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24/11/2022
Climate Report
Implementing prudential transition plans for banks: what are the expected impacts?
The European Union has made rapid progress on the issue of transition plans for companies and banks. First of all, the CSRD directive obliges each listed company to publish its plan for achieving carbon neutrality by 2050. Published by EFRAG this summer, the standards set for these plans can be considered ambitious and commensurate with the challenges they face. With regards to banks, it is now clear that they will be required to publish their transition plan. What remains under debate is whether these transition plans should be integrated into prudential regulations, which would open the way to numerous possibilities of action and sanctions by supervisors.
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18/11/2022
Foreword of the week
COP27: let us remember the obvious about climate finance
As COP27 draws to a close, let us remember the obvious: implementing the Paris Agreement will require financial flows from developed to developing countries. However, these flows are not just the much discussed $100 billion a year promised by the nations of the North to their counterparts in the South - a promise that has not been kept to date. And they are not just about budgetary flows either. More fundamentally, the architecture of development financing - or at least its climate component - needs to be reviewed in depth. It is therefore primarily the mission and modus operandi of the multilateral banks, and more broadly of the public development banks, that must be reviewed.
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10/11/2022
Foreword of the week
COP27: the importance of national financing strategies for the transition
This year again, expectations for the COP are high regarding developed countries’ commitments towards the funding of action against climate change and its impacts. The question of loss and damage, which pertains to questions of climate justice and of who should pay for the significant impacts of climate change endured by the poorest countries, has just been added to the official COP agenda. And climate finance will again be a hot topic: the pledge made back in 2009 by rich nations to channel US$100bn every year by 2020 to help less wealthy nations mitigate the rise in temperatures and adapt to climate change is still falling short of targets.
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09/11/2022
Climate Report
The economic implications of the transition to a low-carbon and resilient economy: an LTS dashboard for Finance Ministers
Long term national climate strategies, such as Long-Term Strategies (LTS) published to the UNFCCC, are key documents developed by governments to envision the transition to a low-carbon and climate resilient economy at the 2050 (or later) time-horizon. As of the beginning of COP 27 in Sharm-el-Sheikh, Egypt, on November 2022, 55 countries had submitted an LTS to the UNFCCC, answering renewed calls for countries to develop such strategies at COP 26. It is expected that additional LTS will be published shortly.
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04/11/2022
Foreword of the week
COP27: A new journey for Development banks
In 2022, the G20 raised a key question: are development banks well equipped to deliver their mandate and lead the way to a more sustainable development, in a world faced by multiple crises? Multilateral development banks (MDBs) and development financial institutions (DFIs) business model was historically developed around project financing. But they now need to shift to supporting the transition of their counterparts: country governments, ministries, financial regulators but also national public banks, local financial institutions and companies. A new journey for development banks, and a new journey for their counterparts. Quite a challenge.
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03/11/2022
Climate Report
Ensuring sufficient means to adapt to climate change consequences in France: What are the costs?
This study is a contribution to the French public debate. It aims at supporting the acceleration and concretization of climate change adaptation initiatives in this country. The study reviews 11 adaptation challenges such as the strengthening of civil protection, the reshaping of coastal areas or the protection of water resources. For each challenge, the study presents national budgetary decisions ready to make in the next Finance Bill that would complement existing actions and cost elements to feed the required arbitrations yet to be made.
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21/10/2022
Foreword of the week
Public development banks in the spotlight: What we should be looking out for
The end of the year is always a busy period for the climate finance world, with international events multiplying to take stock of the latest achievements in the implementation of the Paris agreement and to identify the next – more ambitious – steps to be taken by the international community. Though the climax of these events is undoubtedly the COP (starting in two weeks in Sharm El Sheikh, Egypt), with the New York Climate Week, and the World Bank and IMF’s international meetings behind us, and the Finance in Common summit coming to an end, we start sensing that some topics are already drawing a lot of attention.
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19/10/2022
Blog post
Net zero commitments need to prioritise impact
Over the past couple of years, the growing net zero commitments across financial institutions strengthened the focus on their portfolios’ greenhouse gas emissions. Yet, this focus does not guarantee emissions are truly reduced in the real economy. For that to happen, there is a pressing need for decarbonisation approaches focused on impact generation, with the appropriate indicators. According to Sarah Bendahou, Public development banks are in a unique position to adopt such approaches and indicators, paving the way for private financial institutions.
