financial sector guidance webinar january 30, 2014...julie fox-gorte pax world christopher rowe...
TRANSCRIPT
www.unepfi.org www.ghgprotocol.org
Financial Sector Guidance Webinar
January 30, 2014
Cynthia Cummis WRI & Remco Fischer UNEP FI
www.unepfi.org www.ghgprotocol.org
• Background on GHG Protocol and UNEP FI
• History of the financial sector guidance project
• Current project scope
• Role of the TWGs
• Timeline and next steps
• Q&As
Agenda
www.unepfi.org www.ghgprotocol.org
Overview of the GHG Protocol
The Greenhouse Gas Protocol was launched in 1998 by
Multi-stakeholder collaboration of businesses, NGOs, governments and others
Vision:
Empowering the world to avoid and respond to climate change through the wide use of internationally accepted greenhouse gas standards and practices.
Mission:
GHG Protocol provides the foundation for comprehensive measurement and management strategies to reduce emissions and drive more efficient, resilient, and profitable businesses and organizations.
Corporate StandardCorporate Standard
Corporate Value Chain Corporate Value Chain
(Scope 3) Standard(Scope 3) StandardProject ProtocolProject Protocol
Product Life Cycle Product Life Cycle
StandardStandard
GHG Protocol Standards
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Sector guidance is needed for the financial sector
The GHG Protocol Scope 3 Standard provides a framework for reporting emissions from lending and investing
o Barclays Capital
o Citi
o Credit Suisse
o Export-Import Bank of the U.S.
o IDB
o IFC
A financial sector workgroup was engaged in Scope 3 Standard development
o KFW Development Bank
o National Australia Bank
o PaxWorld Management LLC
o Sovereign
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Summary of scoping process:
•Broad interest in better understanding, measuring and managing financed emissions
•Broad interest in the availability of a standardized methodology for measuring and reporting financed emissions
•Understanding ‘carbon risk exposure’ is the key driver to measure financed emissions
•The nexus between ‘financed emissions’ and ‘carbon risk exposure’ is not well understood
•Complexity and cost-benefit of measuring emissions varies widely depending on financing/investment activity
Results of a one year scoping process
Is measuring and reporting emissions associated with lending and investments an important business issue?
Workshops were held in New York and London, an online survey was conducted, and UNEP FI consulted with members
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We have a number of tools in the Value Chain Standard already
• High level guidance for calculating GHG emissions from investments and lending
• List of third-party data sources to assist in emissions calculations (financial and process based data are available)
– Link to data sources page: http://www.ghgprotocol.org/Third-Party-Databases
• Calculation guidance with set of recommended methodologies for lending and investing
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Governance structure
Convening Secretariat
UNEP FI & GHG Protocol
Convening Secretariat
UNEP FI & GHG Protocol
Advisory Committee
UNEP FI & GHG Protocol, key businesses, government, accounting firms, and
NGOs
Advisory Committee
UNEP FI & GHG Protocol, key businesses, government, accounting firms, and
NGOs
Technical Working GroupsTechnical Working Groups
1. Companies &
Projects
1. Companies &
Projects 2. Governments2. Governments 3. Consumers3. Consumers 4. Cross Cutting
Issues
4. Cross Cutting
Issues5. Carbon Asset
Risk
5. Carbon Asset
Risk
Stakeholder Advisory
Group (Open to all)
Financial Institutions,
NGO’s, industry analysts,
accountants, governments,
consultants
Stakeholder Advisory
Group (Open to all)
Financial Institutions,
NGO’s, industry analysts,
accountants, governments,
consultants
Potential
Subgroups
Potential
SubgroupsPotential
Subgroups
Potential
SubgroupsPotential
Subgroups
Potential
SubgroupsPotential
Subgroups
Potential
SubgroupsPotential
Subgroups
Potential
Subgroups
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Advisory committee Advisory Committee
Member NameOrganization
Stanislas Dupre 2 Degrees Investing Initiative
Karsten Loeffler Allianz Group
Julian Poulter Asset Owners Disclosure Project
Daniel Marroquin Banamex
Kaj Jensen Bank of America
Christopher Bray Barclays
Mark Campanale Carbon Tracker Initiative
James Hulse CDP
Sabine Miltner Deutsche Bank
Chris Walker EY
Nick Robins HSBC
Tom Kerr IFC
Nathan Fabian Investor Group on Climate Change (IGCC)
Bill Harnett Local Government Super
Steve Priddy London School of Business and Finance
Julie Fox-Gorte Pax World
Christopher Rowe Prudential Investment Management
Cory Weiss PwC
Sefton Laing RBS
Richard Pearl State Street
Giorgio Capurri Unicredit
Robyn Luhning Wells Fargo
Tim Hassett WWF US
Namita Vikas YES Bank
Jochen Harnisch KWF
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Two guidance documents will be produced in parallel
TWG 1: Companies and
Projects
Chair: Eliza Eubank, Citi
TWG 1: Companies and
Projects
Chair: Eliza Eubank, Citi
TWG 2: Governments
Chair: Magnus Borelius, City of
Gothenburg
TWG 2: Governments
Chair: Magnus Borelius, City of
Gothenburg
TWG 3: Consumers
Chair: Myriam Cisneros Molina,
Sociedad Hipotecaria Federal
TWG 3: Consumers
