منشور Yannick Zwinselman

SFDR - where do we go from here? The results from the targeted SFDR consultation are in; and while the future of the regime is still up in the air (more direction expected before summer), there are some clear market sentiments that will likely influence the regime's future: ▶ Death to Articles 8 and 9? 54% prefer a system that is not based on the current approach (but for example focuses on labels such as transition finance) ▶ Demand for strengthened and harmonised disclosure rules to level the 'sustainability' playing field and reduce greenwashing risk & uncertainties ▶ Duplication on entity-level disclosures (e.g. due to CSRD/ ISSB) critiqued (with the exception of sustainability risk policy transparency) Reach out if you fancy a chat about the upcoming tidal wave in the sustainable finance space. #sfdr #sustainablefinance #uksdr #transitionfinance

Cheap talk or decision useful walk? #ClimateBERT and #CheapTalkIndex are here and prove that words do matter! Julia, Mathias, Markus & Nicolas just published their fantastic study on cheap talk in climate disclosures unpacking why despite increasing adopting of climate disclosures rules the global emissions keep surging unhalted and market pricing mechanisms keep falling short. As companies keep embracing vague and decision-un-useful language little climate action progress and little market efficiency is happening. Latter is increasingly difficult to attain as reporting often is vague, incomplete or based on industry proxies lacking actual company data, and in turn actual company accountability, and thus, hinder investors' ability to apply valuation haircuts. With #ClimateBERT (🚀 give it a try yourself, link in the comment) and the complementary study, cheap talkers in earning calls, disclosures, etc. have been identified... the results are expectedly poor: ❌ From surveyed 1,500 companies (in 2022 alone), every second had a #CheapTalkIndex of more than 50% indicating that every second commitment/ claim is vague, made up of boilerplate language and not decision-useful ❌ Looking at the entire time series, #CheapTalkers were found to support climate initiatives (but lack tangible action plans), exhibit higher emission increases, and face more negative media attention https://lnkd.in/gnmH_hKp #cliamtechange #greenfinance #cliamtedisclosures #issb #genai

Climate reporting standards require organisations to understand and report on their exposure to physical climate risks. The matter is not of compliance, however, but of future-proofing you bottom line. 🌊 Risk assessment: Understanding historic exposure to physical climate risk hazards (like floods, drought, bushfire...) and how this is likely to change considering different climate scenarios (rule of thumb: more frequent & worse) is the crucial first step to credibly map risks against your financial position. ⛱ Commercial climate action: Once you identified your risks, you can prepare a business case for resilience & adaption measures. What does this mean? Understand how weather patterns are projected to change and map this against infrastructure arrangements; e.g. adjust operational principles and processes, explore new crops better suited for the location-specific climate trends, invest in site flood protection, inform future plant locations, ramp-up adoption to changed consumer needs due to heat waves, ... Climate sits at the very core of future business models, emerging consumer trends, supply chain resilience planning, ... Reach out and understand your future exposure today to plan for it in a business-positive manner.

Climate and human rights, a landmark ruling and new UK TPT resources to improve how we plan for a just (climate) transition The European Court of Human Rights condemned Switzerland for violating the European Convention on Human Rights; a successful end to a group of elderly Swiss women's eight-year legal battle. The landmark ruling is a strong signpost that states bear a positive obligation to shield their citizen from climate change and to safeguard their welfare as Catherine Higham put it. Switzerland needs to step-up their game in ensuring an appropriate regulatory framework, incl. the quantification of the country's remaining CO2 budget. This is likely to further accelerate the pressure being applied on companies, both in terms of strengthening their climate response and ensure just & equity, while doing so. Simultaneously, the Transition Plan Taskforce (TPT) issued a wide array of new resources to support companies in the development and refinement of their climate transition planning. What caught my eye, first and foremost, is the advisory paper on Just Transition. With landmark ruling such as the above, the irresistible rise of the just transition (a key policy area at last year's COP28) gains further momentum.

