3 days agoAs Net Zero financial institutions raise their ambitions, they shouldn’t lose the forest for the treesIn brief: Financial institutions that specialize or focus their climate-related efforts too narrowly can see much more rapid diminishing returns on their efforts compared to those with a more systemic perspective. As an institution drills down into high-emitting sectors, they need to use what data are available to still consider…Net Zero Finance7 min read
May 11Green bonds don’t make a bond fund ‘green’ESG bond funds’ sustainability levels can’t be measured by ‘green bond’ share. They require a more thorough comparison of the investors’ sustainability theory of change against the fund’s ESG policies & implementation investments. An analysis of the ESG bond market has found a surprisingly small proportion of assets were invested…Green Bond5 min read
May 8Implementation of the EU Taxonomy could weaken ESG incentives outside of EuropeThe complexity of the EU’s Sustainable Finance Disclosure Regulation will make taxonomy alignment a central focus for many end-investors, and this will affect how intermediaries invest The binary nature of the taxonomy will focus investor efforts on how to improve their taxonomy alignment at the margin, which could reduce the…Eu Taxonomy4 min read
Apr 26Sukuk issuers stand to benefit from increased fixed income investor engagement if they know how to respondESG engagement has become a key element of responsible investment for equity investors, but has developed much slower among fixed income investors Efforts to boost engagement by fixed income investors could affect where inflows of investors direct their funding in Islamic capital markets Sukuk issuers receptivity to fixed income investor…Sukuk4 min read
Apr 20Innovative analytical models & technology will do the heavy lifting before a net-zero standard for financial institutions is adoptedThe Science Based Targets initiative has released its widely anticipated ‘foundations’ paper for a Net Zero alignment standard for financial institutions SBTi outlined its Guiding Principles and a conceptual framework that will link together ongoing efforts to tackle the thorny issue of what should qualify as ‘net-zero aligned’ Net-zero ambitions…Climate Change5 min read
Apr 18Asset owners need to optimize and bolster their approach to investee engagementNet zero-related engagement is important for moving investees in the direction of long-term targets, but carries a risk if policies don’t keep up RFI’s research indicates that for ESG as a whole there may be a ‘margin of safety’ when screening engagement targets through Shariah screens, and more research is…Climate Change5 min read
Apr 7A step forward on sustainability- and climate-related disclosure standardsThe ISSB has released draft sustainability- and climate-related disclosure guidelines that will provide a global ‘baseline’ for future requirements Industry-specific requirements largely follow SASB, although the financial sector has seen expectations rise for its financed and facilitated emissions reporting, which is reflected in the draft standard going beyond the SASB…Responsible Finance5 min read
Mar 31Asian banks need to improve how they track & disclose financed emissions risksInvestor coalition Asia Transition Platform evaluated Asian banks on their climate governance, risk management and policies The report found significant gaps compared to TCFD recommendations and national decarbonization commitments Report conclusions are in harmony with RFI Foundation research about the importance of financed emissions risks within Islamic markets, some of…Asia4 min read
Mar 27Financial institutions and their investors are flying blind into the climate transitionThe European Central Bank’s supervisory assessment of metrics and disclosures on climate risk at European banks found significant gaps throughout the banking system Banks have been developing their capacity to analyze climate risk, but have lagged regulatory expectations based on the pace at which climate-related risks are growing Other trade…Climate Change5 min read
Mar 17Deconstructing ESG scores may unlock value, and may impact Shari’ah compliant investments differentlyA working paper from the BIS finds value in separating E, S and G compared with an aggregate ESG score for investors trying to minimize performance deviation from a benchmark Separating ESG into E, S and G allows investors increase their investments’ relevant ESG score without incurring a financial cost…Responsible Investment4 min read
