Our work with the financial system includes work with leaders in the global banking, insurance and investment industries as well as Central Banks and financial regulators around the world.
Through CISL’s work with our Banking Environment Initiative, we help the banking industry understand how environmental and social risks are influencing the performance of key customers such as food and agricultural companies, energy companies and energy intensive manufacturing companies. This enables banks to identify changes in their own business practices, including new product development. In China, encouraged by the China Banking Regulatory Commission, we have been working with leading Chinese banks and Chinese commodity importers to explore how international best practice on the integration of social and environmental factors into trade finance practices can be adapted for use in China’s international commodity trade and investment activities. This work has taken a particular focus on agricultural commodities as a starting point.
Our work with the insurance industry focuses on climate change and is delivered through the insurance industry leadership group, ClimateWise. We help leading insurance companies to improve their understanding of climate change risk and then identify actions that they can take to help reduce the overall risks of climate change that society faces. In 2015, CISL was asked by the UK Prudential Regulation Authority to design a series of industry workshops to inform the regulator’s ground-breaking study the implications of climate change for the insurance industry. The learning from this process is transferable to other markets around the world.
Our work with the investment industry focuses on identifying investment practices that can deliver value for investors and society in the long term. Together with major asset owners and asset managers from around the world, we have published cutting edge tools to help investors calculate the impacts of climate change on their portfolios. We have developed an innovative methodology to allow investors to measure the impact of their investments compared to the Sustainable Development Goals and report that impact to their customers.
Finally, we are the Knowledge Partner to the G20 Green Finance Study Group, chaired by the People’s Bank of China and Bank of England. Our focus is on environmental risk analysis in financial decision-making. Drawing on the insights we have developed from our global stock take of leading practice in the financial sector on this issue, CISL recently provided international expertise to ICBC as it developed its first ‘environmental stress test’.