United Nations Environment Programme Finance Initiative: Difference between revisions
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The '''United Nations Environment Programme Finance Initiative''' ('''UNEP FI''') is a partnership between the [[United Nations Environment Program]] (UNEP) and the global financial sector to catalyse action across the [[financial system]] to align economies with [[sustainable development]].<ref>{{Cite web |title=UNEP Finance Initiative |url=https://www.genevaenvironmentnetwork.org/environment-geneva/organizations/unep-finance-initiative/ |access-date=2023-05-23 |website=www.genevaenvironmentnetwork.org |language=en-US}}</ref> As the [[United Nations|UN]] partner for the finance sector, they convene financial institutions on a voluntary basis to work together with them, and each other, to find practical solutions to overcome the many sustainability challenges facing the world today. UNEP FI does this by providing practical guidance and tools which support institutions in the finance sector to find ways to reshape their businesses and commit to targets for limiting [[greenhouse gas emissions]], protecting nature, promoting a [[circular economy]] and supporting financial inclusion to address inequality. The solutions developed effectively form a blueprint for others in the finance sector to tackle similar challenges and evolve their businesses along a sustainable pathway. The creation and adoption of such a blueprint also informs policy makers concerned with sustainability issues about what would constitute appropriate regulation for the finance sector at large. Founded in 1992, UNEP FI was the first organisation to pioneer engagement with the finance sector around sustainability. The Finance Initiative was responsible for incubating the [[Principles for Responsible Investment]] and for the development and implementation of UNEP FI's Principles for Responsible Banking and Principles for Sustainable Insurance as well as the UN-convened net-zero alliances. Today, UNEP FI provides sustainability leadership to more than 400 financial institutions, with assets of well over $80 trillion headquartered around the world.{{Infobox United Nations |
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{{Infobox United Nations |
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| image = Emblem of the United Nations.svg |
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| name = United Nations Environment Programme Finance Initiative |
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| image_size = 120px |
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| image = UNEP FI Logo.gif |
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| name = United Nations Environment Programme Finance Initiative |
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| image size = 150px |
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| map = UNEP FI Logo 2021 Colour.png |
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| caption = |
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| map_size = 150px |
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| type = Programme |
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| map_caption = |
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| acronyms = UNEP FI |
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| type = Programme |
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| head = Eric Usher (2015-present) |
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| abbreviation = UNEP FI |
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| status = Active |
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| leader_title = Head |
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| established = 1992 |
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| leader_name = Eric Usher (2015-present) |
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| headquarters = [[Geneva]], [[Switzerland]] |
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| status = Active |
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| website = [http://www.unepfi.org/ www.unepfi.org] |
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| formation = 1992 |
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| parent = |
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| headquarters = [[Geneva]], [[Switzerland]] |
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| footnotes = |
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| website = [http://www.unepfi.org/ www.unepfi.org] |
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}} |
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| parent_organization = |
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The '''United Nations Environment Programme Finance Initiative''' (UNEP FI) is a global partnership established between the [[United Nations Environment Program]] (UNEP) and the financial sector <ref>(http://www.unepfi.org/)</ref>. It was created in 1992, following the [[Earth Summit]] in [[Rio de Janeiro]] <ref>( http://www.unepfi.org/about/background/)</ref>. The UNEP FI consists of 215 members from financial institutions and 41 supporting institutions <ref name=":0">( https://wedocs.unep.org/rest/bitstreams/10620/retrieve )</ref>. These members include [[Bank|banks]], investors and insurance companies <ref name=":0" />. |
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}} |
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UNEP FI seeks to engage the private sector and the global financial sector <ref name=":0" />, as well as encourage the better implementation of sustainability principles at all levels of operations in financial institutions. Their focus has also been to inspire their members to take [[Environmental, social and corporate governance|Environmental, Social, and Governance]] issues into their relationships and trade with their customers. The '''United Nations Environment Programme Finance Initiative''' is known for their help in facilitating and shaping interactions between a wide range of partners <ref name=":0" />. |
