SUSTAINABLE FINANCE & CLIMATE CHANGE. EFR case studies... · 2. Give climate-resilience advice to developing countries when building new infrastructure. † SDG 13 – Climate:Group

FEBRUARY 2017

SUSTAINABLE FINANCE

& CLIMATE CHANGE

EFR case studies

Showing commitment to the Paris Agreement

SUSTAINABLE FINANCE

& CLIMATE CHANGE

EFR case studies

Showing commitment to the Paris Agreement

5

The financial sector fully recognises the importance of tackling climate change and is aiming to play a rolein supporting Europe’s transition to a low carbon economy.

As EU policy-makers turn to deliver on their commitments to the Paris Agreement, including by creating asustainable finance strategy, this paper shows the financial sector’s commitment and gives concrete examplesof what we are doing as a sector already. We look forward to working with EU policy-makers to deliver onthese important agreements to the benefit of European citizens.

Following the EFR statement in support of a strong, ambitious response to climate change before COP21 inNovember 2015 and the EFR call for a strong, ambitious implementation of the Paris Agreement in October2016, we provide in this brochure EFR case studies showing why EFR companies care about climate change,their commitment and how they support the Sustainable Development Goals.

Our commitments from the 2015 statement

• We commit to putting more focus on understanding, managing and reducing carbon asset risks. We will continue to improve our implementation of strong measures for assessing and reducingsustainability risks of our own transactions.

• We commit to supporting our customers in their transition to a low carbon future including financingto help them channel capital into low carbon solutions and make more efficient use of energy and resources.

• We commit to examine how the financial sector can support progress towards the United Nations’newly agreed Sustainable Development Goals, which have the potential to significantly mitigate theimpact of climate change.

• We commit to work through the global associations such as the Institute of InternationalFinance (IIF) and the B20 to consider at a global level how sustainability and climateconsiderations can further be incorporated at the core of financial institutions’ businessactivities, examining the findings of the UNEP Inquiry for a Sustainable Financial System andacting as a proactive partner to international policy-makers.

The European Financial Services Round Table (EFR) was formed in 2001. The Members of EFR are Chairmenand Chief Executive Officers of international banks or insurers with headquarters in Europe. EFR Membersbelieve that a fully integrated EU financial market, a Single Market with consistent rules and requirements,combined with a strong, stable and competitive European financial services industry will lead to increasedchoice and better value for all users of financial services across the Member States of the European Union.An open and integrated market reflecting the diversity of banking and insurance business models will supportinvestment and growth, expanding the overall soundness and competitiveness of the European economy.

A. INTRODUCTION

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Aegon N.V.

Why we care about climate change

It is now widely accepted that climate change is happening and poses long-term financial risks on companieswe invest in. While Aegon is committed to take action and identify potential climate related risks andopportunities, currently there is significant uncertainty around what actions will be taken to combat climatechange and how the energy transition will play out over the next several years. This, coupled with thelimitations of current methodologies to measure risk makes it very challenging to accurately identify andmeasure climate-related investment risk. Nevertheless, Aegon is dedicated to follow relevant developments,assess how the companies and industries we invest in will be impacted, and encourage the transition to alow-carbon economy.

Our commitments

Aegon commits to:

• Integrate climate change into investment process: evaluated carbon-footprinting methodologiesin 2014 and 2015, and organized a project supported by South Pole and Carbon Tracker to analyzeclimate-related investment risk in 2016. Findings expected early 2017.

• Active ownership: engaging with a selected number of holding companies to address issues suchas climate disclosure, adaptation, and risk management.

• Divestment: divesting holdings in companies with more than 30% revenue from coal mining.

• Encourage government action: supporting signed letters urging the G20 to follow through onthe Paris Agreement commitments. Aegon also joined a coalition urging the Dutch governmentto establish new climate laws.

• Green opportunities: investing, and continuing to look for investment opportunities in greentechnology and infrastructure. Aegon is launching a project to investigate these opportunities inmore detail early 2017.

How we support the Sustainable Development Goals (SDGs)

Aegon supports the SDG’s by investing over EUR 8 billion in environmentally and socially focused areas, suchas affordable housing, renewable energy, and microfinance. As an example of these initiatives, in 2016 Aegoninvested 45 million Euro in a 288 MW offshore wind farm in Germany.

Aegon has also been involved in a six-month consortium of Dutch financial institutions supported by theDutch government and Central Bank. In their report “Building Highways to SDG Investing”, the group setsout recommendations that will help accelerate and scale investments in SDGs.

B. EFR COMPANY’S CASE STUDIES SHOWING COMMITMENT TO THE PARIS AGREEMENT

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Aviva


There is no greater collective risk we face today than tackling climate change. This is not at odds with businessor investment, but a business imperative. As an investor, research we commissioned from the EconomistIntelligence Unit showed that, from the perspective of an investor, an estimated $13.8 trillion dollars ofglobal assets, discounted to present day value, are at risk if global temperatures rise by an average of 6°C. As an insurer, more than 4 degrees would mean insurers wouldn’t be able to cover the risk and the ParisAgreement provides us with hope that many of the extreme weather-related catastrophes that are associatedwith a changing climate will not come to pass.

Our commitments

Our 2015 strategic response to climate change commits us to:

• Integrating climate risk into our investment considerations – our system covers over 90% ofour global Assets Under Management (AUM).

• Investment in lower carbon infrastructure – we target £500 million annual investment for thenext five years

• Supporting strong policy action on climate change – we take part in the FSB Task Force onClimate-related Financial Disclosures and published an EU toolkit with sustainable finance ideas.

• Active stewardship on climate risk – we engage with companies to achieve climate-resilientbusiness strategies and publish records online.

• Divesting where necessary.

