SUSTAINABLE FINANCE & CLIMATE CHANGE

Transcription

1 SUSTAINABLE FINANCE & CLIMATE CHANGE EFR case studies Showing commitment to the Paris Agreement FEBRUARY 2017

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3 SUSTAINABLE FINANCE & CLIMATE CHANGE EFR case studies Showing commitment to the Paris Agreement

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5 A. INTRODUCTION The financial sector fully recognises the importance of tackling climate change and is aiming to play a role in supporting Europe s transition to a low carbon economy. As EU policy-makers turn to deliver on their commitments to the Paris Agreement, including by creating a sustainable finance strategy, this paper shows the financial sector s commitment and gives concrete examples of what we are doing as a sector already. We look forward to working with EU policy-makers to deliver on these important agreements to the benefit of European citizens. Following the EFR statement in support of a strong, ambitious response to climate change before COP21 in November 2015 and the EFR call for a strong, ambitious implementation of the Paris Agreement in October 2016, we provide in this brochure EFR case studies showing why EFR companies care about climate change, their commitment and how they support the Sustainable Development Goals. from the 2015 statement We commit to putting more focus on understanding, managing and reducing carbon asset risks. We will continue to improve our implementation of strong measures for assessing and reducing sustainability risks of our own transactions. We commit to supporting our customers in their transition to a low carbon future including financing to help them channel capital into low carbon solutions and make more efficient use of energy and resources. We commit to examine how the financial sector can support progress towards the United Nations newly agreed Sustainable Development Goals, which have the potential to significantly mitigate the impact of climate change. We commit to work through the global associations such as the Institute of International Finance (IIF) and the B20 to consider at a global level how sustainability and climate considerations can further be incorporated at the core of financial institutions business activities, examining the findings of the UNEP Inquiry for a Sustainable Financial System and acting as a proactive partner to international policy-makers. The European Financial Services Round Table (EFR) was formed in The Members of EFR are Chairmen and Chief Executive Officers of international banks or insurers with headquarters in Europe. EFR Members believe that a fully integrated EU financial market, a Single Market with consistent rules and requirements, combined with a strong, stable and competitive European financial services industry will lead to increased choice and better value for all users of financial services across the Member States of the European Union. An open and integrated market reflecting the diversity of banking and insurance business models will support investment and growth, expanding the overall soundness and competitiveness of the European economy. 5

6 B. EFR COMPANY S CASE STUDIES SHOWING COMMITMENT TO THE PARIS AGREEMENT Aegon N.V. It is now widely accepted that climate change is happening and poses long-term financial risks on companies we invest in. While Aegon is committed to take action and identify potential climate related risks and opportunities, currently there is significant uncertainty around what actions will be taken to combat climate change and how the energy transition will play out over the next several years. This, coupled with the limitations of current methodologies to measure risk makes it very challenging to accurately identify and measure climate-related investment risk. Nevertheless, Aegon is dedicated to follow relevant developments, assess how the companies and industries we invest in will be impacted, and encourage the transition to a low-carbon economy. Aegon commits to: Integrate climate change into investment process: evaluated carbon-footprinting methodologies in 2014 and 2015, and organized a project supported by South Pole and Carbon Tracker to analyze climate-related investment risk in Findings expected early Active ownership: engaging with a selected number of holding companies to address issues such as climate disclosure, adaptation, and risk management. Divestment: divesting holdings in companies with more than 30% revenue from coal mining. Encourage government action: supporting signed letters urging the G20 to follow through on the Paris Agreement commitments. Aegon also joined a coalition urging the Dutch government to establish new climate laws. Green opportunities: investing, and continuing to look for investment opportunities in green technology and infrastructure. Aegon is launching a project to investigate these opportunities in more detail early How we support the Sustainable Development Goals (SDGs) Aegon supports the SDG s by investing over EUR 8 billion in environmentally and socially focused areas, such as affordable housing, renewable energy, and microfinance. As an example of these initiatives, in 2016 Aegon invested 45 million Euro in a 288 MW offshore wind farm in Germany. Aegon has also been involved in a six-month consortium of Dutch financial institutions supported by the Dutch government and Central Bank. In their report Building Highways to SDG Investing, the group sets out recommendations that will help accelerate and scale investments in SDGs. 6