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UNEP FI is also a founding member of the [[Sustainable Stock Exchanges Initiative|United Nations Sustainable Stock Exchanges]] (SSE) initiative along with the [[Principles for Responsible Investment]] (PRI), the [[United Nations Conference on Trade and Development]] (UNCTAD), and the [[UN Global Compact]]. |
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==History== |
==History== |
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Founded in 1972 following the landmark UN Conference on the Human Environment, the United Nations Environment Programme (UNEP) was conceived to monitor the state of the environment, inform policy-making with science, and coordinate responses to the world's environmental challenges. Over the years, UNEP has worked closely with industry in developing environmental management strategies. It started working with forward-looking organisations in the financial services sector at the beginning of the 1990s, convinced that the financial sector had a valuable contribution to make in protecting the environment while maintaining the health and profitability of their businesses. |
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In 1991, a group of commercial bankers got together and proposed the idea of a group to help spread awareness about the environmental calendar. In 1992, the '''UNEP Statement by Banks on Environment and Sustainable Development''' was launched in [[New York City|New York]] after the [[Earth Summit]] in [[Rio de Janeiro]], to insure that sustainable development, among other issues, could be improved. This new initiative bring a broad range of financial institutions on board such as commercial and investment banks. |
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=== Launch of the UNEP Finance Initiative === |
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In 1997, this statement was redrafted in order to be more broad in its appeal and was renamed the '''UNEP Statement by Financial Institutions on the Environment and Sustainable Development''' <ref>(http://www.unepfi.org/about/unep-fi-statement/history-of-the-statement/)</ref>.The '''Banking Initiative''' was renamed '''The Financial Institutions Initiative''' (FII). In 1999 it was clear that the FII and the '''Insurance Industry Initiative''' (III) were working closely due to the similarities of the works that they did and in 2003 at the Annual General Meeting, the two groups decided to merge into one single group. This group would be called the '''UNEP Finance Initiative'''. |
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In May 1992, in the run-up to the [[Earth Summit]] in [[Rio de Janeiro]] that year, a small group of banks, including [[Deutsche Bank]], [[HSBC|HSBC Holdings]], [[NatWest|Natwest]], [[Royal Bank of Canada]], and [[Westpac]] developed the UNEP Statement by Banks on the Environment and Sustainable Development, and the Banking Initiative was formed. This Initiative, which operated under the auspices of UNEP, engaged a broad range of financial institutions, including commercial banks,<ref>{{Cite web |date=2023-04-14 |title=Timeline: the major milestones in sustainable finance |url=https://fintechmagazine.com/articles/timeline-the-major-milestones-in-sustainable-finance |access-date=2023-05-23 |website=fintechmagazine.com |language=en}}</ref> investment banks, venture capitalists, asset managers, and multi-lateral development banks and agencies which promoted the integration of environmental considerations into all aspects of the financial sector's operations and services. In 1995, UNEP joined forces with a group of leading insurance and reinsurance companies, including [[General Accident]], Gerling Global Re, [[National and Providence Worsted Mills|National Provident]], [[Storebrand]], [[Mitsui Sumitomo Insurance Group|Sumitomo Marine & Fire]], [[Swiss Re]], as well as pension funds, to launch the UNEP Statement of Environmental Commitment by the Insurance Industry. In this voluntary commitment, signatory companies pledged to achieve a balance of economic development, the welfare of people and a sound environment. |
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=== Building the initiative === |
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Finally in 2010, '''UNEP Statement by Financial Institutions on the Environment and Sustainable Development''' and the '''UNEP Statement of Environmental Commitment''' merged into a single statement called the '''UNEP Statement of Commitment by Financial Institutions on Sustainable Development'''. This statement was finalized in 2011 |
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From 1999 the two groups of banks and insurers began to work together on issues of mutual interest, and in 2003, the two groups merged to form the '''UNEP Finance Initiative'''. Then, in 2012, UNEP FI and a group of insurance companies took the first steps in anchoring sustainability at the heart of their business strategies when they developed the Principles for Sustainable Insurance, the first global framework for the insurance industry to address [[environmental, social, and corporate governance|environmental, social, and governance]] risks and opportunities. The development of the Principles led to the largest collaborative initiative between the UN and the insurance industry—the PSI Initiative. Over 200 organisations worldwide have adopted the four Principles for Sustainable Insurance, including insurers representing more than 25% of world premium volume and USD 14 trillion in assets under management. |
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In 2019, a coalition of 132 banks convened by UNEP FI developed the first global sustainability framework for the banking industry when they launched the Principles for Responsible Banking. The six guiding principles help signatory banks ensure their strategy and practice align with the vision society has set out for its future in the [[Sustainable Development Goals]] and the [[Paris Agreement|Paris Climate Agreement]] and bring purpose, vision and ambition to sustainable finance. Signatories commit to embedding the principles across all business areas, at the strategic, portfolio and transactional levels. With the development of principles for the insurance and banking industry in addition to the Principles for Responsible Investment, sustainability blueprints now exist for all sectors of the finance industry. |
