Both investors and the companies they invest in are increasingly aware of the risks and opportunities associated with climate change. As a result, there are a growing number of initiatives and collaborations, led by both the financial community as well as business, focused on understanding how the activities of both the investment community and corporations may contribute to climate change and the associated risks. Some of the resources most useful to investors are provided in the following pages.
Asian Development Bank (ADB)
http://www.adb.org/REACH/default.asp
ADB's Technical Assistance program on climate change includes capacity building activities on generic climate change issues and Clean Development Mechanism (CDM) with emphasis on renewable energy and energy efficiency, carbon sequestration, and adaptation.
ADB is currently engaged in two programs, the Renewable Energy, Energy Efficiency and Climate Change (REACH) Program and the Energy Efficiency Initiative.
The REACH program, established in 2002, supports the application of renewable energy, energy efficiency, and greenhouse gas abatement technologies in ADB's developing member countries and is funded by the governments of Canada, Denmark, Finland, and the Netherlands. REACH has already successfully carried out work in capacity building, project identification, and project due-diligence across 18 countries.
The Energy Efficiency Initiative, meanwhile, will boost investments and activities in energy efficiency - both from the supply and energy use sides - and also renewable energy.
ADB recently announced its Carbon Market Special Initiative that is looking into the merits of establishing a dedicated carbon co-financing facility. This facility, unlike other emission credit procurement vehicles currently available, would provide up-front funds to project sponsors.
Climate Business Network
http://www.climatebusiness.net/index.php
The Climate Business Network has been established to provide a forum through which the 'community' surrounding the Climate Convention can examine and take advantage of the emerging business opportunities primarily provided by the 'project based mechanisms' (the Clean Development Mechanism [CDM] & Joint Implementation [JI]) of the Kyoto Protocol). It provides following facilities:
| 1. |
A product development and matchmaking service as a first step towards developing 'climate project' partnerships, including through the CDM Project Bazaar & the CDM Investment Newsletter; |
| 2. |
A large international network of experts and institutions that have the various skills that will be needed at all stages of the business/project cycle as well as host country-based partners required for local assistance; |
| 3. |
A state-of-the-art knowledge management system that will provide access to the data and information that both hosts and investors need for conducting their 'climate business'; and |
| 4. |
High-speed, high-bandwidth, and secure Web-conferencing facilities that are available for use by project, business and policy negotiating groups. |
Climate Investment Network for Carbon Sequestration (CINCS)
http://www.cincs.org/index.html
CINCS addresses two fundamental global issues: alleviating poverty through social enterprise support in developing countries and reducing greenhouse gases to address climate change. It accomplishes its mission by linking developing-country community-based carbon sequestration projects to international mainstream carbon markets, to deliver social, environmental, and economic benefits to carbon buyers and sellers.
Its principal objective is to deliver cost-effective greenhouse gas emission reductions, while promoting poverty alleviation and biodiversity conservation.
Institutional Investors Group on Climate Change
http://www.iigcc.org
The Institutional Investors Group on Climate Change (IIGCC) is a forum for collaboration between pension funds and other institutional investors on issues related to climate change. IIGCC seeks to:
- Promote better understanding of the implications of climate change amongst IIGCC members and other institutional investors
- Encourage companies and markets in which IIGCC members invest to address any material risks and opportunities to their businesses associated with climate change and a shift to a lower carbon economy
IIGCC seeks to occupy the overlap between "interested investor" (aware of the implications of climate change) and "responsible investor" (acting to manage the risks climate change poses its investments). IIGCC does not seek to become a "campaigning investor" (advocating immediate or otherwise radical changes in energy and economic activity).
International Finance Corporation (IFC)
http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/p_2005SustReport_15/$FILE/ClimateChange.pdf
IFC is taking a leading role in developing new business models that stimulate private sector investment in sustainable energy and at the same time support sustainable economic development in emerging markets. The IFC helps finance clean energy projects that contribute to reducing rising greenhouse gas emissions in developing countries. This is done primarily with concessional resources from the Global Environment Facility (GEF), the financial mechanism for the climate convention. In recent years, IFC has been actively seeking to finance a greater number of energy efficiency (EE) projects and to develop special initiatives to accelerate the market penetration of these technologies.
