unepfi July 2010

www.unepfi.org July 2010

The Copenhagen Agreement and Finance Issues- What are the Implications for Business?

The Private Sector’s Role in Climate Change

Who We Are

What We Do

UNEP FI develops global standards, guidelines and best practice approaches to sustainability for financial institutions worldwide

United Nations Environment Programme Finance Initiative

UNEP FI is a unique public-private partnership between UNEP and the global financial sector

Over 180 banks, insurers, asset managers and pension funds comprise the partnership with UNEP.

July 2010

Structure of presentation

1. What the world – in a climate change context - wants from: the private sector generally the private financial services sector and capital markets in

particular

2. What is it that investors and financial institutions want?

3. How can policy - particularly at the international level - move investors and lenders to do what the world wants from them?

3. How can policy - particularly at the international level - move investors and lenders to do what the world wants from them, in developing countries?

1. What the world – in a climate change context - wants from:

the private sector -

Source: UNEP SEFI, 2009

The technology innovation continuum:

85%

1. What the world – in a climate change context - wants from:

lenders and investors

2 °C, 450 ppm

$ 530 billion

Global new Investment in Sustainable Energy, USD billionsThe technology innovation continuum:

2. What is it that investors and financial institutions want?

The institutional investment value chain

Fiduciary duty

Risk + return

3. How can policy - particularly at the international level - move investors and lenders to do what the world wants from them?

1. Risk down or Return up

2. Long-term reliability

4. Special risks in the developing world – special solutions as suggested by UNEP Finance Initiative

3. How can policy - particularly at the international level - move investors and lenders to do what the world wants from them?

Why do we need an international deal?

• The need for scale in light of competitiveness and political issues at domestic level

• Environmental credibility by avoiding leakage

What do we have now at international level?

• BINDING TARGETS (5.2% of aggregate Annex-1 emissions) but too little and many countries not on track

• INCENTIVE MECHANISMS in place but insufficient

•LONG-TERM RELIABILITY?

2012.