7 Aviva There is no greater collective risk we face today than tackling climate change. This is not at odds with business or investment, but a business imperative. As an investor, research we commissioned from the Economist Intelligence Unit showed that, from the perspective of an investor, an estimated $13.8 trillion dollars of global assets, discounted to present day value, are at risk if global temperatures rise by an average of 6 C. As an insurer, more than 4 degrees would mean insurers wouldn t be able to cover the risk and the Paris Agreement provides us with hope that many of the extreme weather-related catastrophes that are associated with a changing climate will not come to pass. Our 2015 strategic response to climate change commits us to: Integrating climate risk into our investment considerations our system covers over 90% of our global Assets Under Management (AUM). Investment in lower carbon infrastructure we target 500 million annual investment for the next five years Supporting strong policy action on climate change we take part in the FSB Task Force on Climate-related Financial Disclosures and published an EU toolkit with sustainable finance ideas. Active stewardship on climate risk we engage with companies to achieve climate-resilient business strategies and publish records online. Divesting where necessary. How we support the Sustainable Development Goals (SDGs) We strongly support the SDGs. During their launch in 2015, our CEO Mark Wilson addressed the 70 th UN General Assembly plenary session on the role of businesses in achieving the SDGs. On 21 September 2016, Mr Wilson, speaking at a UN President of the General Assembly meeting in New York, called for businesses and Governments to work in partnership to successfully deliver the SDGs. We have also published two reports setting out our ideas to deliver the SDGs: Mobilising Finance to Support the Global Goals for Sustainable Development (2015) Money Talks: How Finance Can Further the Sustainable Development Goals (2016). 7

8 Allianz Group Recognizing that climate change can severely impact our business activities, we started to integrate climate and sustainability criteria in our investment decisions in To enable protection from climate risks in the regions most vulnerable to climate change, we build on our experience as leading micro-insurer, offering primarily credit and life insurance policies to 57 million customers. Allianz has a dedicated competence center on climate change, Allianz Climate Solutions. We want to anticipate the risks of climate change, care for our customers and enable the transition to a lowcarbon economy. Because managing risk is our profession. Sustainable Investment in renewables energies: > EUR 3 bn invested, target of EUR 5 bn. Systematic analysis of proprietary investments using 37 ESG criteria. Divestment from coal-based business models Minimizing environmental impact through energy efficiency, sourcing renewable energies and low-carbon travel alternatives. Measurement and reporting of performance since Carbon neutral since Insurance: We incentivize preventive measures and compensate our customers losses e.g. from extreme weather events. Engagement: Allianz is member of UNEP FI, B-Team and MCII, signatory to UNEP FI PSI, UN PRI, UN PDC, follows engagement strategy in asset management and conducts climate-related research. SDG 1 Poverty: Increase insurance penetration, member of G7 Initiative on climate risk insurance. SDG 7 Energy: 1. Invest in renewable energy (RE); 2. Divest from coal; 3. Insure RE and storage. SDG 9 Infrastructure: 1. Allianz France invests in a fund for African infrastructure, including RE. 2. Give climate-resilience advice to developing countries when building new infrastructure. SDG 13 Climate: Group Climate Strategy, Anticipate. Care. Enable. (see above). SDG 17 Partnerships: 1. Engage in PPP initiatives such as IDF, UNEP FI and similar. 2. Development of climate finance instruments as part of the Global Innovation Lab for Climate Finance. 8

9 AXA AXA s strategy regarding climate change is to leverage its risk management expertise to better understand and prevent risks and to mobilize its investment capacity to finance and encourage the energy transition. This strategy addresses both the mitigation and the adaptation dimensions of climate change. Insurers are well equipped to address climate-related risks. They can fund and promote risk research and education. They possess loss data, as well as models and tools to analyze and project this data. They have a duty to unveil and disseminate knowledge about such new risks, including poorly known threats to society. Through their significant investments, they are also well positioned to send the right signals to the investment community and to specific invested companies. Coal divestment - AXA has decided to divest from companies most exposed to coal-related activities. This 500ME divestment was undertaken in the belief that sending such a signal to markets and regulators generates a positive influence, it contributes to de-risking our portfolios, it supports an energy transition curve which is aligned with a + 2 C scenario and is consistent with our broader Corporate Responsibility strategy to promote a stronger and safer society. Green investments We committed triple our investments in green assets to reach 3Bn by Carbon footprinting - We signed the "Montreal Pledge" to assess and disclose the carbon intensity of our investments. This public carbon foot-printing analysis covers 75% of our general account assets (over 400Bn ). TCFD - AXA serves as one of four Vice-Chairs in the Task Force on Climate-related Financial Disclosures (TCFD) established by the Financial Stability Board (FSB) in January Carbon pricing We are the first insurer to join the Carbon Pricing Leadership Coalition, a public-private-civil society initiative led by the World Bank. Through our diverse actions and public commitments we fully support the delivery of the SDGs. As an example, we take part in the UN Global Compact initiative, launched in July 2000 by then UN Secretary General Kofi Annan, which seeks to encourage businesses, UN agencies, the labor market and NGOs to work together to integrate Sustainable Development Goals, universal principles on human rights, labor, the environment and the fight against corruption. The Global Compact is based on the rules of international law adopted by the majority of countries, such as the Universal Declaration of Human Rights and the standards promoted by the International Labor Organization. Each year, as an "active member", AXA updates the Global Compact database with information on best practices that reflect these principles, via a dedicated "Communication on Progress". 9