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==Mission Statement== |
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The UNEP FI statement is the backbone of the initiative. It constitutes a list of basic guidelines that should be followed by institutions in order to adhere to sustainability principles. These statements are aspirational, and are therefore followed on a voluntary basis, decreasing accountability to the institution. |
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To fast-track financial institutions' action on decarbonising the global economy, UNEP FI has convened coalitions of actors from across the financial sector – '''investors, banks, and re/insurers.''' 2019 saw the launch of the UN-convened Net-Zero Asset Owner Alliance in partnership with the PRI; in April 2021 UNEP FI launched the Net-Zero Banking Alliance, and the Net-Zero Insurance Alliance was born in July 2021. The member-led alliances unite financial institutions that have committed to achieving net-zero GHG emissions in their portfolios by 2050, in line with the [[Paris Agreement]]; the members collaborate in working groups to jointly develop tools and guidance. |
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Signatories become member of the initiative by paying a nominal fee. The rationale for membership is that the development of sustainable practice in business can increase profits by catalyzing the [[w:Triple_bottom_line|triple bottom line principle]], which acts as an incentive for lending and investors through improved CSR (Caroll, 1999). |
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By 2023, the membership of these alliances had expanded to 86 institutions, collectively managing over USD 9.5 trillion.<ref name=":1" />{{Rp|page=1}} They achieved a reduction in financed [[Greenhouse gas emissions|GHG emissions]] to 213.4 million tons.<ref name=":1">{{Cite web |title=Increasing Climate Ambition, Decreasing Emissions: The third progress report of the Net-Zero Asset Owner Alliance |url=https://www.unepfi.org/industries/investment/increasing-climate-ambition-decreasing-emissions-the-third-progress-report-of-the-net-zero-asset-owner-alliance/ |access-date=2024-04-19 |language=en-GB}}</ref>{{Rp|page=15}} Additionally, 69 members defined new intermediate [[Climate target|climate targets]], while 67 set ambitious sub-portfolio targets aiming for significant CO2e reductions between 22–32% by 2025 and 40–60% by 2030.<ref name=":1" />{{Rp|page=9-40}} The alliances also directed substantial investments totaling USD 380.6 billion towards climate solutions, particularly in the building and energy sectors.<ref name=":1" />{{Rp|page=xii}} |
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The UNEP FI mission statement is "''to bring about systematic change in finance to support a sustainable world, and is highlighted in its motto, changing finance, financing change''" <ref>(http://www.unepfi.org/)</ref>. |
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=== PRI === |
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The United Nations Environment Programme Finance Initiative works to sustain and improve the following: |
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For many years, UNEP FI's membership comprised investors and asset managers who worked with UNEP FI on influential initiatives such as the Property Working Group, as well as publishing landmark reports including the "Freshfields Report" regarded as the first major step in mainstreaming responsible investment. |
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To accelerate leadership in responsible investment and better serve the investment community and the financial industry at large, in 2021, UNEP FI and its sister organisation the [[Principles for Responsible Investment]] established a joint initiative, the Investment Leadership Programme (ILP), and merged UNEP FI's investment membership with PRI's. The platform brings together small groups of leading responsible investors to work on initiatives that are considered to be leading best practices. Investors continue to have access to ILP leadership projects and initiatives through their membership in the PRI. Through this collaborative programme, leading investors continue to engage with UNEP FI's network of banks and insurers and continue to work with others to catalyse change across the entire finance industry. |
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* Banking |
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To further mobilise the financial community to support a sustainable, resilient and inclusive economy and ensure that sustainability is considered at the highest level of corporations, in 2021, UNEP FI formed the Leadership Council. The body comprises CEOs and Chairpersons of banks and insurers currently represented on one of the three elected UNEP FI governance bodies; the Global Steering Committee, the Board of the Principles for Responsible Banking or the Board of the Principles for Sustainable Insurance. Chaired by the Executive Director of the UN Environment Programme, the UNEP FI Leadership Council meets annually to provide vision and strategic direction to UNEP FI in orienting its role and that of the UN, in shaping, mainstreaming and deepening sustainability integration across the industry. |
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* Insurance |
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==Mission statement== |
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* Climate Change |
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UNEP FI's mission is to "help create a financial sector that serves people and planet while delivering positive impacts" and to "inspire, inform and enable financial institutions to improve people's quality of life without compromising that of future generations". |