How we support the Sustainable Development Goals (SDGs)

We strongly support the SDGs. During their launch in 2015, our CEO Mark Wilson addressed the 70th

UN General Assembly plenary session on the role of businesses in achieving the SDGs. On 21 September 2016, Mr Wilson, speaking at a UN President of the General Assembly meeting in New York, called for businessesand Governments to work in partnership to successfully deliver the SDGs. We have also published two reportssetting out our ideas to deliver the SDGs: ‘Mobilising Finance to Support the Global Goals for SustainableDevelopment’ (2015) ‘Money Talks: How Finance Can Further the Sustainable Development Goals’ (2016).

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Allianz Group


Recognizing that climate change can severely impact our business activities, we started to integrate climateand sustainability criteria in our investment decisions in 2011. To enable protection from climate risks in theregions most vulnerable to climate change, we build on our experience as leading micro-insurer, offeringprimarily credit and life insurance policies to 57 million customers.Allianz has a dedicated competence center on climate change, Allianz Climate Solutions.We want to anticipate the risks of climate change, care for our customers and enable the transition to a low-carbon economy. Because managing risk is our profession.

Our commitments

• Sustainable Investment in renewables energies: > EUR 3 bn invested, target of EUR 5 bn.Systematic analysis of proprietary investments using 37 ESG criteria.

• Divestment from coal-based business models

• Minimizing environmental impact through energy efficiency, sourcing renewable energies andlow-carbon travel alternatives. Measurement and reporting of performance since 2006. Carbonneutral since 2012.

• Insurance: We incentivize preventive measures and compensate our customers’ losses e.g. fromextreme weather events.

• Engagement: Allianz is member of UNEP FI, B-Team and MCII, signatory to UNEP FI PSI, UN PRI,UN PDC, follows engagement strategy in asset management and conducts climate-relatedresearch.

How we support the Sustainable Development Goals?

• SDG 1 – Poverty:Increase insurance penetration, member of G7 Initiative on climate risk insurance.

• SDG 7 – Energy:1. Invest in renewable energy (RE); 2. Divest from coal; 3. Insure RE and storage.

• SDG 9 – Infrastructure:1. Allianz France invests in a fund for African infrastructure, including RE. 2. Give climate-resilience advice to developing countries when building new infrastructure.

• SDG 13 – Climate: Group Climate Strategy, Anticipate. Care. Enable. (see above).

• SDG 17 – Partnerships:1. Engage in PPP initiatives such as IDF, UNEP FI and similar. 2. Development of climate finance instruments as part of the Global Innovation Lab for

Climate Finance.

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AXA


AXA’s strategy regarding climate change is to leverage its risk management expertise to better understandand prevent risks and to mobilize its investment capacity to finance and encourage the energy transition. Thisstrategy addresses both the “mitigation” and the “adaptation” dimensions of climate change.

Insurers are well equipped to address climate-related risks. They can fund and promote risk research andeducation. They possess loss data, as well as models and tools to analyze and project this data. They have aduty to unveil and disseminate knowledge about such new risks, including poorly known threats to society.Through their significant investments, they are also well positioned to send the right signals to theinvestment community and to specific invested companies.

Our commitments

• Coal divestment - AXA has decided to divest from companies most exposed to coal-relatedactivities. This 500ME divestment was undertaken in the belief that sending such a signal tomarkets and regulators generates a positive influence, it contributes to de-risking our portfolios,it supports an energy transition curve which is aligned with a “+ 2°C” scenario and is consistentwith our broader Corporate Responsibility strategy to promote a stronger and safer society.

• Green investments – We committed triple our investments in green assets to reach 3Bn € by2020.

• Carbon footprinting - We signed the "Montreal Pledge" to assess and disclose the carbonintensity of our investments. This public carbon foot-printing analysis covers 75% of our generalaccount assets (over 400Bn€).

• TCFD - AXA serves as one of four Vice-Chairs in the Task Force on Climate-related FinancialDisclosures (TCFD) established by the Financial Stability Board (FSB) in January 2016.

• Carbon pricing – We are the first insurer to join the Carbon Pricing Leadership Coalition, apublic-private-civil society initiative led by the World Bank.


Through our diverse actions and public commitments we fully support the delivery of the SDGs. As anexample, we take part in the UN Global Compact initiative, launched in July 2000 by then UN SecretaryGeneral Kofi Annan, which seeks to encourage businesses, UN agencies, the labor market and NGOs to worktogether to integrate Sustainable Development Goals, universal principles on human rights, labor, theenvironment and the fight against corruption. The Global Compact is based on the rules of international lawadopted by the majority of countries, such as the Universal Declaration of Human Rights and the standardspromoted by the International Labor Organization. Each year, as an "active member", AXA updates the GlobalCompact database with information on best practices that reflect these principles, via a dedicated"Communication on Progress".

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Barclays


Climate change, with its risks and financial implications, is a critical issue that we must address.Understanding those risks, as well as the opportunities, through increased disclosure and transparency iscertainly necessary for market participants to make informed and efficient capital allocation decisions.

Banks are uniquely positioned to facilitate the flow of capital towards environmentally and socially beneficialactivity. Given our expertise, Barclays is well-positioned to help facilitate the capital required to acceleratethe transition to a low carbon economy.

Our commitments

We will:

• As a member of the FSB’s Task Force on Climate Related Financial Disclosures, provide a responseto their recommendations on how to improve transparency and build better understanding ofpotential climate-related risks and opportunities.

• Continue to play an active role in the UN Environment Programme Finance Initiative (UNEP FI)and the Banking Environment Initiative (BEI), and as a founding member of the Equator PrinciplesAssociation, which reviews and maintains the Equator Principles. Barclays is a signatory to theGreen Bond Principles and is a member of the Climate Bond Initiative.

• Continue to grow our Treasury Green Bond portfolio to £2bn over time.

• Reduce our credit exposure to fossils fuels, with a particular short term focus on coal, and movetowards development of cleaner energy sources.

• Continue to facilitate access to financing solutions for issues such as energy efficiency andrenewable energy – working with both issuer/corporate clients and with institutional investors.

• Manage our direct environmental footprint and commit to a target to reduce absolute carbonemissions by 30% by 2018, compared to a 2015 baseline.


