Shiva Dustdar

European banks have made forward strides in managing climate and nature-related risks – but more still needs to be done, Supervisory Board Vice-Chair Frank Elderson writes in The Supervision Blog. We know that: 🔹 more than 90% of banks now consider themselves materially exposed to climate and nature-related risks 🔹 all banks have now included climate risks in their stress testing framework, but nature-related risks are still often missing 🔹 banks’ more robust risk practices should now serve as a foundation for broader, more consistent application – across all material portfolios, geographies and risk types 🔹 three-quarters of banks do not yet fully cover all material climate and nature risk drivers in their internal capital assessments We will publish an updated set of good practices later this year, based on what supervisory teams have observed in banks across Europe.   Read the full blog post 👉 https://europa.eu/!h74knv

165

7 commentaires

🌍 First things first: the myth of green growth is busted. Multiple high‑profile studies confirm that absolute decoupling (shrinking resource use while GDP grows) is not happening at the global scale. The Lancet article overview article of a few weeks ago ( 👉 https://lnkd.in/eXj2zSbR) puts it bluntly: “Current economic systems are fundamentally misaligned with ecological sustainability.” See the beautiful explainer of the paper 👇 below from Dr Sandra Lee ✅ So if green growth is a fantasy, and tech won’t save us, what’s the alternative? Eric Kemp-Benedict’s new paper (👉 https://lnkd.in/eZJA2t3q) offers some pieces of the puzzle (now it is getting wonkish): 🧠 a degrowth macroeconomic model rooted in post‑Keynesian logic and stock‑flow consistency. It provides the scaffolding to think structurally about what a managed, just transition beyond growth could look like. 🔧 How it works: 🟢 A shrinking industrial core, bounded by ecological limits. 🟢 A convivial economy. Relational, decentralized, and resource-light. 🟢 Wealth as fuel: As growth halts, savings and investment must come from existing wealth. Wealth taxation becomes a key policy tool. Not as ideology, but as necessity. And yes, profit remains possible even in a steady-state economy so long as the right fiscal structures are in place. 📌 It’s about rebuilding economics from the ground up, with ecological viability and social justice at its core.

568

69 commentaires

🌊 Collaboration is critical to a Sustainable Blue Economy 🌊 At all UNOC sessions, a resounding theme echoed across governments, development banks, investors, financiers, and conservation experts: collaborative action is the key to scaling the blue economy. 🧩 The Missing Piece: De-risking with Grant Capital Institutions like the Global Environment Facility (GEF) are deploying grant capital not just for traditional conservation, but to blend finance. This unlocks flows from banks, pension funds, and asset managers into ocean finance and supports important de-risking mechanisms. The World Bank coral bond project for example, a results-based instrument backed by GEF, is structured around marine conservation outcomes that support shared risk and drive real impact for ocean ecosystems. 💡 Why This Works: • Risk-sharing: Grant capital absorbs early-stage risk. • Outcome-based funding: Ties returns to real ecological success. • Blended finance: Crowds in concessional & commercial capital. 🌍 Local Knowledge, Global Capital From coral reef insurance in the Pacific to community-led fisheries in the Indian Ocean, the message is clear: solutions must be rooted in local ecosystems and governance, but scaled with global investment. WWF for instance, is building a Blue “Venture Builder” in the South West Indian Ocean to support 100M+ coastal livelihoods — linking micro-enterprises to markets and capital. 🔑 What’s Needed Next? 1. Blue mainstream finance – banks and asset managers aligning capital flows with sustainability. 2. Investment-ready pipelines – aggregating small-scale projects into investable portfolios. 3. Science + finance – tracking biodiversity impact to build investor trust. 4. Policy alignment – national plans and marine protections that reduce regulatory risk. 🤝 It Takes a Village No one actor can do this alone. From local communities to pension funds, co-creation is the only way to mobilize the $175B/year needed for SDG 14. 🌐 our panel today with Amundi Caroline Le Meaux , Global Environment Facility Fred Boltz, WWF Louise Heaps and BNP Paribas CIB illustrated that we can move from innovation to implementation — together. #BlueEconomy #ImpactInvesting #BlendedFinance #SustainableOceans #GEF #WWF #OceanFinance #SDG14 #NaturePositive #CollaborationForImpact #UNOC2025 #UNOC3 #BlueCapital #BlueBonds Blue Bond Accelerator Sarisher Mann