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To do so, the Initiative works with members from the banking and insurance industries,<ref>{{Cite web |title=United Nations Environment Programme Finance Initiative - UNEP FI {{!}} Genève internationale |url=https://www.geneve-int.ch/whoswho/united-nations-environment-programme-finance-initiative-unep-fi |access-date=2023-05-23 |website=www.geneve-int.ch}}</ref> technical experts and key stakeholders to convene collective action, facilitate shared learning and co-develop practical resources to equip financial institutions with the knowledge and expertise to make their strategies and operations more sustainable. |
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* Ecosystems |
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The Initiative facilitates collaborative projects to develop methodologies and tools, encourage harmonization, promote advances in good practice, and support leadership to accelerate growth in the quantity and quality of sustainable financial institutions. UNEP FI aims to create an effective network for sharing knowledge and to amplify the collective voice of the finance sector in policy debate, engaging policymakers, regulators and supervisors on the role of the financial sector in contributing to sustainable development. |
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* Positive Impact |
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* Energy Efficiency |
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* Property |
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* Social Issues |
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* Regions |
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==Organisation== |
==Organisation== |
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UNEP FI is a Unit within the United Nations Environment Programme's Resources and Markets Branch, itself a Branch of one of the UNEP's eight core divisions, the Industry and Economy Division.<ref name=":0">{{cite web | url=https://www.unepfi.org/about/structure/ | title=Structure – United Nations Environment – Finance Initiative }}</ref> UNEP FI's daily activities are run by a Secretariat based in [[Geneva, Switzerland]], led by Eric Usher since 2015.<ref>{{Cite web |title=UNEP FI Secretariat |url=http://www.unepfi.org/about/structure/secretariat/}}</ref> |
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UNEP FI's main governance bodies are the Annual General Meeting, the Initiative's ultimate decision-making forum, the Global Steering Committee overseeing the strategic orientation of the overall Initiative, the three Industry Committees (Banking, Insurance and Investment), the Thematic Advisory Groups and the Regional Advisory Groups. |
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The current secretariat is Eric Usher, who was appointed as officer in charge in 2015 <ref>{{Cite web|url=http://www.unepfi.org/about/structure/secretariat/|title=UNEP FI Secretariat|last=|first=|date=|website=|archive-url=|archive-date=|dead-url=|access-date=}}</ref>. Usher has experience in the sustainable energy and finance sectors. |
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==Global |
==Global and Regional Roundtables== |
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UNEP FI holds regular agenda-setting Global and Regional Roundtables to bring together partners and other stakeholders to build momentum to advance sustainable finance market practice and provide clear signals from the financial sector to policymakers on the importance of integrating Environmental, Social and Governance (ESG) issues and sustainability impacts into financial decision-making. The first Global Roundtable (GRT) took place in 1994 in Geneva, Switzerland. Global Roundtables have since then crossed the world taking place every two years in a different part of the world and since 2020 virtually as well. |
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In 1994, the first Global Roundtable (GRT), now an event that takes place every two years, took place in [[Geneva, Switzerland]]. Global Roundtables have since then crossed the world from [[Washington, DC]], to [[Cape Town]], [[Rio de Janeiro]] and [[Tokyo]]. Each event takes place in a different city around the world. |
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Regional roundtables take place every other year, providing an opportunity for members and actors in the [[sustainable finance]] community to come together locally to discuss the latest trends and innovations and share good practices. |
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This event brings together hundreds of leaders in the financial sector, as well as the government and the United Nations. The UNEP FI holds this Global Roundtable to kick off a conversation between the groups present on issues such as sustainable finance, sustainable development and the challenges of a sustainable market. |
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{| class="wikitable" |
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! Year |
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!!! Location |
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| 1994 |
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||| Geneva |
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| 1995 |
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||| London |
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|- |
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| 1996 |
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||| London |
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|- |
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| 1997 |
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||| New York |
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|- |
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| 1997 |
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||| Tokyo |
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|- |
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| 1998 |
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||| Cambridge |
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|- |
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| 1999 |
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||| Chicago |
