Sustainable investing passed its first real test

On October 26, 2020, The Rockefeller Foundation announced its commitment of USD 1 billion over the next 3 years to strengthen health systems and improve access to clean energy in developing countries. This commitment to green recovery in developing countries intends to rebuild economies and secure a safer future. Beyond the economic benefits that this...Read more »

The International Energy Agency (IEA) has published its new flagship report, Energy Technology Perspectives 2020. It analyses more than 800 different technology options to assess pathways to reaching net-zero emissions by 2070 while ensuring a resilient and secure energy system. According to the report, transitioning only the power sector to clean energy would get the...Read more »

The International Institute for Environment and Development (IIED) published a paper about the use of debt swaps to address the debt, climate, and biodiversity crises. Published in September 2020, the paper illustrates how governments could address this triple crisis in their COVID-19 recovery packages using debt for climate and nature program swaps. According to the...Read more »

On August 27, 2020, partners of the U.K. Ignition project launched the report Nature-Based Solutions to the Climate Emergency: The Benefits to Business and Society. The project’s aim is to develop innovative financing solutions for investments in Greater Manchester’s natural environment, helping the city to adapt to the impacts of climate change. The report presents...Read more »

On August 26, 2020, The Guardian reported the creation of a new joint venture that seeks to invest billions in natural capital around the world. HSBC Global Asset Management and Pollination, a climate advisory and investment firm, are forming the world’s largest investment firm dedicated to environmentally friendly projects beyond renewable energy. The plan is...Read more »

In August 2020, the Biofuture Platform launched a set of voluntary principles designed to help economies create jobs in the bioenergy sector. The Biofuture Platform is a government-led, multi-stakeholder initiative supporting international coordination for a low-carbon bioeconomy. The bioenergy sector, currently employing around 3 million people worldwide, was severely hit by the COVID-19 pandemic. At...Read more »

In August 2020, more than 100 economists called for an end to the carbon economy in a letter published by The Guardian. They argue that, while the current crisis drastically reveals the weaknesses of the current economic system, it also offers a window of opportunity to build back better and foster stability. The letter includes...Read more »

On July 6, 2020, the United Nations Principles for Responsible Investment (UN PRI) released a framework to guide investors in engaging with policy-makers on a sustainable recovery. UN PRI writes that, as policy-makers are rolling out recovery strategies, investors should engage with them to provide technical expertise and to ensure that capital is steered toward...Read more »

In June, E3G and the Kigali Cooling Efficiency Program published a report on how climate-friendly cooling can support a clean, resilient Covid-19 recovery. They identified six key opportunities for including sustainable cooling solutions in stimulus packages that can create jobs, reduce emissions, secure the supply chains of medical care products and food, and boost the...Read more »

Bloomberg’s Supply Lines provides thought provoking perspectives Jim Thompson, founder and chairman of Crown Worldwide Group. Thomson draws from experience since 1965 in the logistics industry. He suggests that COVID 19’s supply chain disruptions will signify and bumpy ride rather and a dramatic fall in global trade. Thomson also remains skeptical that digital technologies and...Read more »

Evidence is emerging regarding the consequences of economic and income inequality. The UN High Commission for Human Rights reports on the disproportionately severe impact of COVID-19 on racial and ethic minorities. Likely causes for the higher death rates across minorities in all countries include poor health care, overcrowded housing, exposure to environmental risks, and broader...Read more »

The International Energy Agency (IEA) in collaboration with the International Monetary Fund (IMF) published a Sustainable Recovery Plan on June 18th, 2020 that suggests a $3-trillion stimulus package for transitioning globally towards clean energy over a course of three years. The plan focusses on stimulus measures for six sectors that the EIA identifies as fundamental...Read more »

In a sustainable recovery, social protection measures must reflect the current role of women in the care economy. UN Women also pleads for ensuring women have a seat at the table in the design of economic recovery packages, as there is plenty of evidence that more inclusive responses to crises are also better and more...Read more »

The Climate Action Network published a policy manual on June 03, 2020 for governments on how to attach carbon emission targets to bailouts provided to the aviation industry. The manual lists further policy recommendations for aligning this industry with the goals of the Paris Agreement and achieving net-zero aviation emissions by 2050. Policies should address...Read more »

In May 2020, the International Monetary Fund and the World Bank Secretariat published a new report that analyzes the inequalities that arose from the COVID-19 pandemic and demonstrates how already disadvantaged groups have been disproportionately affected. The report illustrates why it is so important for a sustainable recovery to ensure access to opportunities on the...Read more »

On June 5, 2020, the Organisation for Economic Co-operation and Development published a brief on how economic recovery measures can be designed to build back better. Governments must put well-being and inclusiveness at the centre of their approach to a resilient recovery, while at the same time staying on track to achieve the goals of...Read more »

While many calls to action for green or sustainable recovery have been made, The Guardian reported on June 6, 2020, that at least USD 500 billion will be benefiting fossil fuel industries, without green strings attached.