10 Barclays Climate change, with its risks and financial implications, is a critical issue that we must address. Understanding those risks, as well as the opportunities, through increased disclosure and transparency is certainly necessary for market participants to make informed and efficient capital allocation decisions. Banks are uniquely positioned to facilitate the flow of capital towards environmentally and socially beneficial activity. Given our expertise, Barclays is well-positioned to help facilitate the capital required to accelerate the transition to a low carbon economy. We will: As a member of the FSB s Task Force on Climate Related Financial Disclosures, provide a response to their recommendations on how to improve transparency and build better understanding of potential climate-related risks and opportunities. Continue to play an active role in the UN Environment Programme Finance Initiative (UNEP FI) and the Banking Environment Initiative (BEI), and as a founding member of the Equator Principles Association, which reviews and maintains the Equator Principles. Barclays is a signatory to the Green Bond Principles and is a member of the Climate Bond Initiative. Continue to grow our Treasury Green Bond portfolio to 2bn over time. Reduce our credit exposure to fossils fuels, with a particular short term focus on coal, and move towards development of cleaner energy sources. Continue to facilitate access to financing solutions for issues such as energy efficiency and renewable energy working with both issuer/corporate clients and with institutional investors. Manage our direct environmental footprint and commit to a target to reduce absolute carbon emissions by 30% by 2018, compared to a 2015 baseline. In development of our Citizenship strategy, the Shared Growth Ambition (launched June 2016), we undertook extensive research and stakeholder engagement to understand where as a business we could have the greatest positive impact in relation to the SDGs. We believe private capital will be needed to leverage public investment to achieve the SDGs. Our approach is highlighted by the following: SDG 7: Affordable and clean energy: We are committed to delivering a range of financing solutions to solve global challenges including renewable energy and energy efficiency SDG 9: Industry innovation and infrastructure: Our Corporate Bank produced a report on energy resilience in UK manufacturing as it has become a critical issue for the industry and therefore many of our clients SDG 11: Sustainable cities and communities: We have supported farmers and landowners in a variety of renewable energy projects, including wind, hydro, solar, biomass and anaerobic digestion SDG 15: Life on Land: Our human rights agenda and our approach to managing our environmental impact ensures we mitigate risks associated with biodiversity loss, deforestation and land degradation 10

11 BBVA Climate change is one of the biggest challenges of the 21st century and therefore requires an immediate response from each and every single economic actor. As a leading and global banking Group, BBVA has an important role to play in promoting the transition to a low carbon economy and promoting a sustainable development. The Group has expressed its commitment to fighting climate change. In addition to its contribution to a number of collective initiatives, BBVA has taken several actions aiming to reduce direct impacts on the environment, as well as providing climate finance solutions. The Group is currently working on a plan to ensure a comprehensive integration of environmental factors in the risk management of the company. BBVA s commitments and initiatives to fighting climate change: New environmental & social risk framework to be adopted in 2017 (continuous improvement of the identification and management of environmental risks in the Group s operations) Continue leading the market in renewable energy funding: 1,221 MW financed in 2015 (+17% than 2014) Green bonds market: leading Spanish institution in green bonds underwriting. Review of all operations under the Equator Principles, regardless of the amount (application beyond mandatory scope) Ecorating tool: Risk portfolio rating of SMEs from an environmental perspective (Spain and Mexico) Renew Global Eco-efficiency Plan (figures per person for the Plan: -16% CO2 emissions; - 43% paper consumption; -23% water consumption; -14% electricity consumption; 33% people working in certified buildings - ISO, LEED) The role of the private sector as a lever of change in the implementation of the SDGs is widely recognized and strongly supported by BBVA, as highlighted by its active participation to the European Development Days One of the main BBVA s contributions to the sustainable development lies in promoting banking solutions for financial inclusion, mainly in Latin American emerging markets: more than 10 million customers benefit from low-cost digital channels products, specially designed for the financially excluded segment. BBVA Microfinance Foundation, one of the 13 world institutions that form part of the United Nations Private Sector Advisory Group for the Sustainable Development Goals Fund, and awarded consultative status by the UN in recognition of its work in microfinance for development, serves 1.7 million entrepreneurs, 85% of whom are in a situation of vulnerability. BBVA also contributes to the sustainable development through its wide range of financial education and capability building programmes, an extensive research activity, as well as several social projects, in many geographies, aimed at supporting SMEs and women entrepreneurship. 11