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|- |
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| 1999 |
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||| Oslo |
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|- |
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| 2000 |
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||| Frankfurt |
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|- |
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| 2002 |
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||| Rio |
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|- |
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| 2003 |
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||| Tokyo |
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|- |
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| 2005 |
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||| New York |
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|- |
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| 2007 |
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||| Melbourne |
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|- |
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| 2009 |
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||| Cape Town |
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|- |
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| 2011 |
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||| Washington |
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|- |
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|2013 |
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| |
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|Beijing |
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|- |
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|2016 |
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| |
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|Dubai |
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|- |
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|2018 |
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| |
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|Paris |
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|} |
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The next Global Roundtable will be hosted in Hong Kong in 2020. <ref>{{Cite web|url=https://barretthonors.asu.edu/news-events/upcoming-events/global-roundtable-road-hong-kong-2020|title=|last=|first=|date=|website=|archive-url=|archive-date=|dead-url=|access-date=}}</ref> |
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==Notable contributions== |
==Notable contributions== |
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UNEP FI has been responsible for authoring or editing a number of seminal publications, among which are: |
UNEP FI has been responsible for authoring or editing a number of seminal publications, among which are: |
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*''A Legal Framework for the Integration of Environmental, Social and Governance Issues into Institutional Investment |
* ''A Legal Framework for the Integration of Environmental, Social and Governance Issues into Institutional Investment (also known as the 'Freshfields Report, 2005) [http://www.unepfi.org/fileadmin/documents/freshfields_legal_resp_20051123.pdf]'' |
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*'' |
* ''Demystifying Responsible Investment Performance: A review of key academic and broker research on ESG factors (2007) [http://www.unepfi.org/fileadmin/documents/Demystifying_Responsible_Investment_Performance_01.pdf]'' |
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*'' |
* ''Fiduciary Responsibility: Legal and practical aspects of integrating environmental, social and governance issues into institutional investment (2009) [http://www.unepfi.org/fileadmin/documents/fiduciaryII.pdf]'' |
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*''The |
* ''The Global state of Sustainable Insurance: Understanding and integrating environmental, social and governance factors in insurance (2009) [http://www.unepfi.org/fileadmin/documents/global-state-of-sustainable-insurance_01.pdf]'' |
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*'' |
* ''The Materiality of Climate Change: How Finance Copes with the Ticking Clock (2009) [http://www.unepfi.org/fileadmin/documents/materiality3.pdf]'' |
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* ''Why environmental externalities matter to institutional investors (2011) [https://www.unepfi.org/fileadmin/documents/universal_ownership_full.pdf]'' |
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* ''Guide to Banking and Sustainability (2011) (2016) [https://www.unepfi.org/publications/banking-publications/guide-to-banking-and-sustainability-2/]'' |
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* ''Principles for Sustainable Insurance (2012) [https://www.unepfi.org/fileadmin/documents/PSI_document-en.pdf]'' |
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* ''Sustainability Metrics (2014) [https://www.unepfi.org/fileadmin/publications/investment/UNEPFI_SustainabilityMetrics_Flyer_Web.pdf]'' |
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* ''Principles for Positive Impact Finance (2017) [https://www.unepfi.org/wordpress/wp-content/uploads/2017/01/POSITIVE-IMPACT-PRINCIPLES-AW-WEB.pdf]'' |
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* ''ENCORE tool (2018) [https://encore.naturalcapital.finance/en]'' |
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* ''Underwriting environmental, social and governance risks in non-life insurance business (2018) [https://www.unepfi.org/psi/wp-content/uploads/2019/02/PSI-Guidance-for-non-life-insurance-underwriting.pdf]'' |
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* ''Principles for Responsible Banking (2019) [https://unepfi.org/industries/banking/principles-for-responsible-banking/]'' |
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* ''Fiduciary Duty in the 21st century (2019) [https://unepfi.org/industries/investment/fiduciary-duty-in-the-21st-century-final-report/]'' |
