Hans Stegeman

Developed countries should treat climate-related financial support for developing countries as “an act of economic self-interest” and not a moral obligation. Patrick Bolton and Alissa M. Kleinnijenhuis' latest policy brief has been mentioned in the Financial Times' Moral Money newsletter: https://lnkd.in/e6UgvdVY Imperial College Business School, Imperial College London #COP29 #ClimateFinance #FT

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Thanks to Dick van Ommeren from Triodos Investment Management for this reflection - I'm happy to share a summary and quote Dick, because it's simply so true: "I believe that #impactinvesting is the true path to fostering genuine, transformative #change . Unlike #sustainable or #ESG investing, which often lacks depth and can mislead, #impact investing prioritises #intentional, positive outcomes. It's crucial to thoroughly understand where our #investments go and ensure they align with our #values and the future we want to create." It's high in time to shift our focus to making a real difference! #ImpactInvesting #SustainableFinance #PositiveChange #greendeal #transition #SFDR #esginvesting #change https://lnkd.in/gQf5C-YE

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Reporting on biodiversity under ESRS and TNFD - Robeco Netherland-based asset manager Robeco started a project to get ready to report in compliance with #ESRS by financial year 2025. They apply the #doublemateriality principle in preparation for the implementation of ESRS in their 2023 integrated report. In line with ESRS requirements and the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations, they assessed how much of their AuM at the end of 2023 was invested in sectors with a high or very high #impact and #dependency on #nature. Based on the assessment, 45% of their AuM was invested in sectors with a high or very high impact and 19% of their AuM in sectors with high or very high dependencies. The results confirmed that biodiversity is a material topic for their investments. SECTOR EXPOSURE Robeco started with a heatmap assessment using ENCORE data to understand the exposure of its investments to sectors with a high impact and dependency on nature and ecosystem services. 📌 Impacts First, they calculated the median sector footprints of all sectors based on data obtained from an external data provider (Iceberg Datalab) and ranked them from high to low. Second, in some cases, they adjusted the ranking based on their knowledge of the sector and alignment with external organizations. 📌 Dependencies They classified sector dependencies on nature using the ENCORE tool. Applying a precautionary principle approach, they applied the highest dependency from the various types of dependency. Focusing on about a dozen sectors provides 70-80% of the impact and dependencies that need to be managed from an investment perspective, Robeco Climate & Biodiversity Strategist Lucian Peppelenbos said at a TNFD webinar. Zooming in on those sectors, you need to understand what drives impacts and dependencies and how companies are mitigating them. “If you look at certain industries, like for example the #chemical sector, without looking at #pollution, you are not making a well-informed investment decision.” These sectors are subject to #transitionrisks and #physicalrisks, which need to be understood and managed during the investment process. COMPANIES The real challenge is to go beyond sector-level insights toward understanding nature risks at the issuer level. “We invest in about 5,000 companies and for many of those, #biodiversity risk, nature risk is material.” Robeco has a biodiversity framework to help understand how these companies manage their nature-related issues. They cluster companies into four groups: 1. Solution providers: providing solutions for halting and reversing nature loss 2. Transition leaders:  leading the transition in their sector 3. Improvers 4. Laggards: exposed to nature risks, but don't understand and manage them properly “For us, this type of information is decision-useful. However, it depends on a lot of #data for which we need TNFD and the ESRS disclosures.” Candice Dott

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Climate litigation works! 💠 Climate lawsuits are increasingly used to push governments and corporations for more decisive climate actions. 💠 Landmark cases, like those against the Dutch and German governments, have led to significant policy changes and commitments to reduce greenhouse gas emissions (and the same might happen because of the ruling last week (https://lnkd.in/eEAgp8nq). 💠 Even when climate lawsuits fail, they can raise public awareness and influence future legal and policy outcomes. 💠 Litigation against corporations often results in financial repercussions and motivates better environmental disclosures to avoid reputational damage. 💠 Future climate litigation will likely focus on compensation for climate-related damages and ensuring governments meet their commitments to mitigate climate effects. I think it would be better if governments and companies respected our laws and that litigation was unnecessary. However, since it is clear that this is not the reality that we live in, I am grateful that we have NGOs, activists, and citizens who go to court. https://lnkd.in/ew8Sztpm