12 BNP Paribas As a global institution financing the energy sector, BNP Paribas environmental priority is to combat climate change in the spirt of the Paris Agreement, one of whose objectives is to make financial transactions compatible with low-carbon development. To minimize the impacts of climate change it is estimated that the rise in temperature must be limited to 2 C by Reaching this objective requires a rapid energy transition based on efficiency and renewable energies. Financing this transition will require 2 to 3 trillion dollars in financing per year, according the International Energy Agency, and a global bank such as ours has an important role to play in this. Finance green infrastructures and energy efficiency: BNP Paribas will more than double its financing of the renewable-energy sector so as to reach 15 billion in 2020 and it aims to be among the three leading global participants in the market for euro-denominated green bonds Reduce the carbon footprint of investment portfolios: In the area of asset management, our group has pledged to measure, publish and reduce the carbon footprint of funds managed within the framework of the Montreal Carbon Pledge and the Portfolio Decarbonization Coalition. Manage the financing of coal: BNP Paribas will no longer finance coal extraction, whether via mining projects or via mining companies which do not have a diversification strategy. In a similar move, the bank has decided to no longer finance coal-fired power stations in high-income countries and to strengthen eligibility conditions in other countries. Integrate climate factors into the rating methodology which evaluates projects and companies financed. As a result, the Group will gradually make systematic use of an internal carbon price. By financing and investing in an ethical manner, BNP Paribas contributes to the economic development and the creation of jobs in the countries where the Group is present. Furthermore, in order to participate in building a more sustainable future, the Group finances and supports projects with a high positive impact and which contribute directly to reaching the Sustainable Development Goals. The aim of these 17 goals, defined by the UN, is to eradicate poverty by the year 2030 while preserving the planet. 12

13 Crédit Agricole Group There is a key role for financial institutions to play in combating climate change. Crédit Agricole Group s commitment to tackle climate change is consistent with its global efforts towards environmental and social responsibility. Firstly as a company, we have a duty to reduce greenhouse gas emissions related to our business activities. Secondly as an advisor, a lender, an investor and an insurer, Credit Agricole is instrumental in encouraging its customers - individuals, companies and local authorities - to opt for projects that mitigate climate risk. Lastly, we can accelerate innovation in the sphere of climate change. Pursuant to Mr Brassac s commitments at the COP 21 in December 2015, concrete progresses have been made. At 31 December 2016, CA Group ranks slightly above its 2015 commitments: EUR 28 billion arrangements in support of energy transition i.e. about half of the planned EUR 60 billion over 3 years EUR 1.1 billion of liquidity invested in Green Bonds out of the planned EUR 2 billion by Credit Agricole SA and Credit Agricole CIB Renewable energy financing have increased by 21% in 2016 (from EUR 425 million in 2015 to EUR 514 million in 2016) EUR 150 million of funding mobilised by Amundi through its joint management company with EDF for energy transition projects out of the planned EUR 5 billion by 2020 In October 2016 Credit Agricole extended its 2015 commitment to stop financing coal mines to also cover the financing of any new, or extension of, coal-fired power plants. This decision also applies to companies working mainly on these projects. In 2015 we committed to further reduce our direct carbon footprint by 15% by 2020 through our energy consumption, transportation and other emission sources. Credit Agricole supports the SDG through its CSR policy and actions. We focus on the most relevant actions considering our core business of finance provider, investor and insurer, and as civil society actor through multiple tools (financial, collaborative, behaviour influencer ). Our climate change commitments are consistent with SDG 7 (clean and affordable energy source); SDG 9 (industry, innovation and infrastructure) and SDG 13 (climate action). The actions of our insurance subsidiary are consistent with SDG 3 (health and well-being). Our local activities contribute to SDG 8 (decent work and economic growth). Our involvement in and expertise of the agricultural sector both in developed and developing nations strengthen our contribution to SDG 2 (fight against hunger) and SDG 1 (fight against poverty) through our micro-finance Grameen Credit Agricole foundation. 13

14 Credit Suisse AG Credit Suisse recognizes its share of responsibilities in combating climate change by supporting the transition to a low carbon and climate resilient economy. As a financial institution, we are committed to playing our part in addressing this global challenge through our role as a financial intermediary between the economy, the environment and society. To underline Credit Suisse s commitment, our CEO and the Executive Board are the most senior decision-making authorities on sustainability matters including climate change. We have developed policies and procedures to govern the responsible provision of financial services to clients within specified business sectors that may pose elevated environmental and social risks, including climate impacts. We are committed to playing a part in facilitating financing solutions to support the transition to a global low carbon energy system, and are well placed to do so given our capabilities in the market. We became greenhouse gas neutral for our operations globally in 2010 through the Credit Suisse Cares for Climate initiative. Our four pillar GHG neutrality strategy includes optimizing operations, capital expenditure, substitution and compensation. In 2015, Credit Suisse published a report entitled Aiming for Impact: Credit Suisse and the Sustainable Development Goals to illustrate how the SDGs provide tangible opportunities for companies to pursue business objectives while contributing to sustainable development. We have taken a number of measure to tackle these new challenges and developments. For example, by enabling economic activity especially at the base of the pyramid, our microfinance platform has the potential to address SDGs 1 (eliminating poverty), 2 (food security), 4 (education), 5 (gender equality), 8 (sustainable economic growth and employment), 12 (sustainable consumption and production) and 17 (global partnership). 14

