The international financial landscape has rapidly evolved these past years with the emergence of new players. The necessity to adopt new responsible investment approaches has mobilized stakeholders who have grouped in several coalitions, initiatives, declarations, networks and other organizations.
Principles for Responsible Investment (PRI) Approximately 1,400 institutional investors, holding assets worth more than $59,000bn in April 2015, have adhered to the PRI initiative, an initiative launched in April 2006 . Twith the support of UN backed bodies UNEP-Fi and UN Global Compact. This initiative is a voluntary engagement for financial institutions that encourages investors to integrate Environmental, Social and Governance (ESG) criteria in their management policy. Novethic is a member of the PRI and publishes reports with the PRI. (Click here for Novethic’s reports)
The Global Compact, or United Nations Global Compact, was launched in January 1999. This voluntary pledge has 10 principles that deal with human rights, labour law, environment and corruption. Participants also pledge to communicate each year on their integration of the principles through a report entitled “Communication on Progress (COP)". Novethic uses these 10 principles in its FNG label methodology.
The United Nations Environment Program Finance Initiative (UNEP FI) was created to act as a “platform associating the United Nations and the financial sector globally”. Through its large network, the publication of research reports, the organization of conferences and training seminars, UNEP-FI contributes to promote the adoption by financial institutions of the “UNEP-FI Statements”. These are the best social and environmental practices in their activities.
The Coalition for Environmentally Responsible Economies (CERES), a US-based non-profit organization, is a pioneer in sustainable economy. Founded by a small group of investors in 1989 in response to the Exxon Valdez oil spill, it has become one of the largest networks to mobilize investors and business leadership to build a sustainable global economy. In its history, it has successfully launched several initiatives: In 1997, Ceres has started the Global Reporting initiative. Furthermore, it has forged the investor network on Climate Risk disposing of 11 trillion dollars of Assets under Management.
Launched in 2003, the Equator Principles are a common framework for financial institutions to ensure that they take into account environmental and social criteria in their financing of international projects. Signatories voluntarily pledge not to finance projects that do not satisfy a number of environmental and social criteria.
Launched in 2000, the CDP targets the acceleration of the implementation of solutions to tackle climate change. The CDP, which operates in the name of its signatory investors, requires companies to report on their emissions of the 6 main greenhouse gases and their implications in terms of risks, opportunity costs and management. In 2015, more than 827 institutional investors representing an excess of US$100 trillion in assets are signatories of the CDP. Novethic uses the data of the CDP to structure its report explaining the latest trends in finance and climate. Click here for Novethic’s reports.
Climate Bonds Initiative is an investor-focused not-for-profit organisation working to mobilize the largest capital market of all, the $100 trillion bond market, for climate change solutions. The initiative promote investment in projects and assets necessary for a rapid transition to a low-carbon and climate resilient economy. The strategy is to develop a large and liquid Green and Climate Bonds Market that will help drive down the cost of capital for climate projects in developed and emerging markets. The work falls into three workstreams. 1) Market tracking and Demonstration projects, 2) Developing trusted standards (as the CBI taxonomy) and 3) Providing policy models and advice
The Green Bond Principles (GBP), voluntary process guidelines developed by the International Capital Market Association (ICMA) and updated as of June 2016, recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach for issuance of a Green Bond. The GBP are intended for broad use by the market: they provide issuers guidance on the key components involved in launching a credible Green Bond; they aid investors by ensuring availability of information necessary to evaluate the environmental impact of their Green Bond investments; and they assist underwriters by moving the market towards standard disclosures which will facilitate transactions.
IIGCC, INCR, IGCC – The Institutional Investors Group on Climate Change (IIGCC), the Investor Network on Climate Risk (INCR) and the Investor Group on Climate Change Australia/New Zealand (IGCC) are three organizations that assemble investors that pursue similar targets: improve investors’ understanding of regulatory bodies; improve the awareness of companies and investors relative to climate change; encourage the adoption of best practices to take into account the climate impact of investors; encourage dialogue of public services to push for measures to reduce greenhouse gas emissions.
The International Corporate Governance Network (ICGN) is a network of investors that aims to improve company governance through the organization of conference and the publication of guidelines. These improvements occur through the adoption of better practices on remuneration, shareholding, corruption, etc.
Throughout the world, networks have emerged to promote socially responsible investment and the integration of ESG criteria in the financial industry. The SIF was the first created in the United States. Eurosif then followed in Europe in 2000. LatinSIF promotes SRI on the South American continent. Being a member of FrenchSIF and Eurosif, Novethic has partnered with the French SIF (FIR) on several initiatives. Since 2006, Novethic is also the French provider of market data for the European SRI Market Study.
Click here to access the French SIF's website for more information
Click here to access the United States SIF's wesbite for more information
Click here to access the European SIF's wesbite for more information
Click here to access the Latin America SIF's wesbite for more information