Equities

Asset Pools : Equities

The world’s equity markets have historically been the primary source of risk capital, - around 45,000 companies have a total listed market capitalization of about US$70 trillion. In addition is the US$20 trillion in property portfolios, the privately held portion of the US$35 trillion in infrastructure assets and the US$4 trillion in private equity and venture capital. Four key areas for aligning equity markets with sustainability are:
  • Sustainability disclosure: Harmonizing and strengthening stock market requirements for reporting on environmental performance and risks.
  • Deepen the use of sustainability data by investment analysts and in benchmarks and indices by encouraging greater transparency in both equity analysis and indices.
  • Upgrade the capital-raising function of equity markets for example by reducing the registration costs for ‘green IPOs’ and ensuring regulations enable innovative, infrastructure investment vehicles such as green infrastructure investment trusts (yieldcos).
  • Mobilize more private capital into infrastructure. Review financial regulations to remove unintentional constraints on investments in sustainable infrastructure. Optimise “blended finance” approaches to ensure that good value is obtained for public spending, and to develop best practice and expertise.

Inquiry Publications

  • Aligning the Financial System with Sustainable Development in the United States of America

    Date: 01-Feb-2016

    The US financial system is undoubtedly among the largest, most innovative and most sophisticated in the world. It is also clear that this is both a benefit and an impediment to non-governmental investment in sustainability and inclusiveness. To date, the actual investment in infrastructure and sustainability does not meet current needs, especially those related to maintaining

  • Indonesia Country Report

    Date: 30-Apr-2015

    Placing Indonesia’s economy onto a green and sustainable development pathway, as envisaged in the National Long Term Development Plan, will require a large mobilization of investment. Estimates of the annual investment needed are in the order of US$300‐530 billion, with a large portion of this investment needed in critical infrastructure, as well as environmentally sensitive

  • The Environmental Risk Disclosure Regime

    Date: 06-Jul-2015

    In recent years, a plurality of different governance initiatives has emerged that are designed to expand the disclosure of environmental risk within financial markets. There is evidence for policy convergence among different initiatives but it lacks the enforcement necessary for coherence, and contributes to uncertainty within the financial sector over the impact of environmental risk. This uncertainty justifies an expanded role of international

  • 3rd Update Report: Pathways to Scale

    Date: 07-Jan-2015

    This is the 3rd Update Report of the UNEP Inquiry, it is focused on the challenge of financing the low-carbon transition. It explores how innovative ideas and practices can be made more effective, adopted more widely, and taken to scale—and as a result move the trillions that are required. Scaling-up proven but limited innovations, is a common

  • Stock Exchanges and Sustainability

    Date: 23-Dec-2015

    Stock exchanges have historically played an important role in economic growth and development through enabling effective capital allocation. However, exchanges and markets more broadly have changed over time, in structure, inter-connectedness and rate of activity. This has happened against a backdrop of growing recognition of the unsustainability of the current economic growth path in both

  • China Green Finance Task Force Report: Mandatory Disclosure

    Date: 02-Apr-2015

    This paper makes the case that compulsory disclosure of environmental information by listed companies and bond issuers is an effective measure to increase the sense of corporate social responsibility, improve corporate environmental performance, incentivize investors to refrain from polluting investments and strengthening green investments. It recommends: CSRC and stock exchanges formulate rules on compulsory environmental

  • China Green Taskforce Report: Green IPOs

    Date: 02-Apr-2015

    Developing innovative and growing green industry sectors in China depends on broadening funding source beyond government loans to capital markets. One of the major bottlenecks for entering the stock market for Chinese green enterprise today is the slow IPO process. The paper recommends that the CSRC simplify the IPO review and approval processes for green enterprises, in particular by: Develop a green

  • China Green Finance Task Force Report: Stock Index

    Date: 02-Apr-2015

    Traditional energy and other highly polluting industries account for a significant share of China’s major stock indices, meaning that passive investments based on stock indices encourage investment polluting industries. Creating green stock indices (stock indices with a significant share of green enterprises) is an international practice to increase the share of green investment by institutional

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