Chair: Myriam Cisneros Molina,
Sociedad Hipotecaria Federal
TWG 4: Cross-cutting
Issues
Chair: Emma Herd, Westpac Institutional
Bank
TWG 4: Cross-cutting
Issues
Chair: Emma Herd, Westpac Institutional
Bank
Accounting Guidance Carbon Asset Risk Guidance
www.unepfi.org www.ghgprotocol.org
Four principal objectives of the accounting guidance
1. Provide a credible and internationally-harmonized GHG standard for financial intermediaries (FIs) to measure, report, and track performance
4. Guide the external readers of reported information on how disclosed information can and cannot be meaningfully used
2. Guide FIs on the internal interpretation and use of the data
3. Create an understanding of how financed emissions are linked to carbon risk exposure
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Four principal objectives of the Carbon Asset Risk (CAR) guidance
1. Identify the types of financial risks that can result from the GHG emissions / intensity / exposure of ‘carbon assets’ - projects or companies with high exposures to present and future GHG emissions
2. impact future business decisions or investments in carbon assets --projects or companies with high exposure to GHG emissions
4. Provide guidance on effective and appropriate strategies that financial institutions and investors could pursue to manage potential risk
3. Provide actionable approaches to help financial institutions and investors evaluate the presence and degree of potential risk associated with carbon assets
2. Provide insight on how these risks are typically distributed across different types of capital associated with a carbon asset
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Structure of the accounting guidance
PART I: General Information
PART IV: Governments
PART VII: Interpreting Data
PART II: Key Accounting Concepts
PART V: Consumers
Appendices
PART III: Companies & Projects
PART VI: Tracking & Reporting
Notes
1. Introduction2. Business Goals3. Accounting & Reporting
Principles4. Accounting & Reporting
Recommendations
5. Key Concepts6. Collecting Data
7. Accounting Guidance by Investment and lending type for companies and projects
8. Accounting Guidance by Lending Type
9. Accounting Guidance by Lending Type
10.Setting GHG Reduction Targets and Tracking Emissions Over Time
11.Developing & Using Performance Metrics
12.Reporting Guidance
13.Data Interpretation by Internal Users
14.Data Interpretation by External Users
15.Avoided Emissions (inclusion TBD)
16.Potential Future Emissions from Fossil Fuel Reserves (inclusion TBD)
17.Abbreviations18.Glossary19.References20.Recognitions
TW
G 1
TW
G 1
TW
G 2
TW
G 2TW
G 3
TW
G 3
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Structure of the CAR guidance
Phase 1Phase 1
Phase 2Phase 2
Introduction, Objectives
and Scope
Mapping an asset’s
sources of capital (i.e.,
the “capital stack”) and
discussion of how risk is
typically distributed
across different types of
capital
Types of potential risks
associated with carbon
assets
Key factors to consider
when assessing the
presence and degree of
potential risk associated
with carbon assets
Mapping the carbon
intensity of different
sectors and identifying
those that are most
exposed to potential risk
Approaches that
financial institutions and
investors can use to
evaluate potential risks
associated with carbon
assets
Strategies that
financial institutions
and investors can
pursue to manage
potential risk
Mining, Oil and Gas, Power, etc.
Part 1 Part 2 Part 3
Part 4 Part 5 Part 6
Part 7
Sector based guidance
www.unepfi.org www.ghgprotocol.org
Date Project Phase
Feb 2014 Launch TWG Process
Sept 2014 First drafts completed
Oct – Feb 2015 First public comment phase and road testing
Mar – May 2015 Review comments and revise draft guidance
Jun – Jul 2015 Second public comment period
Aug – Oct 2015 Final round of revisions based on feedback, review and sign off
Nov – Dec 2015 Copy editing, design and publication
Jan 2016 Publication
Jan 2016 onwards Outreach
Project timelines
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Roles and responsibilities of TWG’s and next steps
• For the set of technical accounting issues designated to the group:
• Review relevant existing methodologies and practices;
• Analyze the issues and challenges; and
• Develop recommendations around content of guidance
• Draft sections of text on the designated topics and review draft text at
frequent intervals
• Seek and respond to feedback on draft chapters from the Advisory
Committee and public comment process
Responsibilities
Technical working group members are requested to make a two year
commitment to participate in the guidance development (i.e., early 2014 –
late 2015). This is expected to involve:
•2 conference call of 90 minutes each per month in 2014 and occasional calls
in 2015
•1 in person meeting in 2014 and 1 in person meeting in 2015 (if needed)
•The necessary time to prepare and review materials (5-10 hours per month
in 2014)
Commitments
You will be hearing from your TWG Chair soon with details on your first call (likely mid Feb)
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Thank you for your participation!This effort would not be possible without your support
Cynthia Cummis WRI
[email protected] Fischer UNEP FI
www.unepfi.org www.ghgprotocol.org
Q&A