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* ''Financing circularity (2020) [https://unepfi.org/publications/financing-circularity/]'' |
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* ''Testing the application of the EU taxonomy to core banking products (2021) [https://unepfi.org/industries/banking/eu-taxonomy-testing-core-banking-products/]'' |
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* ''Insuring the climate transition: Enhancing the insurance industry's assessment of climate change futures (2021) [https://unepfi.org/industries/insurance/insuring-the-climate-transition/]'' |
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* ''The Climate Risk Landscape: Mapping Climate-related Financial Risk Assessment Methodologies [https://unepfi.org/industries/banking/the-climate-risk-landscape/]'' |
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* ''Turning the Tide: How to Finance a Sustainable Ocean Recovery (2021) [https://unepfi.org/publications/turning-the-tide/]'' |
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* ''Guidelines for Climate Target Setting for Banks (2021) [https://unepfi.org/industries/banking/guidelines-for-climate-target-setting-for-banks/]'' |
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* ''A Legal Framework for Impact: sustainability impact in investor decision-making (2021) [https://unepfi.org/industries/investment/a-legal-framework-for-impact-sustainability-impact-in-investor-decision-making/]'' |
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* ''Recommendations for Credible Net-Zero Commitments from Financial Institutions (2021) [https://www.unepfi.org/publications/recommendations-for-credible-net-zero-commitments-from-financial-institutions/]'' |
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==References== |
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<references /> |
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==External links== |
==External links== |
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{{Portal bar| |
{{Portal bar|Politics|Environment|Business and economics}} |
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[[Category:United Nations Environment Programme]] |
[[Category:United Nations Environment Programme|Finance Initiative]] |
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Latest revision as of 19:57, 18 December 2024
The United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between the United Nations Environment Program (UNEP) and the global financial sector to catalyse action across the financial system to align economies with sustainable development.[1] As the UN partner for the finance sector, they convene financial institutions on a voluntary basis to work together with them, and each other, to find practical solutions to overcome the many sustainability challenges facing the world today. UNEP FI does this by providing practical guidance and tools which support institutions in the finance sector to find ways to reshape their businesses and commit to targets for limiting greenhouse gas emissions, protecting nature, promoting a circular economy and supporting financial inclusion to address inequality. The solutions developed effectively form a blueprint for others in the finance sector to tackle similar challenges and evolve their businesses along a sustainable pathway. The creation and adoption of such a blueprint also informs policy makers concerned with sustainability issues about what would constitute appropriate regulation for the finance sector at large. Founded in 1992, UNEP FI was the first organisation to pioneer engagement with the finance sector around sustainability. The Finance Initiative was responsible for incubating the Principles for Responsible Investment and for the development and implementation of UNEP FI's Principles for Responsible Banking and Principles for Sustainable Insurance as well as the UN-convened net-zero alliances. Today, UNEP FI provides sustainability leadership to more than 400 financial institutions, with assets of well over $80 trillion headquartered around the world.
 | |
 | |
| Abbreviation | UNEP FI |
|---|---|
| Formation | 1992 |
| Type | Programme |
| Legal status | Active |
| Headquarters | Geneva, Switzerland |
Head | Eric Usher (2015-present) |
| Website | www.unepfi.org |
History
[edit]Founded in 1972 following the landmark UN Conference on the Human Environment, the United Nations Environment Programme (UNEP) was conceived to monitor the state of the environment, inform policy-making with science, and coordinate responses to the world's environmental challenges. Over the years, UNEP has worked closely with industry in developing environmental management strategies. It started working with forward-looking organisations in the financial services sector at the beginning of the 1990s, convinced that the financial sector had a valuable contribution to make in protecting the environment while maintaining the health and profitability of their businesses.
Launch of the UNEP Finance Initiative
[edit]In May 1992, in the run-up to the Earth Summit in Rio de Janeiro that year, a small group of banks, including Deutsche Bank, HSBC Holdings, Natwest, Royal Bank of Canada, and Westpac developed the UNEP Statement by Banks on the Environment and Sustainable Development, and the Banking Initiative was formed. This Initiative, which operated under the auspices of UNEP, engaged a broad range of financial institutions, including commercial banks,[2] investment banks, venture capitalists, asset managers, and multi-lateral development banks and agencies which promoted the integration of environmental considerations into all aspects of the financial sector's operations and services. In 1995, UNEP joined forces with a group of leading insurance and reinsurance companies, including General Accident, Gerling Global Re, National Provident, Storebrand, Sumitomo Marine & Fire, Swiss Re, as well as pension funds, to launch the UNEP Statement of Environmental Commitment by the Insurance Industry. In this voluntary commitment, signatory companies pledged to achieve a balance of economic development, the welfare of people and a sound environment.