On May 29, 2020, The Guardian reported increasing evidence on the link between exposure to air pollution and COVID-19 infections and death rates. To make societies more resilient and avoid a second wave, tackling air pollution must play a central role in the recovery.

On June 4, 2020, on the evening before World Environment Day, the International Union for Conversation of Nature (IUCN) explained in this blog why protecting our natural environment is a safer and cheaper option than waiting for the next crisis to hit. 

The World Resources Institute reports that the rate of return of climate adaptation investments ranges from 2:1 to 10:1. The investments considered in the simulation include strengthening early warning systems, making new infrastructure climate resilient, improving dryland agriculture for crop production, protecting mangroves, and making water resources more resilient. These five investment areas alone can...Read more »

United Nations Secretary-General Antonio Guterres highlighted the urgency of a green recovery in a speech on December 2, 2020. In his address at Columbia University in New York, he painted a bleak picture of the state of the planet, pointing to the concerning results of the provisional State of the Global Climate report by the...Read more »

On November 17, 2020, the United Kingdom government unveiled its 10-point green recovery plan. The GBP 12 billion stimulus package will benefit the green economy across the country, for instance going toward carbon capture, hydrogen, nuclear, electric vehicles, and renewable energy. Prime Minister Boris Johnson estimates that the green recovery plan will create 250,000 new...Read more »

The European Bank for Reconstruction and Development (EBRD), the European Union (EU), and the Green Climate Fund (GCF) launched two programs to boost green finance and improve value chains, aiming to foster a green recovery of the Egyptian economy. Working with the EBRD’s local partner banks, the programs cumulatively worth EUR 220 million will offer...Read more »

On November 9, 2020, the British Chancellor Rishi Sunak unveiled green finance plans, proposing to issue the United Kingdom’s first sovereign green bond in 2021 and make climate risk disclosure mandatory for listed major companies from 2025. In a statement to parliament, Sunak said about the green bonds: “This will be the first in a...Read more »

On October 28, Nordic Prime Ministers announced their intention to encourage institutional investors to scale up green finance and investments. In a joint declaration, the Prime Ministers underlined that Nordic countries could and should take the lead on green recovery, pointed to the urgency of mobilizing private green investments, and stressed the interdependency of the...Read more »

The German Environment Agency (Umweltbundesamt) published a paper analyzing 130 studies on green recovery programs. It finds a broad consensus on the need to use COVID-19 recovery packages to address the climate and biodiversity crises. The authors of the paper also discover a consensus on the huge benefits of green recovery programs, the eligibility criteria...Read more »

In September 2020, the World Bank published a new paper about private finance for nature. The detailed piece, which is available on the Green Finance Platform, argues that private finance can and must be harnessed to better protect and manage biodiversity and ecosystem services around the world. The authors underline that governments and regulators, supported...Read more »

Researchers from the Global Development Policy Center at Boston University have developed a way to measure the International Monetary Fund’s (IMF) response to the COVID-19 pandemic. The IMF COVID-19 Recovery Index aims to quantify the extent to which the organization recommends (or conditions) borrowing countries to increase their efforts to combat the pandemic, protect vulnerable...Read more »

On September 28, the Global Innovation Lab for Climate Finance (the Lab) launched eight innovative finance solutions designed to channel private resources to climate action in developing economies. The instruments pay attention to supporting the most vulnerable populations during and after the pandemic while building long-term resilience. The finance instruments will support nature-based solutions as well...Read more »

Political leaders from around the world have launched the Leaders’ Pledge for Nature, committing to reversing biodiversity loss by 2030. Supported by more than 70 countries and several non-state actors, the pledge is meant to send a united signal to step up global ambition for biodiversity, nature, climate, and people. The Leaders’ Pledge for Nature...Read more »

The Organisation for Economic Co-operation and Development (OECD) published a new policy brief about opportunities for a green, inclusive COVID-19 recovery. The document, called Making the Green Recovery Work for Jobs, Income and Growth, includes a review of announced recovery and stimulus policies in OECD and Key Partner countries. On the one hand, OECD governments...Read more »

The Asian Development Bank (ADB) has restructured its financing plan for Bangladesh to help the country recover from the COVID-19 pandemic. The Country Operations Business Plan (COBP) for 2021 to 2023, which was published in August, includes USD 5.28 billion in loans. A major part of the funds (USD 2.39 billion) will be disbursed in...Read more »

On August 28, 2020, the Scottish Government proposed the key missions for the new Scottish National Investment Bank. The Bank is supposed to support Scotland’s economic recovery by creating inclusive, long-term economic growth based on three missions: Fostering a just transition to net-zero emissions by 2045 (primary mission).Creation of opportunities and reduction of inequalities.Usage of...Read more »

The Australian Industry Group urges the government to significantly step up its investments in renewable energy and energy efficiency for a clean recovery. In its pre-budget submission, the Australian peak employer body suggests public spending of AUD 3.3 billion over 10 years on renewable energy and AUD 500 million over two years to enhance energy...Read more »