An approach to ESG in Private Equity that resonates: Pictet Asset Management. Private Equity International talked to Nicolas THOMAS and explored their approach to ESG, in particular the identification of potential in environmental deals. In this regard, Pictet 1️⃣ looks through a thematic lens + 2️⃣ top line growth + 3️⃣ solid environmental KPI performance. Environmental themes in consideration, include: ➡ Greenhouse gas emissions reduction ➡ Sustainable consumer goods & agriculture ➡ Pollution control ➡ Circular economy ➡ Technologies supporting the other themes One of their screening tools is an adopted version of the Planetary Boundaries framework originally developed by the Stockholm Resilience Centre; see screenshot below. You can read the entire interview here: https://lnkd.in/gb9A-2yt #ESG #privatequity #sustainablefinance

The systemic climate risk exposure is worsening, and urgent action is needed; most recently highlighted by the European Environment Agency's European Climate Risk Assessment. Besides analysis of sensitivities & vulnerabilities at (multi-)jurisdictional level, understanding how climate stress can endanger future revenue and adversely boost cost basis can give a significant competitive advantage in future-proofing your business ahead of your peers. Climate reporting regimes, like the new SEC rule or ISSB/ ASRS/ CSRD, push companies to assess assets & revenues vulnerable to climate, and how to plan & finance decarbonisation and resilience measures. This undertaking however oftentimes involves the need for technical expertise with climate modelling and scenarios. We are here to help. https://lnkd.in/gPG5yFnN #climaterisk #scenarioanalysis #climatereporting #resilience

War over terminology. Are we missing the bigger picture? In 2020, Larry Fink was among the most prominent backers of the ESG investing wave. Republican campaigns labelling the ‘hoax’ as ‘too woke’ or ‘hostile’ have now materialised in the world’s biggest asset manager’s rebranding to ‘Transition Investing’. ❔ Should we care? Words and terminology is important, we observe this daily with increased focus on greenwashing (and greenhushing). However, if words stand in the way of progress and more resilient investing approaches, and captivate the discussion over meaningless acronyms, it is time to adopt & pivot… to transition,  one might say. ✔ What changes? Does anything REALLY change? I belief, not really. Whether we label something ESG Investing, or supply chain resilience, or future proofing business models; imv, this does not change a thing. At the end of the day, it all boils down to enhancing risk management approaches, and identify value creation opportunities through a lens of future-oriented shifts in societal expectations and commercial & environmental developments. Full stop. https://lnkd.in/gszwvUVj #blackrock #esginvesting

Insurers profitability rode the wave of favourable investment returns, rising interest rates and surging premiums. However, headwinds are picking up. Besides the incoming mandatory climate reporting (ASRS) and its associated challenges, such as target reporting & operating model, a sound transition plan & technical/ data struggles around scenario analysis and Scope 3 measurement; our 2024 key insurance themes offer five key themes and enablers for successful weathering of respective storms: ▶ M&A Activity Expected to Rebound ▶ Business Model Innovation to Accelerate ▶ Adopting ‘Digital by Default’ ▶ Data and Artificial Intelligence ▶ Operational Resilience to Become Centre-Stage Find out more in our paper below and reach out if you fancy a chat. #esg #insurance #2024trends #asrs #climate

As we face accelerated electrification, the resilience of electric power systems emerges as pivotal concern; particularly as extreme weather events pick up in their frequency and magnitude leading to multiple adverse effects within the electric power value chain.   Together with Dynamo, Alvarez & Marsal investigated effective levers and solutions to drive the resilience of the electric power sector; from strategy to execution.   Selected highlights from the complete report (link in comments) include: ▶ Physical climate risk: Every 3 weeks, USD1bn in weather-related damages occur in the US alone; and 64% increase in major power outages in 2011-2021 vs. 2000-2010 ▶ Demand: 50% demand growth in the electric sector by 2050 (fueled by the AI-led hypergrowth, 20% of electric demand in 2050 is expected to come from data centers) and 44% growth in residential battery market in 2020 ▶ Money: 18% increase in average electricity prices in the last 10 years and USD30bn invested by utilities in 2022 for climate adaption and hardening efforts #climateresilience #electrification #climate #ESG #sustainablefinance