In development of our Citizenship strategy, the Shared Growth Ambition (launched June 2016), we undertookextensive research and stakeholder engagement to understand where as a business we could have thegreatest positive impact in relation to the SDGs. We believe private capital will be needed to leverage publicinvestment to achieve the SDGs. Our approach is highlighted by the following:

• SDG 7: Affordable and clean energy: We are committed to delivering a range of financing solutionsto solve global challenges including renewable energy and energy efficiency

• SDG 9: Industry innovation and infrastructure: Our Corporate Bank produced a report on energyresilience in UK manufacturing as it has become a critical issue for the industry and therefore many of our clients

• SDG 11: Sustainable cities and communities: We have supported farmers and landowners in a variety of renewable energy projects, including wind, hydro, solar, biomass and anaerobic digestion

• SDG 15: Life on Land: Our human rights agenda and our approach to managing our environmentalimpact ensures we mitigate risks associated with biodiversity loss, deforestation and land degradation

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BBVA


Climate change is one of the biggest challenges of the 21st century and therefore requires an immediateresponse from each and every single economic actor. As a leading and global banking Group, BBVA has animportant role to play in promoting the transition to a low carbon economy and promoting a sustainabledevelopment. The Group has expressed its commitment to fighting climate change. In addition to itscontribution to a number of collective initiatives, BBVA has taken several actions aiming to reduce directimpacts on the environment, as well as providing climate finance solutions. The Group is currently working ona plan to ensure a comprehensive integration of environmental factors in the risk management of the company.

Our commitments

BBVA’s commitments and initiatives to fighting climate change:

• New environmental & social risk framework to be adopted in 2017 (continuous improvement ofthe identification and management of environmental risks in the Group’s operations)

• Continue leading the market in renewable energy funding: 1,221 MW financed in 2015 (+17%than 2014)

• Green bonds market: leading Spanish institution in green bonds underwriting.

• Review of all operations under the Equator Principles, regardless of the amount (applicationbeyond mandatory scope)

• Ecorating tool: Risk portfolio rating of SMEs from an environmental perspective (Spain and Mexico)

Renew Global Eco-efficiency Plan (figures per person for the 2013-2015 Plan: -16% CO2 emissions; -43% paper consumption; -23% water consumption; -14% electricity consumption; 33% peopleworking in certified buildings - ISO, LEED)


The role of the private sector as a lever of change in the implementation of the SDGs is widely recognizedand strongly supported by BBVA, as highlighted by its active participation to the European Development Days2016. One of the main BBVA’s contributions to the sustainable development lies in promoting bankingsolutions for financial inclusion, mainly in Latin American emerging markets: more than 10 million customersbenefit from low-cost digital channels products, specially designed for the financially excluded segment.BBVA Microfinance Foundation, one of the 13 world institutions that form part of the United Nations’ PrivateSector Advisory Group for the Sustainable Development Goals Fund, and awarded consultative status by theUN in recognition of its work in microfinance for development, serves 1.7 million entrepreneurs, 85% ofwhom are in a situation of vulnerability. BBVA also contributes to the sustainable development through itswide range of financial education and capability building programmes, an extensive research activity, as wellas several social projects, in many geographies, aimed at supporting SMEs and women entrepreneurship.

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BNP Paribas


As a global institution financing the energy sector, BNP Paribas’ environmental priority is to combat climatechange in the spirt of the Paris Agreement, one of whose objectives is to make financial transactionscompatible with low-carbon development. To minimize the impacts of climate change it is estimated that therise in temperature must be limited to 2°C by 2100. Reaching this objective requires a rapid energy transitionbased on efficiency and renewable energies. Financing this transition will require 2 to 3 trillion dollars infinancing per year, according the International Energy Agency, and a global bank such as ours has animportant role to play in this.

Our commitments

• Finance green infrastructures and energy efficiency: BNP Paribas will more than double itsfinancing of the renewable-energy sector so as to reach €15 billion in 2020 and it aims to beamong the three leading global participants in the market for euro-denominated green bonds

• Reduce the carbon footprint of investment portfolios: In the area of asset management, ourgroup has pledged to measure, publish and reduce the carbon footprint of funds managed withinthe framework of the Montreal Carbon Pledge and the Portfolio Decarbonization Coalition.

• Manage the financing of coal: BNP Paribas will no longer finance coal extraction, whether viamining projects or via mining companies which do not have a diversification strategy. In a similarmove, the bank has decided to no longer finance coal-fired power stations in high-incomecountries and to strengthen eligibility conditions in other countries.

• Integrate climate factors into the rating methodology which evaluates projects and companiesfinanced. As a result, the Group will gradually make systematic use of an internal carbon price.


By financing and investing in an ethical manner, BNP Paribas contributes to the economic development andthe creation of jobs in the countries where the Group is present. Furthermore, in order to participate inbuilding a more sustainable future, the Group finances and supports projects with a high positive impact andwhich contribute directly to reaching the Sustainable Development Goals. The aim of these 17 goals, definedby the UN, is to eradicate poverty by the year 2030 while preserving the planet.

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Crédit Agricole Group


There is a key role for financial institutions to play in combating climate change. Crédit Agricole Group’scommitment to tackle climate change is consistent with its global efforts towards environmental and socialresponsibility.

Firstly as a company, we have a duty to reduce greenhouse gas emissions related to our business activities.Secondly as an advisor, a lender, an investor and an insurer, Credit Agricole is instrumental in encouraging itscustomers - individuals, companies and local authorities - to opt for projects that mitigate climate risk. Lastly,we can accelerate innovation in the sphere of climate change.

