Asset Pools : Institutional investment
- Align the design of pension and other investment systems with sustainability. Clarify fiduciary law and guidance and requirements for the skills and capabilities of fiduciaries. Build consumer literacy and require that funds report on sustainable performance and policies.
- Resetting market and public incentive structures would help stimulate demand for sustainable investment products. Market codes can encourage asset owners to align incentives down the chain, notably for investment consultants, asset managers and investment analysts. Policymakers could review the effective use of fiscal incentives for saving to drive long-term finance for the real economy.
To date interventions to promote the environmental and social dimension of investment have focused principally on disclosure of policies and formal statements of legal duties. They have largely taken fundamental features of the design and operation of the financial system as given. This paper makes the case for a more systemic and dynamic approach. It argues
An efficient and resilient regulatory regime must not only deal competently with the financial system that exists currently; it must also have adaptive capacity to deal competently with the system that is emerging. This working paper examines disruptive innovations and their implications for the design of a green and inclusive financial system. It identifes five trends relevant
This working paper presents an overview of Lender Environmental Liability (LEL) and Investor Environmental Liability (IEL) regimes and issues. Environmental harm and degradation is often irreparable. Therefore, our assumption is that precaution is the main objective of any international and domestic environmental legal regime. The paper explores the conditions under which LEL/IEL can be effective
A variety of interventions can be used to develop national financial systems and provide local access to affordable, long-term finance. This paper considers four key categories of actions: voluntary action; priority sector lending; regulatory or financial incentives as well as direct lending by policy-driven financial institutions. It particularly focuses on the role of policy-driven institutions such
Infrastructure is often referred to as the backbone of the global economy and plays a fundamental role in societies by enhancing the quality of life and increasing productivity. In addition to its effects on society and the economy, infrastructure can have significant impacts on the environment, depending on the choice of infrastructure. Approximately 75% of
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
This paper provides an outline of South Africa’s financial sector, the environmental and social issues it faces, the response of government and financial regulators and the extent to which has resulted in measurable sustainable investment flows. In South Africa environmental, social and governance (ESG) considerations appear on the agenda of strategic discussions and are part of the
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
This paper sets out the case for promoting the development of green industry funds as public-private partnerships (PPPs) to use limited government funding to leverage private capital into green sectors. It is envisaged that green industry funds will serve as the platform through which private capital can converge into professionally managed green investments with government as one investment
Financial institutions today are unable to measure their exposure to climate change. There are equally no approaches to inform on the alignment of their investment strategies with national or international environmental goals. This report outlines international developments in measuring and managing climate related risk in instituional investment and banking. It outlines implications for regulators in
- A Legal Framework for the Integration of Environmental, Social and Governance Issues Into Institutional Investment
Asset Management Working Group (2005). Geneva: UNEPFI.