Building the initiative
[edit]From 1999 the two groups of banks and insurers began to work together on issues of mutual interest, and in 2003, the two groups merged to form the UNEP Finance Initiative. Then, in 2012, UNEP FI and a group of insurance companies took the first steps in anchoring sustainability at the heart of their business strategies when they developed the Principles for Sustainable Insurance, the first global framework for the insurance industry to address environmental, social, and governance risks and opportunities. The development of the Principles led to the largest collaborative initiative between the UN and the insurance industry—the PSI Initiative. Over 200 organisations worldwide have adopted the four Principles for Sustainable Insurance, including insurers representing more than 25% of world premium volume and USD 14 trillion in assets under management.
In 2019, a coalition of 132 banks convened by UNEP FI developed the first global sustainability framework for the banking industry when they launched the Principles for Responsible Banking. The six guiding principles help signatory banks ensure their strategy and practice align with the vision society has set out for its future in the Sustainable Development Goals and the Paris Climate Agreement and bring purpose, vision and ambition to sustainable finance. Signatories commit to embedding the principles across all business areas, at the strategic, portfolio and transactional levels. With the development of principles for the insurance and banking industry in addition to the Principles for Responsible Investment, sustainability blueprints now exist for all sectors of the finance industry.
To fast-track financial institutions' action on decarbonising the global economy, UNEP FI has convened coalitions of actors from across the financial sector – investors, banks, and re/insurers. 2019 saw the launch of the UN-convened Net-Zero Asset Owner Alliance in partnership with the PRI; in April 2021 UNEP FI launched the Net-Zero Banking Alliance, and the Net-Zero Insurance Alliance was born in July 2021. The member-led alliances unite financial institutions that have committed to achieving net-zero GHG emissions in their portfolios by 2050, in line with the Paris Agreement; the members collaborate in working groups to jointly develop tools and guidance.
By 2023, the membership of these alliances had expanded to 86 institutions, collectively managing over USD 9.5 trillion.[3]: 1 They achieved a reduction in financed GHG emissions to 213.4 million tons.[3]: 15 Additionally, 69 members defined new intermediate climate targets, while 67 set ambitious sub-portfolio targets aiming for significant CO2e reductions between 22–32% by 2025 and 40–60% by 2030.[3]: 9-40 The alliances also directed substantial investments totaling USD 380.6 billion towards climate solutions, particularly in the building and energy sectors.[3]: xii
PRI
[edit]For many years, UNEP FI's membership comprised investors and asset managers who worked with UNEP FI on influential initiatives such as the Property Working Group, as well as publishing landmark reports including the "Freshfields Report" regarded as the first major step in mainstreaming responsible investment.
To accelerate leadership in responsible investment and better serve the investment community and the financial industry at large, in 2021, UNEP FI and its sister organisation the Principles for Responsible Investment established a joint initiative, the Investment Leadership Programme (ILP), and merged UNEP FI's investment membership with PRI's. The platform brings together small groups of leading responsible investors to work on initiatives that are considered to be leading best practices. Investors continue to have access to ILP leadership projects and initiatives through their membership in the PRI. Through this collaborative programme, leading investors continue to engage with UNEP FI's network of banks and insurers and continue to work with others to catalyse change across the entire finance industry.
To further mobilise the financial community to support a sustainable, resilient and inclusive economy and ensure that sustainability is considered at the highest level of corporations, in 2021, UNEP FI formed the Leadership Council. The body comprises CEOs and Chairpersons of banks and insurers currently represented on one of the three elected UNEP FI governance bodies; the Global Steering Committee, the Board of the Principles for Responsible Banking or the Board of the Principles for Sustainable Insurance. Chaired by the Executive Director of the UN Environment Programme, the UNEP FI Leadership Council meets annually to provide vision and strategic direction to UNEP FI in orienting its role and that of the UN, in shaping, mainstreaming and deepening sustainability integration across the industry.
Mission statement
[edit]UNEP FI's mission is to "help create a financial sector that serves people and planet while delivering positive impacts" and to "inspire, inform and enable financial institutions to improve people's quality of life without compromising that of future generations".
To do so, the Initiative works with members from the banking and insurance industries,[4] technical experts and key stakeholders to convene collective action, facilitate shared learning and co-develop practical resources to equip financial institutions with the knowledge and expertise to make their strategies and operations more sustainable.