Our commitments

• Pursuant to Mr Brassac’s commitments at the COP 21 in December 2015, concrete progresseshave been made. At 31 December 2016, CA Group ranks slightly above its 2015 commitments:• EUR 28 billion arrangements in support of energy transition i.e. about half of the planned EUR

60 billion over 3 years• EUR 1.1 billion of liquidity invested in Green Bonds out of the planned EUR 2 billion by Credit

Agricole SA and Credit Agricole CIB• Renewable energy financing have increased by 21% in 2016 (from EUR 425 million in 2015

to EUR 514 million in 2016)• EUR 150 million of funding mobilised by Amundi through its joint management company with

EDF for energy transition projects out of the planned EUR 5 billion by 2020

• In October 2016 Credit Agricole extended its 2015 commitment to stop financing coal mines toalso cover the financing of any new, or extension of, coal-fired power plants. This decision alsoapplies to companies working mainly on these projects.

• In 2015 we committed to further reduce our direct carbon footprint by 15% by 2020 throughour energy consumption, transportation and other emission sources.


Credit Agricole supports the SDG through its CSR policy and actions. We focus on the most relevant actionsconsidering our core business of finance provider, investor and insurer, and as civil society actor throughmultiple tools (financial, collaborative, behaviour influencer…).

Our climate change commitments are consistent with SDG 7 (clean and affordable energy source); SDG 9(industry, innovation and infrastructure) and SDG 13 (climate action). The actions of our insurance subsidiaryare consistent with SDG 3 (health and well-being). Our local activities contribute to SDG 8 (decent work andeconomic growth). Our involvement in and expertise of the agricultural sector both in developed anddeveloping nations strengthen our contribution to SDG 2 (fight against hunger) and SDG 1 (fight againstpoverty) through our micro-finance Grameen Credit Agricole foundation.

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Credit Suisse AG


Credit Suisse recognizes its share of responsibilities in combating climate change by supporting the transitionto a low carbon and climate resilient economy. As a financial institution, we are committed to playing ourpart in addressing this global challenge through our role as a financial intermediary between the economy,the environment and society. To underline Credit Suisse’s commitment, our CEO and the Executive Board arethe most senior decision-making authorities on sustainability matters – including climate change.

Our commitments

• We have developed policies and procedures to govern the responsible provision of financialservices to clients within specified business sectors that may pose elevated environmental andsocial risks, including climate impacts.

• We are committed to playing a part in facilitating financing solutions to support the transitionto a global low carbon energy system, and are well placed to do so given our capabilities in themarket.

• We became greenhouse gas neutral for our operations globally in 2010 through the “CreditSuisse Cares for Climate” initiative. Our four pillar GHG neutrality strategy includes optimizingoperations, capital expenditure, substitution and compensation.


In 2015, Credit Suisse published a report entitled “Aiming for Impact: Credit Suisse and the SustainableDevelopment Goals” to illustrate how the SDGs provide tangible opportunities for companies to pursuebusiness objectives while contributing to sustainable development. We have taken a number of measure totackle these new challenges and developments. For example, by enabling economic activity – especially atthe base of the pyramid –, our microfinance platform has the potential to address SDGs 1 (eliminatingpoverty), 2 (food security), 4 (education), 5 (gender equality), 8 (sustainable economic growth andemployment), 12 (sustainable consumption and production) and 17 (global partnership).

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Deutsche Bank AG


Public and private sector collaboration will be critical to promote and finance a shift towards a low-emissionsglobal economy, and climate resilient development “pathways”.

Energy efficient technologies and renewable energies are an essential part of a climate friendly developmentof the economy and society. Significant investments will be required in the coming decades to finance thesetechnologies. As a global bank, we can make an important contribution to raising the capital needed toimplement the Paris Agreement.

As with other industries, the financial sector is exposed to climate change. Accordingly, we seek todemonstrate how Deutsche Bank contributes to the reduction of climate related risks and how we supportthe transition to a low-emission economy through our core businesses.

Our commitments

• Specific due diligence for transactions and client transactions in sensitive sectors with highpotential for significant environmental and social impacts.

• Revised approach to financing coal mining and power, clearly stating no new financing for theexpansion of coal capacity, and a gradual reduction in overall exposure to coal.

• Arranged about USD 4.3 billion in project finance for renewable energy projects in 2016.

• Supported clients to issue EUR 8 billion in green bonds until the end of 2016.

• Contributed to global climate debates, e.g. discussed green finance policy plans for Germany’sG20 Presidency in 2017 (Deutsche Asset Management)

• Continued to operate on a carbon neutral basis.


Deutsche Bank acknowledges that private sector participation is needed to achieve the SDGs. We understandthat the SDGs form a useful benchmark for corporations by defining and prioritizing the most urgent globalchallenges. Our licence to operate will increasingly depend on our contributions to the SDGs.

• In 2016, Deutsche Asset Management managed ten sustainable and impact funds with a combinedvolume of over USD 1.76 billion, including e.g. the African Agriculture Trade and Investment Fund,the European Energy Efficiency Fund, the Green Growth Fund and several microfinance instruments.

• Deutsche Bank was the first commercial bank globally to become accredited to act as implementingentity for the UN Green Climate Fund. In October 2016, the fund approved an initial USD 78.4million investment in Deutsche Asset Management’s Universal Green Energy Access Program. Thisanchor investment will allow us to raise a total of USD 300 million in capital.

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Generali


As a global player, Generali wants to play an active role in supporting the transition towards a moresustainable economy and society. Insurance is the financial sector that is going to be one of the hardest hitby climate change, from rising claims to losses on investments.

As an insurer, whereas climate change has an impact on local conditions in the countries where the Groupsells its products, this will be reflected in the risk associated with the products sold. In extreme cases, somecoverage could no longer be economically sustainable and therefore no longer available.As an institutional investor, not acting or acting too late exposes Generali to three main risks: market risk,image risk and regulatory risk.

Our commitments

• Direct impactsMain goal of reducing our greenhouse gas (GHG) emissions by 20% by 2020 (base year 2013), tobe met through a series of sub-targets that regard all aspects of the business activities.

• Indirect impacts• We incentivize our clients to adopt environmentally sustainable behavior• We invest in a sustainable way by increasing investments in renewable energies and the

supporting infrastructure and by excluding from the investment portfolio companies involvedin episodes of serious environmental damage.

