Oct 03, 2021

Sustainable Finance Market Update

Sustainable Finance Market Update

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.

Cross-cutting Issues in the Sustainable Finance Global Market 

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.

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.

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.

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.

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.