108

4 commentaires

ReportingZophrenia   The EU’s Omnibus Proposal was meant to simplify sustainability reporting and reduce bureaucratic burdens on companies. However, with 80% of companies being exempted from reporting, sector-specific standards eliminated, and voluntary reporting replacing structured mandates, what I am witnessing is a collective case of ESG Reporting Schizophrenia: A Fragmented, Conflicting, and Contradictory State of Regulatory Dissonance.   What was meant to reduce red tape is now creating more complexity, as companies, regulators, and investors scramble to redefine their expectations. 3 Sides of the Same Coin: 1️⃣ The Compliance Void   “Stop-the-clock”: If rules can be changed at any moment, how can businesses plan ESG investments with confidence?   Companies that have already invested in compliance may now regret their early adoption, while others delay indefinitely, waiting for the next regulatory idiosyncrasy. 2️⃣ The Double Standard of ESG Disclosures Companies are trapped between two conflicting systems: one regulatory, one market-driven. While regulators say “you don’t have to report”, financial markets still say “we need your ESG data”. ✔ Banks demand ESG data for lending decisions: SFDR, Green Taxonomy. ✔ Institutional investors still require sustainability metrics for fund allocation. ✔ Listed companies on Euronext, STOXX, must comply with ESG requirements.   Even companies exempt from CSRD will face indirect ESG disclosure pressure, leading to a two-tier ESG ecosystem 👉 those who report for compliance and those who report for investors.   3️⃣ The Unrealistic Split   The biggest paradox of this #ReportingZophrenia is that Leaders now face a Decision:   ❓ Maintain ESG transparency, satisfy investors, and future-proof for stricter regulations. ❓ Cut compliance costs, but risk losing access to green financing and investor confidence.   Market fragmentation where voluntary reporters are favored by investors while non-reporters face capital access risks. Some companies will embrace ESG reporting as a competitive advantage, others retreat into regulatory ambiguity.   The result: A regulatory landscape plagued by inconsistency, conflicting incentives, and market-driven ESG demands.   My general advice to Leaders Navigating this Reporting Schizophrenia: 👉  Align ESG disclosures with investor expectations, even if regulation allows them to "opt out". 👉 Stay ahead of future changes: monitor upcoming shifts in SFDR, ISSB, and Taxonomy reporting. 👉  Leverage AI-driven ESG automation to reduce compliance burdens while maintaining transparency.   Again: The EU may have relaxed the rules, but ESG transparency is no longer just about compliance. It’s about strategic positioning in a world where sustainability is increasingly linked to financial performance. Straight: Do you want to work for companies that profit from misfortune, would you buy from companies that take advantage of bad situations? Antonio Freire

185

31 commentaires

Proud to support the Climate Dividends initiative! 💡 In a context where climate and ESG fields are going through a critical period, with some questioning what once seemed certain, it's time to get back to basics: clarity and convergence of standards. At 2050, we believe strongly in the value of the Climate Dividends approach. After two years of pilot phase, this initiative is ready for large-scale deployment: ✅ Tested and approved by over 30 companies and 100 investors ✅ Supported by a non-profit organization of general interest ✅ Recognized by frameworks like CERES, Glasgow Financial Alliance for Net Zero (GFANZ) ✅ Backed by a growing climate/finance/ESG ecosystem The ambition is clear: to make Climate Dividends THE standard for measuring and valuing positive climate contributions. 👏 Kudos to Laura Beaulier and team! #FertileFuture #AlignedDecision