• We incentivize virtuous behavior in our supply chain

• Public commitment• We invest in research and innovation

We dialogue and work with national and international institutions (UNEP, CDP, The Geneva Association,Paris Pledge for Actions)


Insurance solutionsGenerali France offers to SMEs a consulting service for business risks assessment, integrating elements likefinancial results and intangible assets (reputation and brand). “Generali Performance Globale” provides discounts on insurance premiums and support in the plandevelopment. Risk assessment criteria include supply chain management, knowledge of quality standards,workplace health and safety, occupational diseases, resources consumption, waste management, personnelmanagement and professional development.

Initiative for employees and external stakeholderFor the World Environment Day, Generali launched a campaign aimed at raising awareness of theenvironmental challenges. Green tips on how to reduce energy, water and paper consumption and to promotesustainable mobility were published as well as environment-related news.For the European Mobility Week, Generali launched a communication campaign, including videos, aiming atraising awareness of road safety and sustainable mobility.

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HSBC


Climate change represents an urgent and potentially irreversible threat to human society and to the globaleconomy. If unchecked, climate change threatens the customers, the communities and the environment onwhich HSBC’s business has been built over 150 years. If HSBC is to continue to help people to fulfil their hopesand realise their ambitions, it has an important role to play in combating climate change. HSBC believe majorglobal institutions have an essential role in financing some of the significant economic and social shifts, aswell as innovative solutions, necessary to transition to a low carbon economy and keep the globaltemperature increase below 2°C.

Our commitments

• Through our Climate Business Council, HSBC will drive climate-related business opportunities,focusing on helping clients transition to a low-carbon economy.

• A new dedicated “Sustainable Financing Unit” will support coverage and advisory bankers todevelop content and product development and help Global Markets to mobilise sources ofsustainable finance.

• HSBC continues to participate in important initiatives such as the Carbon Pricing LeadershipCoalition, the Energy Transitions Commission and the New Climate Economy, championed by ourGroup Chief Executive Stuart Gulliver

• We support progress on climate-related financial disclosure guidance for all companies –including banks and financial institutions - supporting the implementation of Financial StabilityBoard Disclosure Taskforce (HSBC’s former CAO is a Special Adviser to the TCFD).

• HSBC France has issued a (EUR500 million) green bond and HSBC Holdings is committed to investUSD 1 billion in high-quality assets covering a range of low-carbon initiatives.

• As a UN Green Climate Fund accredited entity, one of only three banks, we have committed tohelping the Fund finance more green projects this year.

• We will continue to engage with UNEP and the G20 Presidency on disclosure, risk mitigation andinfrastructure financing.

• We are committed to retaining our position as a lead issuer of green bonds – recently acting assole green structuring adviser and joint bookrunner for the Polish government’s EUR750 milliongreen bond: the first sovereign green bond to be used to fund renewable energy projects, cleantransport technology and sustainable agricultural operations.

• HSBC Global Asset Management are active stewards in climate risk. As signatories to the MontrealCarbon Pledge we continue to measure and publically disclose the carbon footprint of part of ourequity portfolio.

HSBC has invested £1.85bn of its UK employees’ pension savings in a new environmentally friendlyfund: the Future World fund run by Legal & General Investment Management, as the default equityoption for its DC pension scheme.

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Sustainability underpins our strategic priorities. In a global marketplace where the private and public sectorsare increasingly interlinked, the SDGs present an opportunity for businesses to play a role in globalsustainable development. As a responsible business, HSBC seeks to implement strategies that advanceinclusive economic growth, social equity and progress and environmental protection to deliver long-termvalue. HSBC already delivers high social and environmental benefits through various business activities.Climate Change Research, the HSBC Water Programme, Asset Management and Bus Rapid Transport are someof our world-leading examples. As an example, our Water Programme, launched in 2012, is a five-year,USD100 million programme in partnership with Earthwatch, WaterAid and WWF and local project partners.It aims to provide and protect water sources, inform and educate communities in need, enabling people toprosper and driving economic development.

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ING Bank N.V.


Climate change is an unparalleled challenge for our world. A challenge to our planet’s health, a challenge tothe sustainability of societies and of economies around the world. Banks also have a role to play. ING playsits part in various ways.

Our commitments

• Our activities impact the environment we operate in – both directly, through our operations, butalso indirectly, through our financing portfolio. Being sustainable is not just about reducing ourown impact, it’s in all the choices we make – as a lender, as an investor and through the serviceswe offer our customers. We approach the idea of ‘sustainable transitions’ from three perspectives:our own transition, our clients’ transitions and our business supporting society’s transition.

• Our own transition: reducing our own impact on the environment through our operations andsuppliers. We monitor and manage our environmental impact closely. We are transparent aboutthe climate impact of our operations, invest in operational efficiency solutions, are commited tosourcing 100% renewable energy by 2020, integrate sustainability in our procurement processand have been offsetting our carbon emissions since 2007. We aim to improve our environmentalimpact through our operations by setting science-based targets, and reducing the impact of ourbuildings, our IT systems and our business travel.

• Our clients’ transitions: we support clients in their efforts to grasp opportunities to innovatetheir businesses, but to also support them when they face challenges in developing (new)business models that are more sustainable. At the same time, we apply strict social, ethical andenvironmental criteria in our own financing and investment policies and practices.

• Alongside the ESR screening, we intend to seize opportunities in this area as well by increasingSustainable Transitions Financed (STF). STF represents the volume of business that ING conductswith clients and projects that provide sustainable solutions and are environmental or socialoutperformers and therefore contribute to a more sustainable economy. We aim to continuouslygrow the number or volume of Sustainable Transitions Financed. We successfully issued our firstgreen bond in November 2015, a milestone in achieving our sustainability ambitions as it alignsour green lending activities with our corporate funding programme.

• Parallel to this, we are researching whether a link can be drawn between increasing the STF andthe avoidance of water usage, waste generation and carbon emissions. This way, we would be ableto measure the actual environmental impact of financing more sustainable projects. Ourambition is to finance €35 billion in sustainable projects and customer transitions in 2020.

