Category: News

In joining FC4S – a collective of international financial centres working together to achieve the UN’s Sustainable Development Goals (SDGs) and the Paris Agreement – Jersey becomes the 39th member, outlining its shared commitment to the deployment of private capital towards sustainable objectives.

Jersey has been a major centre for international financial services for 60 years, spanning wealth management, funds, capital markets and banking, and more recently the specialist areas of Islamic finance, fintech and philanthropy. The Island acts as an important cog in the global financial system, with 14,000 local highly skilled professionals helping to manage and administer more than £1.3 trillion of global assets.

Seeking to catalyse action within the finance industry in support of sustainable finance, in March 2021, Jersey Finance – the not-for-profit organisation responsible for representing and promoting Jersey’s financial services industry – launched a new dedicated initiative to reinforce Jersey’s credentials as a sustainable international financial centre. ‘Jersey for Good – A Sustainable Future’ outlines a long-term strategy and collective vision for the Island, as well as an initial two-year plan to accelerate Jersey’s journey towards a sustainable future.

Based on the work of Equilibrium Futures, headed up by Andrew Mitchell – a founding member of the Taskforce for Nature Related Financial Disclosures (TNFD) and a recognised expert in the field of sustainable finance – the strategy is a collaborative effort between members of Jersey’s finance industry, the Government of Jersey, and the Island’s regulator, the Jersey Financial Services Commission (JFSC).

Being admitted as a member of the FC4S network required Jersey Finance to participate in the FC4S Assessment Programme, that enables its members to evaluate how their institutional foundations, regulatory environment and market infrastructures align with a sustainable financial system, This provides them with a baseline of where they stand in terms of sustainability, helps them identify areas where more focus is required, and allows them to visualize mid-term goals and set priorities when developing a strategic approach to sustainable finance. It also enables financial centres to keep track of their progress on this agenda.

Commenting on Jersey’s admission to FC4S, Joe Moynihan, Chief Executive of Jersey Finance, said:

“We recognise that Jersey has a responsibility to leverage its expertise and capital to support the transition to an environmentally and socially sustainable global economy. As a dynamic, focussed IFC committed to good global citizenship, we have the power and the obligation to accelerate this journey and help create a brighter and sustainable future for all.

“Joining FC4S is an important step for Jersey. As well as being the leading network for sharing best practice among sustainable finance centres, the assessment framework developed by FC4S and its partners provides us with better visibility over our sustainable finance ecosystem and a benchmark to measure our progress in achieving our 2030 vision – for Jersey to be recognised by its clients, stakeholders and other key partners as the leading sustainable finance centre in the markets it serves. We look forward to the opportunities for cooperation and partnerships that membership of the FC4S network offers.”

Jersey’s addition to the FC4S network is the latest in a series of new collaborations with international bodies to support the scaling up of sustainable finance. At COP26, the JFSC was announced as the latest member of the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) – a global grouping of regulators and central banks that fosters climate action. This follows the introduction of new fund disclosure requirements to counter the risk of greenwashing, announced by Jersey’s regulator earlier this year. There is also further alignment with the Government of Jersey’s wider efforts to implement ambitious sustainable policies to address the climate emergency, as recognised at COP26 with the UK Government announcing its intention to extend the UK’s commitments under the Paris Agreement to Jersey and the other Crown Dependencies.

“FC4S is pleased to welcome Jersey Finance as a new member. Jersey has demonstrated a real commitment to a greener future by presenting alternatives to current practice, detailing a new vision and strategy to change, and evidencing that sustainable finance is key for both planet and people. With our network of international financial centres, Jersey will now have access to a suite of knowledge and data that outlines what’s worked and what hasn’t in jurisdictions from Rio de Janeiro to Nur-Sultan. Thus, giving it insight to best practices around the world.”, said Stephen Nolan, Managing Director of FC4S.

The APFF Sustainable Finance Development Network (SFDN) is a permanent landing platform for private-public sector collaboration to support the development of sustainable Finance in APEC Economies. Its focus is to ensure that key policy principles are considered, such as consistency and interoperability among jurisdictions, to minimize fragmentation, and to ensure APEC Economies’ concerns and interests are taken into account in global policymaking and framework development.

The SFDN is a network within the Asia-Pacific Financial Forum (APFF), a policy initiative of the APEC Finance Ministers, who entrusted its oversight to the APEC Business Advisory Council.

The ​UNDP Financial Centers for Sustainability (FC4S) Network, a collective of international financial centers that work to expand sustainable finance and help achieve the Sustainable Development Goals and the Paris Agreement, acts as the Secretariat of SFDN.