15 Deutsche Bank AG Public and private sector collaboration will be critical to promote and finance a shift towards a low-emissions global economy, and climate resilient development pathways. Energy efficient technologies and renewable energies are an essential part of a climate friendly development of the economy and society. Significant investments will be required in the coming decades to finance these technologies. As a global bank, we can make an important contribution to raising the capital needed to implement the Paris Agreement. As with other industries, the financial sector is exposed to climate change. Accordingly, we seek to demonstrate how Deutsche Bank contributes to the reduction of climate related risks and how we support the transition to a low-emission economy through our core businesses. Specific due diligence for transactions and client transactions in sensitive sectors with high potential for significant environmental and social impacts. Revised approach to financing coal mining and power, clearly stating no new financing for the expansion of coal capacity, and a gradual reduction in overall exposure to coal. Arranged about USD 4.3 billion in project finance for renewable energy projects in Supported clients to issue EUR 8 billion in green bonds until the end of Contributed to global climate debates, e.g. discussed green finance policy plans for Germany s G20 Presidency in 2017 (Deutsche Asset Management) Continued to operate on a carbon neutral basis. Deutsche Bank acknowledges that private sector participation is needed to achieve the SDGs. We understand that the SDGs form a useful benchmark for corporations by defining and prioritizing the most urgent global challenges. Our licence to operate will increasingly depend on our contributions to the SDGs. In 2016, Deutsche Asset Management managed ten sustainable and impact funds with a combined volume of over USD 1.76 billion, including e.g. the African Agriculture Trade and Investment Fund, the European Energy Efficiency Fund, the Green Growth Fund and several microfinance instruments. Deutsche Bank was the first commercial bank globally to become accredited to act as implementing entity for the UN Green Climate Fund. In October 2016, the fund approved an initial USD 78.4 million investment in Deutsche Asset Management s Universal Green Energy Access Program. This anchor investment will allow us to raise a total of USD 300 million in capital. 15

16 Generali As a global player, Generali wants to play an active role in supporting the transition towards a more sustainable economy and society. Insurance is the financial sector that is going to be one of the hardest hit by climate change, from rising claims to losses on investments. As an insurer, whereas climate change has an impact on local conditions in the countries where the Group sells its products, this will be reflected in the risk associated with the products sold. In extreme cases, some coverage could no longer be economically sustainable and therefore no longer available. As an institutional investor, not acting or acting too late exposes Generali to three main risks: market risk, image risk and regulatory risk. Direct impacts Main goal of reducing our greenhouse gas (GHG) emissions by 20% by 2020 (base year 2013), to be met through a series of sub-targets that regard all aspects of the business activities. Indirect impacts We incentivize our clients to adopt environmentally sustainable behavior We invest in a sustainable way by increasing investments in renewable energies and the supporting infrastructure and by excluding from the investment portfolio companies involved in episodes of serious environmental damage. We incentivize virtuous behavior in our supply chain Public commitment We invest in research and innovation We dialogue and work with national and international institutions (UNEP, CDP, The Geneva Association, Paris Pledge for Actions) Insurance solutions Generali France offers to SMEs a consulting service for business risks assessment, integrating elements like financial results and intangible assets (reputation and brand). Generali Performance Globale provides discounts on insurance premiums and support in the plan development. Risk assessment criteria include supply chain management, knowledge of quality standards, workplace health and safety, occupational diseases, resources consumption, waste management, personnel management and professional development. 16 Initiative for employees and external stakeholder For the World Environment Day, Generali launched a campaign aimed at raising awareness of the environmental challenges. Green tips on how to reduce energy, water and paper consumption and to promote sustainable mobility were published as well as environment-related news. For the European Mobility Week, Generali launched a communication campaign, including videos, aiming at raising awareness of road safety and sustainable mobility.

17 HSBC Climate change represents an urgent and potentially irreversible threat to human society and to the global economy. If unchecked, climate change threatens the customers, the communities and the environment on which HSBC s business has been built over 150 years. If HSBC is to continue to help people to fulfil their hopes and realise their ambitions, it has an important role to play in combating climate change. HSBC believe major global institutions have an essential role in financing some of the significant economic and social shifts, as well as innovative solutions, necessary to transition to a low carbon economy and keep the global temperature increase below 2 C. Through our Climate Business Council, HSBC will drive climate-related business opportunities, focusing on helping clients transition to a low-carbon economy. A new dedicated Sustainable Financing Unit will support coverage and advisory bankers to develop content and product development and help Global Markets to mobilise sources of sustainable finance. HSBC continues to participate in important initiatives such as the Carbon Pricing Leadership Coalition, the Energy Transitions Commission and the New Climate Economy, championed by our Group Chief Executive Stuart Gulliver We support progress on climate-related financial disclosure guidance for all companies including banks and financial institutions - supporting the implementation of Financial Stability Board Disclosure Taskforce (HSBC s former CAO is a Special Adviser to the TCFD). HSBC France has issued a (EUR500 million) green bond and HSBC Holdings is committed to invest USD 1 billion in high-quality assets covering a range of low-carbon initiatives. As a UN Green Climate Fund accredited entity, one of only three banks, we have committed to helping the Fund finance more green projects this year. We will continue to engage with UNEP and the G20 Presidency on disclosure, risk mitigation and infrastructure financing. We are committed to retaining our position as a lead issuer of green bonds recently acting as sole green structuring adviser and joint bookrunner for the Polish government s EUR750 million green bond: the first sovereign green bond to be used to fund renewable energy projects, clean transport technology and sustainable agricultural operations. HSBC Global Asset Management are active stewards in climate risk. As signatories to the Montreal Carbon Pledge we continue to measure and publically disclose the carbon footprint of part of our equity portfolio. HSBC has invested 1.85bn of its UK employees pension savings in a new environmentally friendly fund: the Future World fund run by Legal & General Investment Management, as the default equity option for its DC pension scheme. 17