• Supporting society’s transition: Via our clients’ transition to more sustainable businesses, weimprove the environmental impact on society. Their combined efforts can make a significantdifference. We help create awareness and promote sustainable solutions via sharing ourknowledge and collaborating with partners to drive progress for society and to engage on theissues of (the financing of) climate adaptation and mitigation.

• Finally, partnering for climate action. Accelerating change cannot be done alone. That’s why weengage with clients, business partners and other societal stakeholders and collaborate in supplychains and at industry level. That’s why we share knowledge based on research and why wecommit to or are part of international initiatives such as the UN Global Compact, the OECDGuidelines for Responsible Business Conduct and the Equator Principles.

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We indirectly contribute to many SDGs through the clients and specific projects we finance and the financialservices we offer. However, we can have the most impact on the goals that are most aligned with ourportfolio and strategic priorities.

As a bank committed to empowering our customers and accelerating sustainability within our company aswell as with our customers and in society, our primary focus is therefore on the goals on promotingsustainable and inclusive economic growth (goal 8) and sustainable consumption and production (goal 12).These SDGs resonate with ING’s approach to sustainability.

We aim to report on our contribution to several SDGs in our Annual Report, including our primarycontributions to SDGs 8 and 12.

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MAPFRE


The fight against climate change is a key component of the company's actions on environmentalresponsibility. MAPFRE aims to lead the transformation toward a low-carbon economy and to incorporate aspart of its business the risks and opportunities arising from climate change.

MAPFRE as an insurance company is fully aware of the impact of climate change on financial markets andthe importance of acting immediately by defining specific, measurable and transparent goals.

Our commitments

MAPFRE is committed to the reduction of 20% of its global emissions of greenhouse gases, through astrategy aligned with the objectives of the European Union 20-20-20 targets and based on:

• Reducing energy intensity through energy efficient investments.

• Promoting clean energies such as buying green energy with guarantees from renewable sources.

• Offsetting emissions of greenhouse gases.


MAPFRE is facing the SDGs with the same commitment that has been working, and reporting, in the previousMillennium Development Goals.

To contribute to the fulfillment of the new agenda, we’re working it within our commitment to GlobalCompact of the United Nations, entity that MAPFRE joined in 2004.

Also, the new Sustainable Development Goals are part of the strategy of MAPFRE. The SDGs are reflected inthe first line of our Sustainability Plan 2016 -2018 which aim is to determine the positioning of the companyin the SDGs and identify and measure the impacts of MAPFRE in those objectives.

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Nordea


The world is challenged by impacts of climate change and increasing resource scarcity. These challenges areputting pressure on natural habitats, communities and people as well as on businesses, presenting a threat toglobal prosperity.

By advising our clients and acting on their behalf we can make important contributions to economic growthand prosperity, through capital allocation, interaction with companies and by building partnerships. This isnot only an opportunity, but a part of our fiduciary responsibility.

Our commitments

• We integrate climate change in our investment and lending decisions and in all of ourbusiness operations.

• We are signatories to the Paris Pledge. As signatories to the Montreal Carbon Pledge we committo measuring and publicly disclosing the carbon footprint of our investment portfolios on anannual basis.

• We engage with companies and other stakeholders including policymakers on climate change,individually or through collaborative initiatives with global reach and supported by a largenumber of investors. We are members of and engage through IIGCC, CDP and the PRI. We screenall of our holding against environmental norms, including the Paris agreement. We do not investin companies with 75% of revenues derived from sales of coal products.

• We are signatories to the UN Global Compact, UNEP FI and the Equator Principles.


We fully support the SDGs and the development of a sustainable finance sector that can contribute to thedelivering of the SDGs. Our sustainable finance strategy is aligned with the SDGs as well as the ParisAgreement. We engage on issues related to the SDGs as part of our active ownership and with a number ofstakeholders and standard setters, individually or through collaborative initiatives with global reach.

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RBS


Climate change is a major global issue and we are committed to the role we need to play in addressing theproblem through the services we provide and the way we run our bank. Human-influenced climate changeis real, happening now, and must be tackled to mitigate the worst impacts for the future. The ParisAgreement provides the framework for achieving the 2 degree ambition, but the size and scale of thetransformation needed means everyone – not just Governments – must play their part.

Our commitments

We are a bank, which means our biggest influence lies in the money and services we provide tocustomers. Relative to our size, our operational footprint is quite small, but also significant. Ourstrategy on climate change is therefore structured into three main areas:

• Our financing of the solutions to climate change such as low carbon technologies, energy efficiencyand adaptation measures, including a planned £1bn of sustainable energy deals in 2017.

• Measuring and tracking our transition away from financing the most carbon intensive activities,including a reduction of 75% in our exposure to energy sectors since 2010.

• The efficiency of our own buildings and operations, where we have seen a 20% reduction in ourscope 1 and 2 emissions since 2014.


As part of our strategy to simplify our business, RBS is changing significantly to become a UK and Irelandfocused bank with strong presence in personal and business banking markets. Through this process, RBS isworking to identify the most relevant Sustainable Development Goals to the markets and geographies inwhich we operate and our evolving sustainability strategy. At present, we see very close alignment betweenour activities and the SDGs relating to poverty, gender equality, affordable and clean energy, decent work andeconomic growth, sustainable cities and communities and climate action. We expect to further develop ourapproach to these goals in the coming years, in line with our wider ambition to become a sustainable bankdelivering long term value to all its stakeholders.

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SEB


As a bank, we are naturally influenced by developments in the world and the global economy, includingchallenges connected to sustainability. SEB supports that the Paris agreement for the first time recognizedthat the business community is a driver for innovation and sustainable development and that the financialsector’s importance and large indirect impact now is widely acknowledged. We commit to initiatives like theUN Global Compact, the Principles for Responsible Investments and the Equator Principles and we workpersistently to integrate sustainability into our business strategy, processes and offerings.