63

2 commentaires

In the right direction, but with an ineffective focus All too often when it comes to the green transition, we in Europe rely too heavily on punitive regulation rather than on incentives to boost investments in climate mitigation and adaptation. There are currently two issues on the EU-agenda relating to supporting sustainable transition, which both exemplify this modus. The first is the realisation of the importance of carbon removals as a mean to mitigate climate change. The second is the realisation of the importance of investments in (climate) resilience to prevent unnecessary large disruptions to societal functions as well as large asset depreciations or outright losses, due to increased climate challenges. In both cases, the focal point of concern is how to increase investments through reallocation of capital and in both cases, it will be very important to create incentives to unlock private capital investments. This is dependent on the “unlocking of the fiduciary duty” of asset managers and corporations. Their primary responsibility is to their stakeholders and not the least investors and shareholders in their allocations. While it is very encouraging to see that the Commission is working to identify where there are shortcomings regarding attracting investments in climate mitigation and adaptation (which is evident in the well conducted consultations for Adaptation and Resilience), it is equally discouraging that the solutions often are sought through regulation and increased levies rather than incentives. As for Carbon Removals the Commission should be praised for the development of CRCF (Carbon Removal Certification Framework). But why not then incentivize the use of this high quality, low risk framework by arming fulfilments of the framework with the right to claim the tons in in product offerings? Plse redo the “Green Claims Directive”! For adaptation and resilience investments there is a high correlation of interest. Insurance companies don’t want to pay out, premium payers don’t want to activate the policies and authorities don’t want to panic into rescues. Why not then incentivise insurers to invest in companies that invest in adaptation? As rating institutes starts to provide physical risk assessment ratings, a useful tool is available in encouraging risk taking towards well rated assets also in this perspective. These are but simple examples of a different way of thinking and addressing the issue. I hope that our trusted politicians in future regulatory discussions in Brussels can voice this slightly more pro-business attitude, which would serve all of Europe better than regulatory development built upon mandatory adherence and supervisory oversight combined with levies.

82

7 commentaires

Responding to the climate crisis is not only about urgent action to address environmental impacts but also human impacts. As a bank, we want to ensure we conduct business in a responsible way. This starts with embedding environmental & social risk management into our business-as-usual, to mitigate potential human rights impacts. And we make sure to identify potential issues from the perspectives of all the different roles that we play: as provider of lending services to corporates and financial services to individuals, as a procurer of services and goods, and also an employer. At ING we are taking a holistic approach to climate action, that encompasses climate change mitigation, climate adaptation, nature and biodiversity, as well as human rights and just transition. We want to support our clients to drive down emissions and build up the sustainable economy of the future, while playing our part to include everyone. We are happy to contribute to the Equitable Transition initiative from the WEF. #sustainability #climatechange

60

Still feeling energised after the recent meetings in Brussels with the  #WomenClimateLeadersNetwork, European Investment Bank (EIB) Group, European Commission, and private sector representatives, with very insightful discussions about Europe’s path toward a competitive and resilient economy. Here a few takeaways that stood out for me: ·      As one participant punctuated, Europe cannot compete on fossil fuels it neither produces nor controls; we can leverage our strengths in innovation and clean energy instead. ·      Staying the course on the energy transition is not just about sustainability; it is a strategic advantage and an engine for growth, incl. affordability of energy costs for businesses and households. ·      Even though headlines on greening are abating, more European companies now see investment in sustainable production and operation as smart business, i.e. a tangible source of profitability, resilience, and competitiveness (as the latest Argos-BCG Climate Transition Barometer shows). ·      Private investors (both institutional and retail), capital markets and alternative asset finance have a key role to play; but financing only comes into play when there are viable projects and companies on the ground. ·      The EC is stepping ahead with a clear roadmap for action, from the Clean Industrial Deal and Competitiveness Fund, to startup/scale-up and energy market strategies. The commitment to a simplification of financial instruments is becoming visible (e.g. InvestEU Omnibus), ensuring they reflect the needs and capabilities of SME and financial intermediaries. ·      The EIB Group is backing this momentum with targeted platforms, instruments and advisory tools: Energy Efficiency initiative for SMEs, the TechEU platform to foster innovation in strategic sectors, including through VC, funding, as well as risk-sharing guarantees for cleantech, grid component and wind energy manufacturing, and investment readiness advice. At the conference “A Bold Vision for a Climate-Neutral and Competitive Europe”, expertly organised by Friends of Europe, participants discussed the importance of energy grids and interconnections, and the opportunities (and challenges) around critical raw materials, AI, permitting speed, and the growing resource needs of datacentres. The #WomenClimateLeadersNetwork brings together senior female experts from all 27 Member States to collaborate with the EIB Group, the European Commission, and other stakeholders, on how to drive innovation, investment and strategies for a resilient, competitive, and sustainable Europe. https://bit.ly/47d1YWy Beatriz Corredor Sierra Sandra Lagumina Linda Zeilina-Cross Maria da Conceição Lucas Sasha Bezuhanova Almudena de la Mata (PhD Max-Planck-Institut-Uni. Hamburg) Constance Kann Nancy Saich Carmen Niethammer Elvira Lefting Inge Huijbrechts, MBA Lubomila Jordanova Nina Meglič Dr. Terhi (TJ) Vapola Alexis Olans Haass Ingrid Holmes Maite Ibarretxe Helena Viñes Fiestas

