Australasian Centre for Corporate Responsibility (ACCR) ’s Post

As we celebrate World Earth Day today, it reminds us that obtaining comprehensive, reliable, and comparable climate-related data is challenging for investors striving to understand and assess the investment risks and opportunities posed by climate change. That’s according to a new report from CFA Institute, entitled ‘Climate Data in the Investment Process: Challenges, Resources, and Considerations’. #WorldEarthDay 🌍 #ClimateChange

Climate change is reshaping our world, and investors are increasingly aware of the challenges it poses to our industry. While there are risks in climate investing, it also presents significant opportunities. Our recent report, Climate Data in the Investment Process: Challenges, Resources, and Considerations, can help unpack the future of this landscape. One of the subjects this CFA Institute report focuses on is an increasingly imperative one: How will the regulatory landscape shape climate data transparency, reliability, and comparability? In this report, we discuss notable new regulations and what they mean for investors. The report touches multiple other relevant areas as well, and can help inform your approach to investment as climate concerns continue to emerge. Learn more and read the full report here: https://bit.ly/3VVpO43 Research and Policy Center #ESG #ClimateChange #ClimateInvesting

Efforts are currently concentrated on exploring financial avenues in third-world countries to mitigate the impacts of climate change and preserve the balance of nature. This endeavor, known as climate financing, seeks to secure the necessary funds to address the effects of climate change. International institutions such as the International Monetary Fund (IMF) and the World Bank are aligning their monetary policies with investments in areas affected by climate change. To evaluate funding proposals, these lending institutions employ climate policy assessment tools, ensuring that every allocated penny is directed towards activities aimed at improving the environment. Similarly, various multi-development banks have incorporated the principles of the Paris Agreement into their lending policies. In today's world, where climate change plays a central role in every aspect of development, including trade and Foreign Direct Investment (FDI), a strong emphasis is placed on environmental conservation. Practices such as greenwashing are actively discouraged at all levels to maintain a genuine commitment to minimizing the impacts of climate change. However, challenges persist, such as the emerging issue of double counting in carbon trading, which undermines efforts to control global warming. The procedures for engaging in climate-related activities, including climate financing, carbon trading, third-party validation of carbon credits, technology transfer, and capacity building, are perceived as overly complex. This complexity acts as a barrier for new entrants, hindering their participation in climate initiatives. The intricate nature of these procedures evokes echoes of historical colonialism, reflecting a form of new-colonialism and new-liberalism in the modern world. The need for a simplified approach is crucial to attract more participants to employ mitigation and adaptation tools for climate change. The existing complexities not only deter new entrants but also result in missing links within climate change efforts, posing a threat to human life. Creating an enabling environment becomes imperative in the context of evolving geopolitics, as it directly influences the flow of funds from international financial institutions, a key factor in addressing climate change at both national and local levels.

🚧 It’s a dam stymying the flow of adaptation finance: while investors want to bankroll climate-proofing projects, they don’t know what “counts” as an adaptation and resilience (A&R) investment, and are wary of putting capital on the line without assurances that it’ll be put to good use. 💡 One solution? Have an expert group define an A&R classification system, one rooted in science but also easy to use for climate naïfs in the financial sector. 🌍 The Climate Bonds Initiative (CBI) is working to make this vision a reality through its Resilience Taxonomy Advisory Group (RTAG), which formally launched this month. Read all about it in today's edition of Climate Proof! Thanks to Emilie Mazzacurati, Ujala Qadir, Craig Davies, Paul Smith, Chad Park, Eugene Karl Montoya Alessandri, CECREF and Morgan Richmond for sharing their comments. https://lnkd.in/ej6v3Nta #climateadaptation #climateresilience #resiliencebonds #climatebonds #sustainability #ESG

Good description of potential economic elements of the "disorderly transition" scenario of climate change that may be brought on through delayed action and investment. “The frequency and intensity of climate catastrophes increasingly places the cost of adaptation on a multitude of stakeholders. The question really is, who pays the cost of climate adaptation.” Citi Sees ‘Significant Opportunities’ in Climate-Adaptation Finance. "Citigroup Inc. says a failure to cut greenhouse gas emissions at the pace needed to limit climate change means more capital is required to protect homes, cities and infrastructure from extreme weather events." “A slowing or stagnant advancement in climate-change mitigation increases the pressure to adapt to a changing climate,” Georgina Smartt, a director of environmental, social and governance research at Citigroup, and a team of analysts wrote in a report published Tuesday. That “creates significant opportunities,” particularly in the emerging markets, they said. Unlike mitigation, which is about reducing the pace of global warming by cutting emissions, adaptation is about coping with a hotter planet that’s more prone to floods, drought and other climatic extremes. It’s an area that’s attracting growing attention as the prospect of limiting global warming to the critical threshold of 1.5C looks increasingly remote. Today, adaptation attracts less than 10% of climate finance, and there’s an annual funding gap of about $360 billion, the United Nations Environment Programme estimates. Adaptation solutions that lack funding include water-efficiency technologies, climate-resilient crops and cooling systems, as well as financial instruments such as weather derivatives, according to the Citigroup analysts. https://lnkd.in/guwCdrsH

Hear from CFA Cleveland's own Deborah Kidd Market Integrity Insights | Climate Data in the Investment Process: Challenges, Resources, and Considerations Investors should not be deterred from using climate-related data, despite its imperfections, advises Deborah Kidd, CFA. Instead, they should understand the data’s risks and limitations and apply judgment to make effective use of it. Investors can help improve the current state of climate-related data by encouraging issuers to adopt global disclosure standards and advocating for disclosure regulations. https://ow.ly/ONkG50S8qNl

Hear from CFA Cleveland's own Deborah Kidd Market Integrity Insights | Climate Data in the Investment Process: Challenges, Resources, and Considerations Investors should not be deterred from using climate-related data, despite its imperfections, advises Deborah Kidd, CFA. Instead, they should understand the data’s risks and limitations and apply judgment to make effective use of it. Investors can help improve the current state of climate-related data by encouraging issuers to adopt global disclosure standards and advocating for disclosure regulations. https://ow.ly/ONkG50S8qNl

Hear from CFA Cleveland's own Deborah Kidd Market Integrity Insights | Climate Data in the Investment Process: Challenges, Resources, and Considerations Investors should not be deterred from using climate-related data, despite its imperfections, advises Deborah Kidd, CFA. Instead, they should understand the data’s risks and limitations and apply judgment to make effective use of it. Investors can help improve the current state of climate-related data by encouraging issuers to adopt global disclosure standards and advocating for disclosure regulations. https://ow.ly/ONkG50S8qNl

Hear from CFA Cleveland's own Deborah Kidd Market Integrity Insights | Climate Data in the Investment Process: Challenges, Resources, and Considerations Investors should not be deterred from using climate-related data, despite its imperfections, advises Deborah Kidd, CFA. Instead, they should understand the data’s risks and limitations and apply judgment to make effective use of it. Investors can help improve the current state of climate-related data by encouraging issuers to adopt global disclosure standards and advocating for disclosure regulations. https://ow.ly/ONkG50S8qNl

Hear from CFA Cleveland's own Deborah Kidd Market Integrity Insights | Climate Data in the Investment Process: Challenges, Resources, and Considerations Investors should not be deterred from using climate-related data, despite its imperfections, advises Deborah Kidd, CFA. Instead, they should understand the data’s risks and limitations and apply judgment to make effective use of it. Investors can help improve the current state of climate-related data by encouraging issuers to adopt global disclosure standards and advocating for disclosure regulations. https://ow.ly/ONkG50S8qNl