18 Sustainability underpins our strategic priorities. In a global marketplace where the private and public sectors are increasingly interlinked, the SDGs present an opportunity for businesses to play a role in global sustainable development. As a responsible business, HSBC seeks to implement strategies that advance inclusive economic growth, social equity and progress and environmental protection to deliver long-term value. HSBC already delivers high social and environmental benefits through various business activities. Climate Change Research, the HSBC Water Programme, Asset Management and Bus Rapid Transport are some of our world-leading examples. As an example, our Water Programme, launched in 2012, is a five-year, USD100 million programme in partnership with Earthwatch, WaterAid and WWF and local project partners. It aims to provide and protect water sources, inform and educate communities in need, enabling people to prosper and driving economic development. 18

19 ING Bank N.V. Climate change is an unparalleled challenge for our world. A challenge to our planet s health, a challenge to the sustainability of societies and of economies around the world. Banks also have a role to play. ING plays its part in various ways. Our activities impact the environment we operate in both directly, through our operations, but also indirectly, through our financing portfolio. Being sustainable is not just about reducing our own impact, it s in all the choices we make as a lender, as an investor and through the services we offer our customers. We approach the idea of sustainable transitions from three perspectives: our own transition, our clients transitions and our business supporting society s transition. Our own transition: reducing our own impact on the environment through our operations and suppliers. We monitor and manage our environmental impact closely. We are transparent about the climate impact of our operations, invest in operational efficiency solutions, are commited to sourcing 100% renewable energy by 2020, integrate sustainability in our procurement process and have been offsetting our carbon emissions since We aim to improve our environmental impact through our operations by setting science-based targets, and reducing the impact of our buildings, our IT systems and our business travel. Our clients transitions: we support clients in their efforts to grasp opportunities to innovate their businesses, but to also support them when they face challenges in developing (new) business models that are more sustainable. At the same time, we apply strict social, ethical and environmental criteria in our own financing and investment policies and practices. Alongside the ESR screening, we intend to seize opportunities in this area as well by increasing Sustainable Transitions Financed (STF). STF represents the volume of business that ING conducts with clients and projects that provide sustainable solutions and are environmental or social outperformers and therefore contribute to a more sustainable economy. We aim to continuously grow the number or volume of Sustainable Transitions Financed. We successfully issued our first green bond in November 2015, a milestone in achieving our sustainability ambitions as it aligns our green lending activities with our corporate funding programme. Parallel to this, we are researching whether a link can be drawn between increasing the STF and the avoidance of water usage, waste generation and carbon emissions. This way, we would be able to measure the actual environmental impact of financing more sustainable projects. Our ambition is to finance 35 billion in sustainable projects and customer transitions in Supporting society s transition: Via our clients transition to more sustainable businesses, we improve the environmental impact on society. Their combined efforts can make a significant difference. We help create awareness and promote sustainable solutions via sharing our knowledge and collaborating with partners to drive progress for society and to engage on the issues of (the financing of) climate adaptation and mitigation. Finally, partnering for climate action. Accelerating change cannot be done alone. That s why we engage with clients, business partners and other societal stakeholders and collaborate in supply chains and at industry level. That s why we share knowledge based on research and why we commit to or are part of international initiatives such as the UN Global Compact, the OECD Guidelines for Responsible Business Conduct and the Equator Principles. 19

20 We indirectly contribute to many SDGs through the clients and specific projects we finance and the financial services we offer. However, we can have the most impact on the goals that are most aligned with our portfolio and strategic priorities. As a bank committed to empowering our customers and accelerating sustainability within our company as well as with our customers and in society, our primary focus is therefore on the goals on promoting sustainable and inclusive economic growth (goal 8) and sustainable consumption and production (goal 12). These SDGs resonate with ING s approach to sustainability. We aim to report on our contribution to several SDGs in our Annual Report, including our primary contributions to SDGs 8 and