IFC is also actively seeking to participate in the financing of energy projects based on the use of renewable energy resources. Efforts focus on renewable energy technologies such as: run-of-the-river and conventional hydro, geothermal, biomass, wind, and solar (photovoltaic and solar thermal).
IFC has established Carbon Finance Facilities. The Facilities are arrangements under which IFC will purchase carbon credits for the benefit of the Government of the Netherlands under the international emission reduction transfer rules of the Kyoto Protocol. IFC presently has about $100 million under management in two facilities to purchase credits: (i) the IFC-Netherlands Carbon Facility (INCaF) operating under the rules of the Clean Development Mechanism (CDM); and (ii) the Netherlands European Carbon Facility (NECaF) operating under the rules of the Joint Implementation (JI) mechanism and managed jointly with IBRD. Payments for carbon credits purchased will be made to eligible projects in emerging markets and will provide them with additional revenue. The Government of the Netherlands will use the purchased credits to meet its GHG reduction obligations under the Kyoto Protocol. The credits will be purchased and paid for regardless of whether or not the Kyoto Protocol is in force.
Investor Network on Climate Risk
http://www.incr.com
The Investor Network on Climate Risk (INCR) was launched by 10 investor leaders on November 21, 2003 at the Institutional Investor Summit on Climate Risk at the United Nations in New York City. The purpose of INCR is to promote better understanding of the risks of climate change among institutional investors. INCR encourages companies in which its members invest to address any material risks and opportunities to their businesses associated with climate change and a shift to a lower carbon economy. Climate risk includes financial, fiduciary and liability risk ensuing from climate change.
Point Carbon
http://www.pointcarbon.com/About%20us/category371.html
Point Carbon is a provider of independent analysis, forecasting, market intelligence and news for the power, gas and carbon emissions markets. Its competencies include international and regional climate policy; mathematical and economic modelling; forecasting methodologies; methods for expert evaluation and energy industries analysis.
The
Carbon Disclosure Project
http://www.cdproject.net
The Carbon Disclosure Project (CDP) provides a secretariat for the world's largest
institutional investor collaboration on the business implications of climate
change. CDP represents a process whereby many institutional investors collectively
sign a single global request for disclosure of information on Greenhouse Gas
Emissions. CDP has historically sent this request to the FT500 largest companies
in the world. In 2006 this was expanded to include 1900 companies.
UNEPFI Sustainable Energy Finance Initiative
http://www.unepfi.org
The United Nations Environment Programme Finance Initiative (UNEP FI) is a unique
global partnership between the United Nations Environment Programme (UNEP) and
the private financial sector. UNEP is working to create the policy and economic
framework where sustainable energy can increasingly meet the global energy challenge.
Changing attitudes and helping mainstream financiers to consider sustainable
energy investments are key components of the energy work within UNEP and the
starting point for the Sustainable Energy Finance Initiative (SEFI), a partnership
between UNEP FI, UNEP Energy, and the Basel Agency for Sustainable Energy (BASE).
SEFI aims to foster a sustainable energy finance community that brings together
financiers, engages them to do jointly what they may have been reluctant or
unable to do individually, and catalyses public-private alliances that together
share costs and lower barriers to investment.
Through its Climate Change Working Group, UNEP FI's work is focused on carbon finance, national and international policy and regulation debates, and renewable energy.
Publications include:
- CEO Briefing on the Future of Climate Change Policy: The Financial Sector Perspective, 2005
- CEO Briefing on Finance for Carbon Solutions, 2004
- CEO Briefing on Renewable Energy, 2004
- CEO Briefing on Emissions Trading, 2003
- Sustainable Energy Finance Initiative (SEFI), 2003
- Financing Sustainable Energy Directory: A Listing of Lenders and Investors, 2002
- CEO Briefing on Climate Change Published, 2002
- Climate Change and the Financial Services Industry - Module 1: Threats and Opportunities, 2002
- The GHG Indicator: UNEP Guidelines for Calculating Greenhouse Gas Emissions for Businesses and Non-Commercial Organisations, 2000
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