaps in the guarantee landscape.

AFME (Association for Financial Markets in Europe) published its "ESG Finance Report Q2 2023", which also includes a useful regulatory update.

Main takeaways - a decline in ESG bond and loan issuance in 2023:

• ESG bond and loan issuance fell by 13.5% when compared to 2022. The decline was most predominantly observed towards the end of the year with Q3 and Q4 falling by 42% and 16% YoY respectively.
• The annual decline was partially offset by a 9.7% annual increase in European green bond issuance.
• French issuers led in 2023 by total ESG bond and loan issuance, followed by German and Italian issuers.

TNFD published draft section guidelines - Biotechnology and pharmaceuticals that focus on the application of the LEAP approach in the biotechnology and pharmaceuticals sector and provide key recommendations.

TNFD has also published Discussion paper on conducting advanced scenario analysis that provides an overview of the three phases of scenario development, highlights implementation options, and provides recommendations

UKSIF has published its first policy research paper for the UK 2024 elections. The paper shows that the UK's Energy sector now faces a critical investment gap in its decarbonisation journey. The full report is available online, and @UKSIF CEO James Alexander has a useful LinkedIn post explaining the paper.

News

Responsible Investor - How taxonomies can boost the sustainable finance market.

Green Central Banking - What would a green dual interest rate environment look like?

Financial times - JP Morgan and State Street quit climate group as BlackRock scales back (the latest Climate Action 100+ developments & reasons for those)

ESG News - Tim Mohin: The Dragon Roars – China’s New Sustainability Disclosure Mandate (reporting on the need to provide a range of sustainability information for large companies listed on the Shanghai, Shenzhen, and Beijing Stock Exchanges in 2026).

Romania-Insider - Raiffeisen Bank Romania: 2023, the year of financial planning and sustainable lending

TechEU - London startup Climate Policy Radar raises $6.8M to leverage AI in climate policy tracking

Recommended readings

PNAS published The planetary commons: A new paradigm for safeguarding Earth-regulating systems in the Anthropocene and further explores the idea that critical biophysical systems that regulate the Earth system should be recognised as “planetary commons”

EU’s plan for critical technologies ends up as a shadow of the promised sovereignty fund shared by Science Business on the latest news from the European Commissions and their decisions on boosting investment in strategic technologies

S&P Forecasts $1 Trillion Sustainable Bond Issuance in 2024 by ESG Today reports on future development, focusing primarily on the strong growth of GSSSB in previous years and projected 2024, while also highlighting the dominant role of green bonds

European Central Bank shared blog post Added Scope: Eurosystem accepts a fifth rating agency informing about new developments in the field of credit rating agencies while highlighting the important role of  Scope Ratings

Imperial College Business School published a report Net Zero Finance Report Card: Recognizing Ambition “Who’s Walking the Net Zero Path?” focusing on banks, investors and insurers in the context of Article 2.1. c of the Paris Agreement. They also explain carbon budget, net zero finance principles and look in detail at individual financial institutions.

IFRS published The Jurisdictional journey towards globally comparable information for capital markets, which focuses on the adoption of ISSB standards, presents project plan and discusses future developments

EBA released draft guidelines on the management of ESG risks, consultation paper invites comments on proposals, provides overview of the impact of ESG risks, transition plans and reporting requirements.

Online community insights

LinkedIn Post: Michal Majerczak shared some interesting findings from Actaware research, which includes topics such as CSRD and ESG.

Alessandro Blasi posted about Chinese investment in critical minerals in Africa.

LinkedIn Post: CONFESS reports on the newly launched Public Consultation on Sustainability Reporting Standards for SMEs by EFRAG .

LinkedIn Post: Phillip B. shared an outline chart containing the key steps in the CSRD/ESRS reporting process

LinkedIn Post: Richard Gardiner spoke about CSDDD, mentioned Germany and Italy, voting in the European Parliament and pointed out the aspect of time

LinkedIn Post: Sebastian Manhart reports on the EU Agreement on Carbon Removal Certification Framework, highlighting ongoing progress and also links to his blog on this particular topic

LinkedIn Post: Sustainable Finance Institute Asia launched version 2 of ASEAN Taxonomy, which is being updated based on feedback and is due to be effective from 19 February 2024.