On August 31, 2020, Forbes published an article outlining several policy recommendations to support the U.S. offshore wind sector. It is based on a recent policy brief by climate policy think tank Energy Innovation. In the Forbes article, author Amanda Myers first presents the main benefits and opportunities of offshore wind in the U.S., highlighting...Read more »

On August 24, 2020, the German Government announced the launch of its first Green German Federal Securities in the second half of 2020. Up to EUR 11 billion is expected to be issued through these financing instruments in the coming months. Dr. Jörg Kukies, State Secretary at the Federal Ministry of Finance, explained: “From now...Read more »

On August 6, 2020, the World Bank approved USD 250 million in International Development Association (IDA) credit and grants for Niger. The funds are supposed to help the West African country to develop its human capital and to address challenges caused by the COVID-19 pandemic. The new funding is part of a program series targeted...Read more »

On August 5, 2020, the European Investment Bank (EIB) announced it was directing EUR 300 million toward the COVID-19 response and recovery in African nations. The funding is part of the EIB Team Europe Initiative, designed to help the most vulnerable and exposed countries respond to the immediate health crisis, mitigate social and economic impacts,...Read more »

The Autonomous Province of Trento has signed an agreement for EUR 300 million in financing from the European Investment Bank to distribute loans to municipalities and public entities in need of funding for a sustainable recovery from the pandemic. The agreement was signed on July 21, 2020, and an initial tranche of EUR 160 million...Read more »

On July 17, 2020, West Berkshire Council issued the U.K.’s first local government green bond using the crowd investment platform Abundance. This innovative financing solution is called Community Municipal Investment and targets local citizens to become investors for green projects in their own municipalities. Within a week, GBP 300,000 of the GBP 1 million target...Read more »

On 15. July 2020 the European Investment Bank (EIB) approved EUR 16.6 billion of new financing, of which EUR 10.2 billion will be invested for COVID-19 related recovery projects. Investments are earmarked for improving public health services and adapting other public services institutions across several European countries to respond better to the pandemic. Credit lines...Read more »

On June 26, 2020, the European Investment Bank (EIB), the long-term lending institution of the European Union owned by its member states, announced to invest EUR 43.5 million to finance four 50-megawatt peak (MWp) solar photovoltaic (PV) plants in Andalusia, Spain. These plants are also called the Cabrera Solar Project. Emma Navarro, EIB Vice President responsible...Read more »

While the European Commission’s latest forecast expects Ireland’s economy to shrink by 8.5% this year, the Irish economy is reopening faster than planned. On July 2, 2020 the Bank of Ireland outlined its plan to support the country’s economic recovery after COVID-19, which focuses on homebuilding, green investment, and local businesses. The Bank aims to...Read more »

The Green Bond Bulletin of NN Investment Partners provides excellent insight into the Green and Social Bond markets. In their article from June 30, 2020, NN Investment Partners report on recent developments in the Social Bond and sovereign Green Bond markets in light of the COVID-19 pandemic. They highlight the surge of Social Bond issuances...Read more »

On June 30th 2020, the European Union (EU) and the European Bank for Reconstruction and Development (EBRD) announced a total grant package of EUR 61.3 million to be provided for green and climate resilient investments in Egypt, Morocco and the countries of the Eastern Partnership. By allocating grants to energy efficiency, renewable energy and climate...Read more »

Environmental Finance reports on 08 June 2020 that Ninety One, an asset manager, recently launched a COVID-19 recovery impact fund in South Africa. This is another example where private sources of financing are used for recovery measures. The fund will have a portfolio of senior debt, subordinated debt, preferred equity, listed equity and private equity....Read more »

Reuters reports on 10 June 2020 that the European Central Bank is looking into setting up a “bad bank” for the billions of unpaid loans caused by the COVID-19 pandemic. One structure under consideration would involve the European Stability Mechanism providing guarantees to the bad bank, which would issue bonds to commercial banks in exchange...Read more »

COVID bonds will play an important role in financing COVID-19 stimulus measures. All issues to date have been either general purpose bonds or use of proceeds bonds. However, a third type, performance-based bonds, has a lot of potential to address the needs of issuers. In case of COVID related sustainability linked bonds, the coupon would...Read more »

The FT reports on 16 June 2020 that the Federal Reserve (Fed) in the US announced that it would also be buying corporate bonds to support post-COVID economic recovery. This is in addition to its existing securities purchases, including US treasuries and ETFs. With these new measures, the Fed’s aim is to reassure investors and...Read more »

Several of the 126 countries participating in the Belt and Road Initiative (BRI) are calling for debt relief, including for infrastructure projects that have been hit by negative economic effects of the COVID-19 pandemic. A range of BRI projects, such as coal-fired power plants, hydropower plants, and oil palm plantations, has been criticized for their...Read more »

On June 8, 2020, the World Trade Organization Secretariat published a report on trade-related developments in relation to the COVID-19 pandemic in least-developed countries (LDCs). The economies of LDCs have been hit extra hard during this pandemic, as many rely on export-sensitive sectors that came to a near standstill (tourism, textiles, etc.), as well as...Read more »