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Decarbonise the global economy

CISL and the BEI work towards decarbonising the global economy by pioneering green finance vehicles and capacities to accelerate and scale financing into low carbon business models and assets. We also encourage financial institutions to integrate physical, transition and liability risks and impacts into their financing decisions.

Our current research project:

Client Engagement: Reshaping the bank-client relationship to accelerate the transition to a net zero economy

The current bank-client relationship model is not fit to engage with the client on transition plans as knowledge, time and standardised questions and topics to ask are not clear. Currently, both finance and the real economy lack robust climate-related approaches with which to design and execute transition plans, assess decisions and monitor progress. Therefore we have set up a new project called Client Engagement, where we will develop a web based tool for banking Relationship Managers to support them in their clients conversations. The tool will be published in spring 2021.

We continue to pursue this objective with our members through ongoing research and collaborations. Please do read and share our past publications:

Moving to a sustainable economy is the challenge of our time. Ever-increasing greenhouse gas emissions are warming the planet, changing the climate and threatening human life.

The Bank 2030 project set out to explain how banks can accelerate the financing of the low carbon economy and, by doing so, sought to articulate a vision for a climate progressive bank. The research and analysis involved a literature review, over 100 interviews with banks and stakeholders and guidance from an Expert Steer Group. The final report, published in January 2020, detailed the organisational changes, financial instruments and 'real economy' opportunities that banks can focus on.

View report and webinar. 


Policy briefing Financial largeBanking and Sustainability: Time for Convergence

Since the financial crisis in 2008, the prominence of environmental risks on the policy and regulatory agendas has increased and continues to build momentum. Recognising the need for independent review, the BEI partnered with UNEP FI in 2014 to consider the ways regulators might respond to environmental risks, policies and regulation.

The resulting study, supported by Bloomberg and authored by Professor Kern Alexander, Faculty of Law, University of Zurich and CISL Fellow, assesses the links between systemic environmental risks and financial stability. A subsequent policy briefing on the links between financial stability and environmental sustainability was put together in 2015. CISL has continued to work with regulators as efforts to understand and manage climate-related financial risks evolve.

Read more about the report


 

Further CISL research contributing to decarbonising the global economy


Virtual investment experiment indicates informed consumers choose sustainable funds even with reduced returns

22 October 2019 – A new study has shown that when given clear social and environmental performance data, consumers display an appetite for sustainable investment even with lower returns.

Virtual investment experiment indicates informed consumers choose sustainable funds even with reduced returns - Read More…

Physical risk framework: Understanding the impact of climate change on real estate lending and investment portfolios

22 February 2019 – The ClimateWise Physical Risk Framework demonstrates how the expertise and tools of the insurance industry can support other parts of the financial system to understand their physical risk exposure.

Physical risk framework: Understanding the impact of climate change on real estate lending and investment portfolios - Read More…

Measuring investment impacts

The Investment Leaders Group (ILG) has developed an original framework to allow the industry to quantify investment impacts. Our aim is to enable a ‘revolution’ in consumer choice in financial services. This means making the social and environmental impacts of investment transparent to financial consumers in the same way that health and other concerns are apparent to food consumers today.

Measuring investment impacts - Read More…

Environmental risk analysis by financial institutions – a review of global practice

September 2016 – The G20’s new Green Finance Study Group asked the Cambridge Centre for Sustainable Finance to serve as Knowledge Partner and make recommendations on how to integrate environmental risk into mainstream financial decision-making.

Environmental risk analysis by financial institutions – a review of global practice - Read More…

Unhedgeable risk: How climate change sentiment impacts investment

November 2015 – This report analyses how shifts in market sentiment induced by awareness of future climate risks could impact global financial markets in the short term.

Unhedgeable risk: How climate change sentiment impacts investment - Read More…