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Sustainable finance: How can we create a finance system that incentivises and rewards long-term thinking?

It is widely recognised that today's financial system does not actively reward long-term thinking. Often, it can actually work against efforts to build a sustainable economy.

CISL’s Centre for Sustainable Finance is a research, education and practice hub on financial market reform to help governments, financial institutions and businesses build a sustainable financial system. Its work is underpinned by insights from CISL’s finance sector business groups, made up of leaders from over 50 financial institutions across five continents.

ClimateWise (global insurance)

ClimateWise comprises 29 leading insurers, reinsurers, brokers and industry service providers who share a commitment to reducing the impact of climate change on society, as well as the insurance industry.

Banking Environment Initiative

Some of the world’s largest banks working to lead their industry in directing capital towards environmentally and socially sustainable economic development.

Leading investment managers and asset owners with over US $5 trillion under management working to help shift the investment chain towards responsible, long-term value creation.

 

Featured

Investing for Resilience 

Environmental_risk_analysis.pngTraditional response to rising levels of risk – to re-price, withdraw or transfer exposure to others – will always remain a central feature of how insurance manages its risk pools. However, society will struggle to reduce the climate risk protection gap – the growing divide between total economic and insured losses – if the insurance industry’s response to climate change is limited to avoiding, rather than managing the risk. Managing societal resilience to climate change will therefore become more important as exposure intensifies.

In response, ClimateWise’s Societal Resilience Programme, of which this study is part, brings ClimateWise members together with a range of stakeholders to identify actionable solutions for how the insurance industry can support society’s transition to a zero carbon, climate-resilient economy. It explores this via the industry’s investment activities.

 

Read more.

 

Thought leadership

Taking the long view: A toolkit for long-term, sustainable investment mandates

May 2016 – Short-termism in financial markets has been widely identified as a cause of underinvestment, economic inefficiency and poor decision-making by corporations, that undermines long-term value creation. This report provides a toolkit for investors who wish to design investment mandates that can help shift the investment chain towards responsible, long-term value creation.

Taking the long view: A toolkit for long-term, sustainable investment mandates - Read More…

Feeling the heat: An investors’ guide to measuring business risk from carbon and energy regulation

May 2016 – The COP 21 climate agreement indicates a growing global consensus for action on climate change. In response, this research report assesses the impact of future carbon- and energy-related regulation on the most sensitive industries and geographies at a company level.

Feeling the heat: An investors’ guide to measuring business risk from carbon and energy regulation - Read More…

Incentivising the trade of sustainably produced commodities

April 2016 – This discussion paper explores how to scale up the role that banks can play in supporting the shift towards sustainable soft commodity supply chains.

Incentivising the trade of sustainably produced commodities - Read More…

The Paris Climate Agreement: Implications for banks, institutional investors, private equity and insurers

February 2016 – This briefing paper provides analysis of the most pressing points of the Paris Agreement, and other key developments from the climate summit, and concludes that a coherent, strategic response is required of financial institutions.

The Paris Climate Agreement: Implications for banks, institutional investors, private equity and insurers - Read More…

Climate change: Implications for superannuation funds in Australia

January 2016 – New study from our Master of Studies in Sustainability Leadership, supported by asset manager Colonial First State Global Asset Management, highlights member interest in superannuation fund climate exposure.

Climate change: Implications for superannuation funds in Australia - Read More…