Our commitments

• SEB commits to be a role model in sustainability within the financial industry. To reach this, wewill continue to focus on promoting climate friendly and resource efficient solutions, sustainableinvestments, and supporting entrepreneurship to drive economic development and create newjobs. We will continue to reduce our own environmental footprint, in particular reducing our CO2emissions with 20 per cent by 2020. For 2016, SEB has the objective to disclose carbon footprintfor the majority of SEB’s equity funds (from seven funds in 2015). SEB also commits to reduceour electricity consumption by 20 per cent by 2020.


We have done an initial analysis of the 17 sustainable development goals and mapped these towards oureight priorities as a bank. This work will continue as we define how to integrate them into the bank’soperations and decide what actions to take.

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Société Générale


Given current climate upheavals, the major challenge of the XXI century is to preserve the environmentalstability at the global stage. In the run-up to the 2015 COP 21 Summit, Societe Generale (SG) engaged toalign its financing in line with the International Energy Agency (IEA) 2 degrees scenario by 2020. As part ofits commitment with the IEA 2 degrees scenario, SG set out a global framework that pulls together andstrengthen:

• The various initiatives taken by the Bank over the past years to help financing the energy transition;

• The reduction of the Bank’s carbon footprint of its activities.

Our commitments

• Reducing the coal sector financing. SG is no longer involved in project financing of coal-firedpower plants in high income OECD countries, nor in projet financing of development of coalmines.

• Fight against deforestation. SG reinforces its commitments on forest conservation by adoptingthe Banking Environment Initiative (BEI)’s Soft Commodities Compact with the Consumer GoodsForum.

• Renewable energy. SG is doubling its financing capacity for renewable energy projects by 2020.

• Green financing. SG focuses on the diversification of different energy production sources whilehelping clients to reduce their energy consumption. SG also steps up its actions related to theadaptation to the climate-change in developing countries.


Societe Generale contributes to the Sustainable Development Goals through several commitments that thegroup has made:

• SDG 7 – Renewable Energies: we engaged in 2016 in investing in renewable energies and divestingfrom coal;

• SDG 2 – Renewable Energies: we engaged to align our financing with the International Energy Agency(IEA) 2 degrees scenario by 2020;

• SDG 15 – Deforestation: we committed to stop deforestation by adopting the Banking EnvironmentInitiative (BEI)’s Soft Commodities Compact with the Consumer Goods Forum;

• SDG 17 – Partnerships: we engage in partnerships to support the sustainable and climate-resilientdevelopment of our clients in developing countries.

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Swiss Re Ltd.


Climate change has been our most important material issue for many years: For a reinsurer, it constitutes akey material topic because it will lead to an increase in the frequency and severity of natural catastrophessuch as floods, storms, excessive rainfall and drought. In combination with growing asset concentrations inexposed areas and more widespread insurance protection, this will cause a steady rise in losses. Of our keymaterial topics, two are directly connected to climate change: managing climate and natural disaster risk,and advancing sustainable energy solutions.

Our commitments

Swiss Re is committed to:

• Advancing our knowledge and understanding of climate change risks, quantifying andintegrating them into our risk management and underwriting frameworks where relevant.

• Developing products and services to mitigate or adapt to climate risk.

• Raising awareness about climate change risks through dialogue with clients, employees and thepublic, and advocacy of a worldwide policy framework for climate change.

• Tackling our own carbon footprint and ensuring transparent, annual emissions reporting.


Swiss Re endorses the UN Agenda 2030. Many of our activities contribute to one or several of the agenda's17 global goals. We address selected SDGs with our key material topics.

Managing climate and natural disaster risk contributes to SDG 13, Taking action to combat climate changeand its impacts. We set ourselves the goal of offering USD 10 billion protection against climate risks tosovereigns and sub-sovereigns by 2020. We further defined ambitious goals to continue reducing our ownenvironmental footprint.

Advancing sustainable energy solutions contributes to SDG 7, Ensuring access to affordable, reliable,sustainable and modern energy. We use our capacity and technical expertise to provide effective risk coversfor complex offshore wind farm projects. In addition, we set the goal to obtain 100% of power used for ourown operations from renewable sources by 2020.

Managing sustainability risks and investing responsibly contribute to SDG12, Ensuring sustainableconsumption and production patterns. We consistently identify potential sustainability risks in our businesstransactions and abstain from them if warranted. We further have an investment target for green bonds ofat least USD 1.0bn. In 2016, we committed to adopting the recommendations of the FSB Task Force onClimate-Related Financial Disclosures.

An example of how we contribute to SDG 17, Partnering for the goals, is our commitment to the Grow AfricaPartnership. We offered up to 1.4 million smallholder farmers in Africa protection against weather risks.

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UBS AG


Climate change is one of the most significant challenges of our time. The world’s key environmental andsocial challenges – such as population growth, energy security, loss of biodiversity and access to drinkingwater and food – are all closely intertwined with climate change. This makes the transition to a low-carbon economy vital. We are determined support this transition for our clients and our firm through ourcomprehensive climate change strategy on risk management, investments, financing, research and ourown operations.

Our commitments

• We support renewable energy and clean tech transactions.

• We do not support transactions of companies operating coal-fired power plants unless they havea strategy to reduce coal exposure or adhere to the strict greenhouse gas emission standardsrecommended by leading international agencies.

• We do not support certain coal mining companies and significantly limiting lending and capitalraising provided to the sector.

• We commit to secure 100% of our electricity from renewable sources by 2020, thereby reducingour own greenhouse gas footprint by 75% compared to 2004 levels.


We strongly support the SDGs, as endorsed by Axel Weber at the UN Global Compact Leaders' Summit in June2016. We continue to design financial products on SDG themes to satisfy the growing appetite of ourinvestors for sustainable investing. We recently raised a record $471 million for the UBS Oncology ImpactFund, an impact investing initiative to develop cancer treatments. In collaboration with the UN, UBS willlaunch a global sustainability index based on the Global Compact 100 stock index. UBS launched the UBSGrand challenge, a global employee competition, calling for innovative financial solutions to five of thebiggest world challenges as defined by the SDGs.