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Our economic and financial systems are built on the assumption of constant growth. But at what cost? Speed-Read Pathways to Post-Growth by Triodos Investment Management will give you the answer. Full article: https://lnkd.in/g7bkmUni 1. Problem of constant growth 🌵Our economic and financial institutions are based on the premise of constant growth. 🌵This leads us to use more and more resources. Biodiversity loss and climate change are consequences of this. 🌵Scientists have identified that we are exceeding 6 out of 9 planetary boundaries. 🌵Growth cannot last forever on a planet with finite resources. 2. Post-growth as a solution 🌴 To meet this reality, some economists are looking to achieve a post-growth economy: a system that can survive and thrive without the need for constant growth. 🌴 This involves a temporary degrowth period of the global economy, led by developed nations. Once the global economy has achieved a sustainable level of resource use, it would aim to maintain that level and size. 3. Pathways to a sustainable economy 🌱Prioritize solidarity and sufficiency - Stop overconsumption in wealthy nations. - Redistribute income and wealth - Enact policies that support security of basic needs (food, shelter, water, transportation). 🌱Supply shift - Shift towards a circular economy, reducing waste. 🌱Demand shift - Reorient to prioritize experiences over material possessions. - Redirect economic activity away from high-emission sectors like manufacturing, electricity and gas, agriculture. - Direct economic activity towards sectors promoting well-being: healthcare, education, food services, recreation, arts. 🌱Leisure shift - Prioritize leisure time over working time. Shortening the work week and providing sufficient wages make this possible. - People with more leisure time are shown to prioritize experiences more. 🌱Change business - Change business structure to reduce the pressure to maximize profits. - Use aternative ownership structures like cooperatives and steward-owned companies that spread power among multiple stakeholders 🌱Post-growth finance - Finance should be connected to real financial outcomes; focus on investing in real economic activity - Financial activities should create ‘useful’ value, not just a financial return. #Sustainability #PostGrowth #CircularEconomy #EnvironmentalImpact #Degrowth #EconomicTransformation #TriodosInvestment

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Great article from Dick van Ommeren of Triodos Investment Management (one of the global leaders in impact investing) on why we need to stop ESG Investing and Sustainable Investing and funnel more resources into Impact Investing. Impact Investing, ESG Investing and Sustainable Investing often get lumped together but the differences are significant. As van Ommeren explains, Impact Investing "looks to the future and actively seeks to create and accelerate positive change" while ESG and Sustainable Investing "looks backward and evaluates corporate behaviour." #ImpactInvesting #ImpInv

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In a new DNB working paper with Dirk Broeders and Niek Verhoeven, FRM we look into the potential that climate-linked bonds offer - In this paper, we introduce a novel financial instrument, climate-linked bonds, whose payoffs are adjusted based on climate-related variables (e.g., temperature, climate emissions, water levels, etc.), enabling investors to hedge against long-term climate risks. - We argue that climate-linked bonds issued by governments or supranational organizations are critical for transitioning to a net-zero economy, signaling governments’ commitment to climate action, aligning financial incentives with climate policies, and fostering robust early-stage measures against climate risks. - In a stylized model of supply and demand for climate hedging, we establish the factors that drive the pricing of these bonds in equilibrium and estimate that, on average, around three percent of outstanding government debt in large economies could be converted into climate-linked bonds. - These instruments have the potential to reduce the information, incentive, and insurance gaps in climate risk, thus aiding the management of climate risks while aligning public and private sector interests. More in the link on SSRN https://lnkd.in/dUP7eGzx

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"Our research shows that climate finance for emerging and developing economies is not charity, but hard-nosed economic self-interest." 🌎 Alissa M. Kleinnijenhuis spoke to the Financial Times about how climate finance at scale is needed to tackle global emission. Read the full article 🔗 https://imprl.biz/3SEVvwa #ClimateFinance #ClimateChange

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Update from Alissa M. Kleinnijenhuis at COP 29 ⇢ COP29 revolves around setting a New Common Quantified Goal (NCQG) of Climate Finance. Whether an at-scale NCQG can be agreed upon will be pivotal for the global climate outcome, and therefore for humanity. On Friday the final decision will be made. Read the new paper 'COP29: The Economic Case for a New Common Quantified Goal of Climate Finance (NCQG) at Scale' authored by Patrick Bolton Imperial College London and Alissa M. Kleinnijenhuis Cornell University ⇢ https://lnkd.in/epbgdZgh

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News in the right direction! 💚 Netherlands-based banking group ING says it will no longer offer finance to oil and gas companies for exploration or development of new fields, as part of the bank's 2024 Climate Progress Update, and it will restrict financing to companies that fail to show willingness to reduce their carbon footprint by 2026. Source: MSCI Carbon Markets and https://lnkd.in/d3FYGjQj #climate #fossilfuels #sustainability

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ESG Economist - Five climate challenges in Dutch climate sectors On 31 December 2030, there will be a climate balance sheet to see which EU climate targets we have achieved and which we have not. This leaves just over six years to go, which is relatively short to achieve all climate ambitions. To get close to the 2030 climate target, both the private and public sectors must take meaningful climate action to reduce greenhouse gas emissions faster. In this analysis, we try to answer the question of what this path to that 2030 climate target looks like for five climate sectors: industry, agriculture, mobility, built environment and electricity. Among other things, we show how feasible the 2030 target is for the different climate sectors. We do this by providing insight for each climate sector into the path towards 2030 and the biggest climate obstacles that need to be overcome. The reason we outline these trajectories and the challenges for each climate sector is to give our customers and stakeholders a better picture of how realistic the climate targets are currently. This insight helps to better understand and follow the trajectory, but most importantly, to make clear what should be tackled in the coming years to reach the climate targets. https://lnkd.in/eKu3S3wi