LinkedIn Post: Nadia Humphreys informs about ESG AUM projections and outlook by Adeline Diab and Rahul M. , mentioning ESG market and assets while providing context on the ESG market in Europe.

LinkedIn Post: Global Reporting Initiative (GRI) shared a survey about reporting experience under the new European Sustainability Reporting Standards (ESRS)

LinkedIn post: Simon Mundy shared a post on the Amazonian ecosystem and European high finance with links to his analysis and the full report by Nimra Shahid and Robert Soutar 

LinkedIn post: ESG Book shared a post about the new Sustainable Revenues solution providing key insights on a number of global companies on the topic of decarbonisation and net zero

LinkedIn post: WBCSD launched a guide for companies to help them enhance their assessment and disclosure of climate-related financial impacts

LinkedIn post: Assaad Razzouk shared a link to the Climate Change Performance Index 2024 and highlighted the top 5 best + 5 bottom  and other notables countries in his post

LinkedIn post: Toma Pavlov shared key findings from the mid-term evaluation of the Recovery and Resilience Facility and linked important resources

LinkedIn post: Ulf G. Erlandsson shared key thoughts and paper titled  “Transition power, a JGB SLB, prints in USD“ discussing recent price action and bonds

LinkedIn post: Eurosif announces the publication of a new methodology with a strong focus on ESG investments, reflecting the evolving nature of the market, while proposing several categories of sustainability-related investments

LinkedIn post: Faculty of Electrical Engineering, Czech Technical University in Prague shared an overview of prominent figures in the field of sustainability

LinkedIn post: Eurosif informs about EFRAG series of educational videos focusing on the exposure drafts.

LinkedIn post: TNFD informs of the deadline for submitting feedback (24 March 2024) on the published draft sector guidance.

Events

Online: On 27 February, Environmental Finance and IFC - International Finance Corporation will host a webinar on “Encouraging Green Bond Issuances in Turkey“.

Online: On 6 March, SUERF and BAFFI Bocconi will host an e-lecture "Towards macro-prudential frameworks for managing climate risk“, focusing on the threats that climate change poses to financial stability, featuring three speakers.

In person: On 12 March, Národná banka Slovenska will host a special event on the transition to Net Zero, bringing to Bratislava some of the senior leadership in Sustainable Finance. More information, agenda, and registrations are on the event website.

In person & online: Between 20 and 22 March, WindEurope will host its annual conference in Bilbao, Spain. The event will see interventions by Maroš Šefčovič , Philipp Nimmermann , Duarte Bello , Jochen Eickholt , Malgosia Bartosik and Giles Dickson and many others. Full event agenda on the event website.

Online: On 26 March, British Chamber of Commerce in the Czech Republic organise a panel discussion titled „Exploring the Future of Build-to-Rent Property“ focusing on trends, challenges and many more in real estate.

Brussels: On 9 April, Recovery & Resilience Facility and European Strategic Investments event organised by the European Commission and the Belgian Presidency of the Council of the European Union will focus on the results of the RRF and will also offer an interesting discussion.

Online: On 10 April, Accountancy Europe is hosting a webinar on  „How can company boards lead the sustainability transition?“  which will  focus on ESRS, CSRD, CS3D and offer a discussion under the topic of ESG, its challenges, objectives and implementation.

In person: Between 27 and 29 May, International Sustainable Finance Centre (ISFC) will host the annual CEE Sustainable Finance Summit - with first speakers to be announced next week. The new Summit website will go live next week, and a special award will be launched in March!

In person: On 14 and 15 October, RICS will host its annual World Built Environment Conference in Bilbao, including sessions at the Guggenheim museum.

Podcasts

Centre for Climate Finance & Investment shared a new podcast episode on The net-zero finance scorecard project