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UniCredit Group


UniCredit acknowledges that preserving ecosystems is the only way to sustainably maintain economicdevelopment. Climate change, loss of biodiversity, soil degradation and water scarcity are undermininghuman activities. This is why, in recent years, we have engaged in a series of initiatives aimed at reducing thedirect and indirect impacts of our operations. Through our greenhouse gas abatement targets, our supplierselection criteria and our lending practices, we are engaged in demonstrating that businesses can play anactive role in addressing the challenges of the 21st century. We engage with our customers and suppliers andin private-public partnerships, so that businesses, together with policymakers, can contribute to preservingnature and eradicating poverty and hunger.

Our commitments

• Our commitment to fighting climate change follows a three-tiered approach: (i) shrinking thecarbon footprint of our operations; (ii) financing renewable energy sources and (iii)developing ways to reduce financed emissions. As a signatory of the United NationsEnvironment Programme Finance Initiative (UNEP FI), UniCredit pledges to deepen itsunderstanding of the risks and opportunities of climate change.

• UniCredit has participated from the onset in the CDP (formerly the Carbon Disclosure Project), an initiative that promotes the commitment of large companies to disclose the risks related toclimate change inherent in their activities.

• UniCredit is a proud supporter of WWF and its many environmental conservation projectsthroughout Italy, including the Oasis system.


By embracing green business opportunities – UniCredit provides financial support for a number ofrenewable energy sources such as wind, solar and hydro. At the end of 2015, our Group’s portfolio in thissector amounted to a total exposure of around €9.3 billion. By Reducing environmental impact - UniCredit’s Greenhouse gas (GHG) emissions had dropped to 330,327tons, which was 33% percent less than 2008 base year. The target was achieved by substantially optimizingthe way that UniCredit uses working space. Our current commitment is 60% reduction target by 2020, and80% reduction target by 2030.

Zurich Insurance Group


Zurich’s mission is to help its customers understand and protect themselves from risk, such as the risksassociated with climate change. According to the Intergovernmental Panel on Climate Change (IPCC), thereis strong evidence that climate change is occurring, that it is influenced by human action and that it isleading to changes in extreme weather and climate events. The human impact and socioeconomic cost ofextreme weather and climate events is multiplied by economic development, population growth, coastalmigration and rapid urbanization.

Our commitments

• We confront the risks posed by climate change through our insurance business: Zurich helpsits customers understand and protect themselves from the risk of natural hazards and extremeweather events through insurance, which provides a mechanism to transfer risk and an incentiveto mitigate risk. We work closely with communities and policy-makers to promote sound policiesthat enable insurance to function effectively. This includes placing more emphasis on riskreduction, preparedness and resilience and not only focusing on recovery and rebuilding.

• Our responsible investment approach: As part of our responsible investment approach, we aimto integrate the risks and opportunities associated with climate change, as well as otherenvironmental challenges, into our investment decisions. We are a leader in the emerging ‘greenbonds’ market, whose proceeds help communities mitigate and adapt to the consequences ofclimate change. We also intend to invest up to 10 percent of our private equity investments withprivate equity fund managers whose investment strategies we expect to generate positive socialand environmental outcomes, and who are willing to report on non-financial impact metrics.

• Helping mitigate climate change: Zurich takes steps to reduce carbon emissions from its ownoperations to help mitigate climate change, reduce energy consumption and conserve valuablenatural resources. We aim to reduce carbon emissions generated by our office buildings andbusiness travel by 50 percent per employee, and energy consumption per employee by 40 percentby 2020, compared with a 2007 baseline. At the end of 2015, we had already achieved a 43percent reduction in carbon emissions per employee and a 33 percent reduction in energyconsumption per employee. Zurich has been operating carbon neutrally since 2014.


The following are examples of the way in which Zurich is supporting the Sustainable Development Goals.

• SDG 1 End poverty in all its forms everywhereBlue Marble Microinsurance is a consortium of eight companies formed to provide insurance to thosewho need it most – the world’s poorest. Zurich insurance Group is one of the founding members.

• SDG 6 Ensure availability and sustainable management of water and sanitation for all Zurich and the Global Resilience Partnership launched a Global Resilience Challenge called the Water

Window. It is a grant based competition focused on identifying and developing locally driveninnovations and high-impact solutions that improve water resilience.

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• SDG 7 Ensure access to affordable, reliable, sustainable and modern energy for all Zurich has pledged to invest up to USD 2 billion into green bonds. Zurich is looking at renewable energy

as the main focus for green bond proceeds. It has also invested in green bonds focused on water, aswell as green bonds that fall into a category of protecting, restoring and promoting sustainable use ofecosystems, managing forests, combating desertification and reversing land degradation.

Zurich continues to increase the percentage of renewable power it uses.

• SDG 10 Reduce inequality within and among countries Population Services International (PSI) is a global organization dedicated to improving the health of

people in emerging countries. In 2013, Zurich and PSI together looked at ways private investors andNGOs can work together to achieve greater social impact while still generating a return on investments.In collaboration with PSI, we produced a report that introduces a systematic framework providingconcrete ideas on how NGOs might use private investor capital to deliver increased social impact.Zurich and PSI continue to work together, and are now preparing to put into practice, as a test case, aproject based on one of the six financial models outlined in the report.

• SDG 13 Take urgent action to combat climate change and its impacts We go beyond insurance through a dedicated initiative to help communities become more resilient to

flooding. Zurich’s flood resilience alliance brings our experts together with humanitarian organizations,NGOs and academic institutions to improve communities’ understanding of and resilience to flood risks.

EFR – European Financial Services Round Table (asbl)Rond Point Schuman 11

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Documents

SUSTAINABLE FINANCE & CLIMATE CHANGE. EFR case studies... · 2. Give climate-resilience advice to developing countries when building new infrastructure. † SDG 13 – Climate:Group