21 MAPFRE The fight against climate change is a key component of the company's actions on environmental responsibility. MAPFRE aims to lead the transformation toward a low-carbon economy and to incorporate as part of its business the risks and opportunities arising from climate change. MAPFRE as an insurance company is fully aware of the impact of climate change on financial markets and the importance of acting immediately by defining specific, measurable and transparent goals. MAPFRE is committed to the reduction of 20% of its global emissions of greenhouse gases, through a strategy aligned with the objectives of the European Union targets and based on: Reducing energy intensity through energy efficient investments. Promoting clean energies such as buying green energy with guarantees from renewable sources. Offsetting emissions of greenhouse gases. MAPFRE is facing the SDGs with the same commitment that has been working, and reporting, in the previous Millennium Development Goals. To contribute to the fulfillment of the new agenda, we re working it within our commitment to Global Compact of the United Nations, entity that MAPFRE joined in Also, the new Sustainable Development Goals are part of the strategy of MAPFRE. The SDGs are reflected in the first line of our Sustainability Plan which aim is to determine the positioning of the company in the SDGs and identify and measure the impacts of MAPFRE in those objectives. 21

22 Nordea The world is challenged by impacts of climate change and increasing resource scarcity. These challenges are putting pressure on natural habitats, communities and people as well as on businesses, presenting a threat to global prosperity. By advising our clients and acting on their behalf we can make important contributions to economic growth and prosperity, through capital allocation, interaction with companies and by building partnerships. This is not only an opportunity, but a part of our fiduciary responsibility. We integrate climate change in our investment and lending decisions and in all of our business operations. We are signatories to the Paris Pledge. As signatories to the Montreal Carbon Pledge we commit to measuring and publicly disclosing the carbon footprint of our investment portfolios on an annual basis. We engage with companies and other stakeholders including policymakers on climate change, individually or through collaborative initiatives with global reach and supported by a large number of investors. We are members of and engage through IIGCC, CDP and the PRI. We screen all of our holding against environmental norms, including the Paris agreement. We do not invest in companies with 75% of revenues derived from sales of coal products. We are signatories to the UN Global Compact, UNEP FI and the Equator Principles. We fully support the SDGs and the development of a sustainable finance sector that can contribute to the delivering of the SDGs. Our sustainable finance strategy is aligned with the SDGs as well as the Paris Agreement. We engage on issues related to the SDGs as part of our active ownership and with a number of stakeholders and standard setters, individually or through collaborative initiatives with global reach. 22

23 RBS Climate change is a major global issue and we are committed to the role we need to play in addressing the problem through the services we provide and the way we run our bank. Human-influenced climate change is real, happening now, and must be tackled to mitigate the worst impacts for the future. The Paris Agreement provides the framework for achieving the 2 degree ambition, but the size and scale of the transformation needed means everyone not just Governments must play their part. We are a bank, which means our biggest influence lies in the money and services we provide to customers. Relative to our size, our operational footprint is quite small, but also significant. Our strategy on climate change is therefore structured into three main areas: Our financing of the solutions to climate change such as low carbon technologies, energy efficiency and adaptation measures, including a planned 1bn of sustainable energy deals in Measuring and tracking our transition away from financing the most carbon intensive activities, including a reduction of 75% in our exposure to energy sectors since The efficiency of our own buildings and operations, where we have seen a 20% reduction in our scope 1 and 2 emissions since As part of our strategy to simplify our business, RBS is changing significantly to become a UK and Ireland focused bank with strong presence in personal and business banking markets. Through this process, RBS is working to identify the most relevant Sustainable Development Goals to the markets and geographies in which we operate and our evolving sustainability strategy. At present, we see very close alignment between our activities and the SDGs relating to poverty, gender equality, affordable and clean energy, decent work and economic growth, sustainable cities and communities and climate action. We expect to further develop our approach to these goals in the coming years, in line with our wider ambition to become a sustainable bank delivering long term value to all its stakeholders. 23

24 SEB As a bank, we are naturally influenced by developments in the world and the global economy, including challenges connected to sustainability. SEB supports that the Paris agreement for the first time recognized that the business community is a driver for innovation and sustainable development and that the financial sector s importance and large indirect impact now is widely acknowledged. We commit to initiatives like the UN Global Compact, the Principles for Responsible Investments and the Equator Principles and we work persistently to integrate sustainability into our business strategy, processes and offerings. SEB commits to be a role model in sustainability within the financial industry. To reach this, we will continue to focus on promoting climate friendly and resource efficient solutions, sustainable investments, and supporting entrepreneurship to drive economic development and create new jobs. We will continue to reduce our own environmental footprint, in particular reducing our CO2 emissions with 20 per cent by For 2016, SEB has the objective to disclose carbon footprint for the majority of SEB s equity funds (from seven funds in 2015). SEB also commits to reduce our electricity consumption by 20 per cent by We have done an initial analysis of the 17 sustainable development goals and mapped these towards our eight priorities as a bank. This work will continue as we define how to integrate them into the bank s operations and decide what actions to take. 24