In 2020, the APEC Business Advisory Council (ABAC) proposed to APEC’s Finance Ministers the establishment of a platform for private-public sector collaboration to help accelerate the convergence of sustainable finance policies among APEC’s 21 member economies, while strengthening the region’s voice in the development of common global sustainability frameworks. That year, at their annual dialogue, APEC’s Finance Ministers welcomed ABAC’s proposal to establish the Sustainable Finance Development Network (SFDN) within the Asia-Pacific Financial Forum (APFF).

The SFDN’s focus is to address the major challenge facing the region today, which is the fragmented Sustainable Finance landscape and the lack of applicable and practical common standards that can guide lenders and investors in incentivizing companies and organizations, especially in Developing Economies and SMEs, to progressively transition to net-zero and align their practices with sustainable development goals.

The network acts as a Forum of Experts and it has been developed to support and align existing initiatives and stakeholders by means of the development of a consensus on a common work framework that looks at Sustainable Finance from a holistic and pragmatic perspective and categorizes the required action items into a series of building blocks and focus areas. The network is also meant to develop and encourage strong and efficient capacity-building governance structures, and to promote alignment and coordination of efforts for effective skills and knowledge development.

FC4S, in collaboration with the University of Zurich, is developing a groundbreaking analysis of the media coverage of 289 international sustainable finance initiatives in +550 articles from financial and business news media in 2020.

For the first time, this report will bring insights to the most covered aspects of this agenda internationally. FC4S will leverage the technical evidence to provide robust knowledge inputs to international organizations and forums in the future. 

The mapping and classification of initiatives will allow extracting information regarding current market priorities, as well as lagging topics and persistent barriers to mainstreaming sustainable finance globally. 

This preliminary descriptive analysis shows that: 

• 84% of the articles had a neutral tone, and the majority were regular news reports (80%), followed by commentary/opinion pieces (12%).
• In the sampled articles mentioning sustainable finance initiatives, climate-risk management frameworks, and climate pledges led the appearances in the news outlets in 2020.
• The most frequent topic among the sampled articles was “Sustainable Investment Products and Strategies” (with “Bonds, Loans and Credit-Financing” as the main sub-topic in about a third of the cases), followed by “Disclosure and Reporting” – and by a clear margin on third place “Capacity building”
• Regarding the depth of the news coverage on sustainable finance initiatives, two-thirds (63%) of the articles did not mention any goals of the initiatives, and only 13% covered their achievements. 

Future econometric analysis will be conducted to discover which features of sustainable finance initiatives are more efficient at making them more visible and attracting new partners, helping to accelerate the transformation of the financial system.

Discover more and download the deck. 

 

 

UN-convened Financial Centres for Sustainability (FC4S) was invited to attend the Asia-Pacific Financial Forum (APFF) 2021 China Conference, a high-level hybrid event held on October 14-15. 

The Asia-Pacific Financial Forum (APFF) is a platform for public-private collaboration to accelerate the development of robust and integrated financial markets in the APEC region. It responds to the need for active collaboration among policymakers, regulators and experts from industry and international and academic organizations to address key issues.

The Conference, co-organized by APFF, the China Chamber of International Commerce, the Chinese Academy of Fiscal Sciences and the Society of Public Finance of China, gathered senior representatives of major government, business, and academic institutions to discuss key issues to support the implementation of APEC Finance Ministers’ initiatives across APEC economies, and how collaboration can be strengthened to advance these efforts in the coming years. 

The theme of this year’s APFF was Collaboration Towards Inclusive and Innovative Financial Markets. Speeches and plenary sessions featured topics such as Carbon Neutrality, Green Finance, Digitalization of Finance, SME financing and inclusive Fintech, Credit Information System and Data Security. 

FC4S organized a panel discussion on Developing Robust Carbon Markets, where five experts from China, Mexico, and the US, moderated by our colleague Prajwal Baral, shared their views and work on carbon pricing instruments and market development, focusing on the role of MRV (Monitoring, Reporting, Verification) in ETS building. 

Some key takeaways from this high-level two-day conference:

• Green Finance: a comprehensive market infrastructure, efficient financial intermediaries and a wide spectrum of financial products are essential to develop green finance in APEC economies, as pointed out by Mr. Hiroshi Nakaso, APFF Chairman and former Deputy Governor of Japan central bank. Mr Nakaso highlighted the significance of transition finance, the crucial roles of banks, and the flexibility of standards to allow better adaption in different economies. 
• Carbon Market Development: Experts recognised that different economic development stages might shape how to develop carbon pricing mechanisms, instruments, and infrastructure, but also recommended that setting up clear targets and ensuring transparency of price mechanism of Carbon Exchanges is beneficial. On the closed-door panel discussion supported by FC4S, sectoral specialists highlighted the role of MRV (Monitoring, Reporting, Verification) in ETS building. 
• Macro-economy and green recovery from COVID19: Economists from Japan and China agreed on the importance of stimulating domestic demand and focusing on the supply-side economy. Yang Weimin, Deputy Director of Economic Committee of CPPCC National Committee, suggested that adjusting the national income distribution, especially levelling up the household consumption in the distribution, could be the main boost for sustainable economic growth. 