38

Starting my 3rd year as independent consultant in sustainable finance, I am proud to tell that this unbelievable job makes sense, despite all sorts of skepticism heard about sustainable development and climate change. In 2024, I have developed tools and services built on the research started in 2023. It is handwork and it is a collective journey (with my clients and my trainees). I have been analyst in sustainable investment (using ESG quantitative and qualitative information) for more than 25 years. Before handling data, my job is to understand the gap between awareness and responsibility about our future. This step, often ignored by younger professionals, is important as it enlightens and frames the data handling. Through this 2024 year, I have been more and more convinced of 3 major points : 1. ESG analytical tools still need improvements. Therefore I developed applied research on tax avoidance risk, climate transition plan and methodologies of social impact assessment. 2. Sustainable finance must address the democratic problem. Europe and US have a problem with their democracies. And so far, regarding sustainable technologies, Chinese goverment has been more efficient than western financial markets. But sustainability, and notably climate transition, requires a social transformation, not only a technological one. Beside the political constraints, sustainable finance may bring tools of social consensus in the debate towards sustainability. The tools I developed integrate this democratic imperative. 3. Solutions have to be audacious. We should not feel gulty of being crazy. The world is somehow crazy in 2024 and 2025. We have to be in the world, not aside it. Sustainable finance leads to strongly modified investment decision processes. It may sound counter-intuitive. It is in fact a good way to anticipate. I thank you for your attention, I wish all of you an audacious, democracy-driven and research-driven 2025 year and hope to have an opportunity to discuss with you in 2025.

83

3 commentaires

🌍 When Markus Brunnthaler started speaking about bureaucracy, everyone in the large conference room of the Charlemagne building in Brussels listened attentively. “For much of the information we are asked to provide, we have no clue where to find it or whom to ask”, said the CEO of the small Austrian plastics processor Miraplast. “I am talking about the more than 20 million small and medium enterprises with less than 10 employees, with the entrepreneur being the one and only person in the legal compliance department - just like me.” Brunnthaler was one of more than 50 business and NGO representatives, participating in the two-day Omnibus Simplification Exercise, the effort of the EU Commission to reduce the sustainability reporting burden. Many of them contributed with impressive stories about the blossoming regulations in Europe, and the Commissioners Valdis Dombrovskis, Maria Luís Albuquerque and Michael McGrath listened carefully.   In my short intervention, I made five points: ❕ We need to stop reinventing the wheel in Europe. By now the International Sustainability Standards Board (ISSB) has created a standard that is accepted by more than 40 jurisdictions worldwide. Hence, we should align the European Sustainability Reporting Standards (ESRS) as much as possible to the ISSB framework. ❕ We need to focus on what we want to achieve and what really matters. The CSRD lists more than a thousand data points. Most of these metrics will never find their way into the steering of any company. ❕ The Green Asset Ratio is a reporting burden which has no meaning. Some banks will publish more than 100 pages with tables full of zeros for 2024. No investor, no client, no NGO will derive valuable information from this data dump. ❕ Don’t ask banks to collect data from clients which they don’t have to provide by law. While the Commission may soften the rules for the Mittelstand, it won’t help much if banks keep being obliged to collect it from their clients. ❕ We need to be realistic. If the Nationally Determined Contributions of governments under the Paris Agreement are not ambitious enough, banks cannot make up for this. If they did, they would have to stop financing companies which are needed for the transition – with no result on climate change. Non-EU-banks or less regulated entities will just jump in. While Europe always tries to make it perfect and be a leader, it has not become a showcase. If you enter a race and you think you are leading but obviously nobody is following you, you probably are on the wrong track. The Omnibus-exercise gives some hope that this is understood and will change. I am sure this will be a topic in our panel with Mekala Krishnan and Rama Variankaval at the FRANKFURT DIGITAL FINANCE Conference on Wednesday morning. Thanks to Antoni BALLABRIGA, Denisa Avermaete, Sébastien de Brouwer, Dr. Julia Dieckmann and Malte Kilian for the great collaboration. 

76

4 commentaires