The Initiative facilitates collaborative projects to develop methodologies and tools, encourage harmonization, promote advances in good practice, and support leadership to accelerate growth in the quantity and quality of sustainable financial institutions. UNEP FI aims to create an effective network for sharing knowledge and to amplify the collective voice of the finance sector in policy debate, engaging policymakers, regulators and supervisors on the role of the financial sector in contributing to sustainable development.
Organisation
[edit]UNEP FI is a Unit within the United Nations Environment Programme's Resources and Markets Branch, itself a Branch of one of the UNEP's eight core divisions, the Industry and Economy Division.[5] UNEP FI's daily activities are run by a Secretariat based in Geneva, Switzerland, led by Eric Usher since 2015.[6]
UNEP FI's main governance bodies are the Annual General Meeting, the Initiative's ultimate decision-making forum, the Global Steering Committee overseeing the strategic orientation of the overall Initiative, the three Industry Committees (Banking, Insurance and Investment), the Thematic Advisory Groups and the Regional Advisory Groups.
Global and Regional Roundtables
[edit]UNEP FI holds regular agenda-setting Global and Regional Roundtables to bring together partners and other stakeholders to build momentum to advance sustainable finance market practice and provide clear signals from the financial sector to policymakers on the importance of integrating Environmental, Social and Governance (ESG) issues and sustainability impacts into financial decision-making. The first Global Roundtable (GRT) took place in 1994 in Geneva, Switzerland. Global Roundtables have since then crossed the world taking place every two years in a different part of the world and since 2020 virtually as well.
Regional roundtables take place every other year, providing an opportunity for members and actors in the sustainable finance community to come together locally to discuss the latest trends and innovations and share good practices.
Notable contributions
[edit]UNEP FI has been responsible for authoring or editing a number of seminal publications, among which are:
- A Legal Framework for the Integration of Environmental, Social and Governance Issues into Institutional Investment (also known as the 'Freshfields Report, 2005) [1]
- Demystifying Responsible Investment Performance: A review of key academic and broker research on ESG factors (2007) [2]
- Fiduciary Responsibility: Legal and practical aspects of integrating environmental, social and governance issues into institutional investment (2009) [3]
- The Global state of Sustainable Insurance: Understanding and integrating environmental, social and governance factors in insurance (2009) [4]
- The Materiality of Climate Change: How Finance Copes with the Ticking Clock (2009) [5]
- Why environmental externalities matter to institutional investors (2011) [6]
- Guide to Banking and Sustainability (2011) (2016) [7]
- Principles for Sustainable Insurance (2012) [8]
- Sustainability Metrics (2014) [9]
- Principles for Positive Impact Finance (2017) [10]
- ENCORE tool (2018) [11]
- Underwriting environmental, social and governance risks in non-life insurance business (2018) [12]
- Principles for Responsible Banking (2019) [13]
- Fiduciary Duty in the 21st century (2019) [14]
- Financing circularity (2020) [15]
- Testing the application of the EU taxonomy to core banking products (2021) [16]
- Insuring the climate transition: Enhancing the insurance industry's assessment of climate change futures (2021) [17]
- The Climate Risk Landscape: Mapping Climate-related Financial Risk Assessment Methodologies [18]
- Turning the Tide: How to Finance a Sustainable Ocean Recovery (2021) [19]
- Guidelines for Climate Target Setting for Banks (2021) [20]
- A Legal Framework for Impact: sustainability impact in investor decision-making (2021) [21]
- Recommendations for Credible Net-Zero Commitments from Financial Institutions (2021) [22]
References
[edit]- ^ "UNEP Finance Initiative". www.genevaenvironmentnetwork.org. Retrieved 2023-05-23.
- ^ "Timeline: the major milestones in sustainable finance". fintechmagazine.com. 2023-04-14. Retrieved 2023-05-23.
- ^ a b c d "Increasing Climate Ambition, Decreasing Emissions: The third progress report of the Net-Zero Asset Owner Alliance". Retrieved 2024-04-19.
- ^ "United Nations Environment Programme Finance Initiative - UNEP FI | Genève internationale". www.geneve-int.ch. Retrieved 2023-05-23.
- ^ "Structure – United Nations Environment – Finance Initiative".
- ^ "UNEP FI Secretariat".