 

The COP26 offers a space for dialogue where cities, governments, civil society, and companies propose a transformation agenda to make the Paris Agreement operational and concretely demonstrate their collective commitment to mitigate emissions and build resilience throughout the planet. 

Preparing for a successful COP26 requires the participation of Financial Centres, which are natural nodes to pilot the transition towards a sustainable financial system, due to the clustering of financial activities and finance professional services and institutions, as well as their convening power among public and private market actors. 

For this reason, and within the framework of the Climate Finance Week Ireland, UN-convened Financial Centres for Sustainability (FC4S) organized a public webinar in association with the World Alliance of International Financial Centers (WAIFC) on: “Financial Centres on the road to COP26“.

The event focused on the Sustainable Finance Agenda within Financial Centres, their advances on aligning their portfolios with the zero-carbon transition, and the Paris Alignment, to precede and enrich the COP26 discussions.

On this occasion, Emmanuel Etaderhi, Senior Vice President at FMDQ Group and Executive Secretary, Financial Centre for Sustainability, Lagos; Jennifer Reynolds, President & CEO at Toronto Finance International and Co-Chair of UN-convened Financial Centres for Sustainability (FC4S); Jochen Biedermann, Managing Director at the World Alliance of International Financial Centers (WAIFC) and Founder & CEO Blockchain (Asia) Ltd; Stephen Nolan, Managing Director, UN-convened Financial Centres for Sustainability (FC4S) & Head of Secretariat Sustainable Insurance Forum (SIF); Zahra Abdel, Deputy Managing Director of Stuttgart Financial; and Zalina Shamsudin FCCA, General Manager for Capital Markets Malaysia (CMM); shared best practices to encourage innovative financial mechanisms to facilitate the transition to a sustainable economy. 

Thank you to everyone who participated! In this link you can watch the recording. 

 

 

This week we concluded the series of webinars on “Methodologies and tools for Paris Alignment”. 

The webinars have been a success. In FC4S, we are convinced that targeted financial sector representatives must constantly update their training and keep informed of the avant-garde tools to work towards the Paris Agreement, and zero-carbon transition.

Therefore, we want to thank everyone who attended; and the exhibitors of each meeting. It was truly an honor to have your attendance and the possibility to exchange best practices with you.

The organization of this series emerged from the development of a paper in collaboration with the Coalition of Finance Ministers for Climate Action, named “Paris Alignment for Private Financial Institutions: Commitments and Methodologies”.  You can read the key findings here. 

This research showed that sustainable finance initiatives have quintupled in the last decade, and climate change is still their main focus of attention. Groups of financial institutions have likewise collectively stepped up worldwide to advance on aligning their portfolios with the zero-carbon transition.

As yet, they have increasingly been working towards Paris alignment through commitments and pledges, mostly through internationally convened networks. Although commitments on Paris alignment are a fundamental step towards decarbonizing portfolios and balance sheets, the operationalization of commitments remains challenging.

If you were unable to attend, we invite you to relive the webinars:

 

1st Workshop – Introduction &  PCAF overview (Presentation)

 

– September 22^nd at 17h CET (West time) 

– September 23^rd 10h CET (East time)

 

2nd Workshop – PACTA overview (Presentation)

 

– September 29^th at 17h CET (West time) 

– September 30^th at 10h CET (East time) 

 

3rd Workshop – SBTi overview (Presentation)

 

– October 4^th at 17h CET (West time)

– October 7^th at 10h CET (East time)

 

Recognizing that issues related to sustainability are underpinning to better risk management practices in financial institutions, the Financial Centres for Sustainability (FC4S) Network launched the Sustainable Finance Market Update. In the run-up to COP26, 1st – 12th November, the aim of this series is to provide a review of the main market developments to mobilize green and sustainable finance and bring examples of supporting national and international guidance and regulations.

This series of decks reviews the main market developments to mobilize green and sustainable finance and brings examples of supporting national and international guidance and regulations.

Market Infrastructure

The first edition consists of a review of the existing Market Infrastructure supporting sustainable finance activities, including the frameworks and market trends in disclosure and reporting, ESG service providers, challenges and opportunities of data quality, and relevant taxonomies. It also provides an overview of 20 tools that quantify and measure different aspects of companies’ ESG impact.