25 Société Générale Given current climate upheavals, the major challenge of the XXI century is to preserve the environmental stability at the global stage. In the run-up to the 2015 COP 21 Summit, Societe Generale (SG) engaged to align its financing in line with the International Energy Agency (IEA) 2 degrees scenario by As part of its commitment with the IEA 2 degrees scenario, SG set out a global framework that pulls together and strengthen: The various initiatives taken by the Bank over the past years to help financing the energy transition; The reduction of the Bank s carbon footprint of its activities. Reducing the coal sector financing. SG is no longer involved in project financing of coal-fired power plants in high income OECD countries, nor in projet financing of development of coal mines. Fight against deforestation. SG reinforces its commitments on forest conservation by adopting the Banking Environment Initiative (BEI) s Soft Commodities Compact with the Consumer Goods Forum. Renewable energy. SG is doubling its financing capacity for renewable energy projects by Green financing. SG focuses on the diversification of different energy production sources while helping clients to reduce their energy consumption. SG also steps up its actions related to the adaptation to the climate-change in developing countries. Societe Generale contributes to the Sustainable Development Goals through several commitments that the group has made: SDG 7 Renewable Energies: we engaged in 2016 in investing in renewable energies and divesting from coal; SDG 2 Renewable Energies: we engaged to align our financing with the International Energy Agency (IEA) 2 degrees scenario by 2020; SDG 15 Deforestation: we committed to stop deforestation by adopting the Banking Environment Initiative (BEI) s Soft Commodities Compact with the Consumer Goods Forum; SDG 17 Partnerships: we engage in partnerships to support the sustainable and climate-resilient development of our clients in developing countries. 25

26 Swiss Re Ltd. Climate change has been our most important material issue for many years: For a reinsurer, it constitutes a key material topic because it will lead to an increase in the frequency and severity of natural catastrophes such as floods, storms, excessive rainfall and drought. In combination with growing asset concentrations in exposed areas and more widespread insurance protection, this will cause a steady rise in losses. Of our key material topics, two are directly connected to climate change: managing climate and natural disaster risk, and advancing sustainable energy solutions. Swiss Re is committed to: Advancing our knowledge and understanding of climate change risks, quantifying and integrating them into our risk management and underwriting frameworks where relevant. Developing products and services to mitigate or adapt to climate risk. Raising awareness about climate change risks through dialogue with clients, employees and the public, and advocacy of a worldwide policy framework for climate change. Tackling our own carbon footprint and ensuring transparent, annual emissions reporting. Swiss Re endorses the UN Agenda Many of our activities contribute to one or several of the agenda's 17 global goals. We address selected SDGs with our key material topics. Managing climate and natural disaster risk contributes to SDG 13, Taking action to combat climate change and its impacts. We set ourselves the goal of offering USD 10 billion protection against climate risks to sovereigns and sub-sovereigns by We further defined ambitious goals to continue reducing our own environmental footprint. Advancing sustainable energy solutions contributes to SDG 7, Ensuring access to affordable, reliable, sustainable and modern energy. We use our capacity and technical expertise to provide effective risk covers for complex offshore wind farm projects. In addition, we set the goal to obtain 100% of power used for our own operations from renewable sources by Managing sustainability risks and investing responsibly contribute to SDG12, Ensuring sustainable consumption and production patterns. We consistently identify potential sustainability risks in our business transactions and abstain from them if warranted. We further have an investment target for green bonds of at least USD 1.0bn. In 2016, we committed to adopting the recommendations of the FSB Task Force on Climate-Related Financial Disclosures. An example of how we contribute to SDG 17, Partnering for the goals, is our commitment to the Grow Africa Partnership. We offered up to 1.4 million smallholder farmers in Africa protection against weather risks. 26

27 UBS AG Climate change is one of the most significant challenges of our time. The world s key environmental and social challenges such as population growth, energy security, loss of biodiversity and access to drinking water and food are all closely intertwined with climate change. This makes the transition to a lowcarbon economy vital. We are determined support this transition for our clients and our firm through our comprehensive climate change strategy on risk management, investments, financing, research and our own operations. We support renewable energy and clean tech transactions. We do not support transactions of companies operating coal-fired power plants unless they have a strategy to reduce coal exposure or adhere to the strict greenhouse gas emission standards recommended by leading international agencies. We do not support certain coal mining companies and significantly limiting lending and capital raising provided to the sector. We commit to secure 100% of our electricity from renewable sources by 2020, thereby reducing our own greenhouse gas footprint by 75% compared to 2004 levels. We strongly support the SDGs, as endorsed by Axel Weber at the UN Global Compact Leaders' Summit in June We continue to design financial products on SDG themes to satisfy the growing appetite of our investors for sustainable investing. We recently raised a record $471 million for the UBS Oncology Impact Fund, an impact investing initiative to develop cancer treatments. In collaboration with the UN, UBS will launch a global sustainability index based on the Global Compact 100 stock index. UBS launched the UBS Grand challenge, a global employee competition, calling for innovative financial solutions to five of the biggest world challenges as defined by the SDGs. 27