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Another very insightful article by Thijs Geijer. 5 lessons learned from Southern Europe's climate change response in the agri sector: - Climate change, crop volatility and crop yields: it’s not all doom and gloom - Farmers do what they can to make their land climate-resilient - Heat and drought push some production to more suitable areas - Imports serve as a backup when extreme weather hits domestic supply - Rising temperatures change consumption patterns https://lnkd.in/ggjqjCRc #climatechange #adaptation #foodsystem

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The article by Marceline B. and Gerben van der Marel in Het Financieele Dagblad about the "3D" investing at PGGM Investments (namely risk, return and sustainability) reminded me of an article I wrote sometime back about how we need independent accountability of folks claiming to go #NetZero and self-appointing themselves to determine the outcome (which is a huge governance issue that De Nederlandsche Bank Netspar and AFM are totally conflicted in ensuring). Here is a simple measure that I hope some academic like Rob Bauer or others can implement to hold these folks accountable to the vacuous claims they make! H/t Anton Kramer for the data - all errors are mine, but hopefully some folks at Net Zero Investor or Pensions & Investments etc can implement and hold folks accountable. Feel free to critique/improve as no pride in authorship https://lnkd.in/gqbHMNBJ Martijn Vos Alfred Slager Sijb Bartlema Roland van den Brink Paul Boerboom Else F. Bos Henriëtte Prast Sebastien Betermier International Centre for Pension Management

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We should stop sustainable investing, argues Dick van Ommeren, Chair of the Management Board at Triodos Investment Management. Why? Because the words ‘sustainable’ and ‘ESG’ in fund names do not necessarily equate to value creation or problem solving. "Those who truly want to drive enduring transformative change for future generations, I encourage to do in-depth research to better understand ‘what’s under the hood’ of ‘sustainable’ and ‘ESG’ funds and to draw their own conclusions, which I hope will be to stop sustainable investing and to instead start investing with the aim of contributing to authentic and enduring transformative change that the world needs." Read his his column on our website. #ImpactInvesting #ESG #SustainableInvesting #TransformativeChange #ChangeFinance

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🌱 Aligning with True Transformative Change 🌱 We at Tejomay Green Energies wholeheartedly agree with Dick van Ommeren, Chair of the Management Board at Triodos Investment Management. Simply labeling investments as ‘sustainable’ or ‘ESG’ doesn’t necessarily equate to real value creation or problem solving. Those who truly want to drive enduring transformative change for future generations should dive deep into understanding the true impact of their investments. It’s time to move beyond surface-level sustainability and invest in authentic, transformative initiatives. At Tejomay, our focus is on grassroots-level change. We are dedicated to creating circular economies and green villages in rural areas. Our vision is to develop self-sustainable clusters of villages that support each other. Here’s how: 🌾 Agri-Waste to Bio-CNG: Converting agricultural waste into bio CNG. ♻️ Sustainable Farming: Using by-products from CBG production to enrich agricultural land, promoting organic farming. 🐄 Dairy Integration: Including dairy farming in the loop to complete the food chain and produce healthy food. Sustainability is not about forcing changes but about finding and addressing root causes to create a truly sustainable future. #ImpactInvesting #ESG #SustainableInvesting #TransformativeChange #ChangeFinance #CircularEconomy #GreenVillages #TejomayGreenEnergies

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Global climate change has local ramifications. This is particularly so in the case of The Netherlands. Sandra Phlippen ABN AMRO Bank N.V. ABN AMRO Economisch Bureau discusses how climate change affects the Dutch housing market through three channels of impact: physical climate risks, climate adaptation, and climate mitigation➡️https://lnkd.in/e_s_RE6R #economics #climatechange #housingmarket

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🌱💼 Exciting Opportunities in Emerging Markets: Harnessing Nature for Sustainable Growth 💼🌱 The recent surge in prices of essentials like rice, sugar, and cocoa due to climate change effects underscores our dependence on nature for sustenance. As ecosystems face depletion, businesses and investors are reevaluating their approach towards nature. Emerging markets present unique opportunities for impactful investments, particularly in integrating sustainability measures. Companies aligning with natural processes or leveraging ecological wisdom offer significant green investment prospects. While established markets in Europe and America attract green investment, smaller enterprises in emerging markets often struggle to access funding. Integrating conservation into business models not only safeguards ecosystems but also enhances long-term profitability. The challenge lies in enabling accessibility for smaller enterprises in emerging markets. The Just Sustainability Transitions (JuST) Institute aims to address this by enhancing transparency for investors. Collaborating with global institutions like GEF, IFAD, and BNP Paribas, JuST has developed a robust methodology to measure the impact of financing, ensuring accountability and clarity for investors. Jason Spensley from GEF emphasizes the importance of accessible financing in bolstering climate resilience and empowering communities. By embracing sustainable practices and fostering financial inclusivity, we can drive positive change, safeguard biodiversity, and fortify communities against climate risks. Join us in reshaping finance for a greener, more resilient future! #Sustainability #GreenInvestment #EmergingMarkets #ClimateResilience #BiodiversityProtection #FinanceForGood

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Analyzing Sustainable Investor Returns This paper investigates whether sustainable investors earn different returns compared to non-sustainable investors. Authors: Jean-Paul van Brakel, Joop Huij & Georgi Kyosev Read more: http://spkl.io/6049fjkpX

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