• English
• Spanish
• Chinese

Institutional Investors

The second edition is about Institutional Investors and how these are actively contributing to the greening of financial markets.  Institutional investors have the incentives to address and mitigate long-term climate-related risks, particularly pension funds and other long-term-focused investors who cannot easily diversify out of global risks such as climate change and thus have an inherent incentive to address them.

• English
• Spanish
• Chinese

Banking

The third edition is about how the banking industry is integrating ESG factors into its strategies, increasingly implementing risk management frameworks, and mobilizing capital to meet global sustainability goals.

• English
• Spanish

Capital Markets

The fourth edition is about Capital Markets and how financial materiality of environmental and climate risks is prompting several stock exchanges to require disclosure of ESG information. The number of ESG ETFs and the volume of ESG AuM worldwide have been growing fast. Despite its growth, ESG ETFS share of total ETF markets is still small and concentrated in developed countries.

• English
• Spanish

Insurance Providers 

The fifth edition is about how the insurance sector has integrated ESG factors into its reporting, increasingly implemented risk management frameworks, and mobilized capital to meet global sustainability goals.

• English
• Spanish

This week we conducted the second session of the series “Methodologies and tools for Paris Alignment”. In this occasion, Nicholas Dodd, Nayra Herrera, George Harris, Lars Eric Mangset and Irene Ben Rejelo walked us through Paris Agreement Capital  Transition Assessment (PACTA).  

The organization of this series emerged from the development of a paper in collaboration with the Coalition of Finance Ministers for Climate Action, named “Paris Alignment for Private Financial Institutions: Commitments and Methodologies”.  You can read the key findings here. 

This research showed that sustainable finance initiatives have quintupled in the last decade, and climate change is still their main focus of attention. Groups of financial institutions have likewise collectively stepped up worldwide to advance on aligning their portfolios with the zero-carbon transition.

Yet, they have increasingly been working towards Paris alignment through commitments and pledges, mostly through internationally convened networks. Although commitments on Paris alignment are a fundamental step towards decarbonizing portfolios and balance sheets, the operationalization of commitments remains challenging.

In this session, we focused on PACTA methodology, which has been developed by the 2 Degrees Investing Initiative in conjunction with a wide range of partners. It is an open-source and free online tool that assesses the alignment of your corporate bond, loans, and listed equities exposure to eight economic sectors, covering roughly 75% of GHG emissions. 

The tool compares what needs to happen in sectoral climate transition pathways with financial actors’ exposures to companies in these sectors and their 5-year forward-looking production plans, allowing for a dynamic, scenario-based, and forward-looking approach. Furthermore, this methodology is extended by a stress-testing module that assesses the influence on assets’ prices of various climate scenarios. 

In addition, PACTA has also established itself as a model for financial supervisors and central banks to run scenario analysis and climate stress tests.

Until now, the webinars have been a success. In FC4S, we are convinced that financial sector representatives including banks, investment firms and asset managers, capital market actors (both public and private), as well as representatives from the insurance industry, must constantly train and be informed of the avant-garde tools to work towards the Paris Agreement; and zero-carbon transition.

Thank you to everyone who participated live. In this link you can watch the recording. If you were unable to attend, we hope to see you at the next webinar.

Future dates: 

SBTI: October 4th at 17h CET, and October 7th at 10h CET.

This week we conducted the first sessions of the webinars series focused on “Methodologies and tools for Paris Alignment”. On this occasion, Giel Linthorst, Executive Director of the Partnership for Carbon Accounting Financials (PCAF) walked us through the showcase of the Secretariat.  

The organization of this series emerged from the development of a paper in collaboration with the Coalition of Finance Ministers for Climate Action, named “Paris Alignment for Private Financial Institutions: Commitments and Methodologies”.  You can read the key findings here. 

This research showed that sustainable finance initiatives have quintupled in the last decade, and climate change is still their main focus of attention. Groups of financial institutions have likewise collectively stepped up worldwide to advance on aligning their portfolios with the zero-carbon transition.

Yet, they have increasingly been working towards Paris alignment through commitments and pledges, mostly through internationally convened networks. Although commitments on Paris alignment are a fundamental step towards decarbonizing portfolios and balance sheets, the operationalization of commitments remains challenging.

In this session, we revised the Strategic Framework for Paris Alignment and focused on the PCAF methodology, to better understand the role it plays in this overarching process and the importance of the tool in the financial sector. PCAF incorporates 156 financial institutions that represent over 50 trillion USD in total assets.  

Thank you to everyone who participated live. In this link, you can watch the recording. If you were unable to attend, we hope to see you at the next webinars.

Future dates: 

• PACTA: September 29th at 17h CET, and September 30th at 10h CET. 

• SBTI: October 4th at 17h CET, and October 7th at 10h CET.