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21/09/2022
Climate Brief
Global carbon accounts in 2022
Carbon revenues were nearly USD 100 billion in 2021. This represents a more than 80% increase year-on-year (USD 53.1 billion in 2020, USD 97.7 billion in 2021). This increase is largely driven by the rise in allowance prices on the European carbon market, which exceeded the symbolic threshold of EUR 100/tCO2 for the first time in the summer of 2022.
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16/09/2022
Climate Report
Buildings new heat waves: invest today to limit the bill tomorrow
Over 35°C in exam halls during the French baccalaureate, inhabitants affected by their residences overheated… Summer 2022 has once again shown that our buildings aren’t adapted for the new heat waves. And yet every year, tens of billions of euros are invested in construction and renovation projects that don’t always take climate change into account. In this study, I4CE proposes immediate actions on three levers to initiate the process of adapting our buildings, and three more structural changes, including changes to thermal regulations.
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08/09/2022
Climate Report
Adapting French forests: investing wisely
L’adaptation de la forêt française aux changements climatique devient un enjeu politique important. D’une part parce que, de sécheresses en incendies, les conséquences de l’évolution du climat sur les peuplements sont de plus en plus visibles. D’autres part parce que son adaptation est une condition indispensable pour que la forêt joue le rôle central que l’on attend d’elle dans l’atténuation du changement climatique.
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02/09/2022
Op-ed
Industry: how to plan investments for the ecological transition?
The industrial sector currently accounts for around 20% of French greenhouse gas (GHG) emissions.
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01/09/2022
Special edition
Foreseeing the next crises – Activity Report 2022
The climate emergency is here and now. The consequences of climate change seemed remote to many and the summer of 2022 will perhaps be remembered as the summer of the end of carelessness.
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08/07/2022
Op-ed
Payment for carbon farming: we need an ambitious and pragmatic European certification
The European Commission will propose a `carbon certification’ by the end of the year as a first step towards remunerating farmers and foresters who contribute to carbon farming. This certification project raises debates and concerns. For Adeline FAVREL of I4CE, the EU can respond and develop an ambitious certification by relying on the experience of the Member States in this field.
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08/07/2022
Climate Report
Recommendations for the European Carbon Certification Framework
To achieve the climate goals of the UE, The European Commission wants to create a carbon certification framework to encourage carbon storage in the land sector. The challenge is to develop a common and harmonised framework at the European level by better relying on the expertise acquired through existing certification frameworks. With this study, I4CE propose 7 recommendations, inspired by both our concrete experience with the French Label Bas-Carbone to which we have contributed, and by 15 years of research on carbon certification.
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28/06/2022
Climate Report
Long-term strategy use for Paris-aligned investments
This I4CE report focuses on the role of countries’ Long-Term Strategies (LTSs) in the Paris alignment approaches of Development Finance Institutions (DFIs). It explores the possible roles of both the LTS development process and the resulting LTS document in providing insights on the Paris alignment of investments within investment decision-making processes. The findings are relevant for a broader range of financial institutions.
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28/06/2022
Climate Report
Changing wood use to improve carbon storage: which products should be the short-term focus?
In addition to debates about the right level of wood harvesting, another issue is equally crucial from a climate point of view: what is the best way to use the harvested wood? France’s long-term strategy, the Stratégie nationale bas-carbone (SNBC), calls for an increasing proportion of wood to be directed towards long-life wood products such as those used in construction, which store carbon for long periods. The aim is to redirect part of the resources currently dedicated to shorter uses, such as paper and energy production, towards these longer-lasting uses. While the objectives are very ambitious, the strategy does not come with the policies needed to achieve them. I4CE has therefore assessed the technical feasibility of redirection of the wood use, and has identified the most promising production chains of long-wood products.
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08/06/2022
Climate Report
Scenario analysis of transition risk in finance – Towards strategic integration of deep uncertainty
The restructuring of the economy towards a low-carbon system will lead to develop activities that are aligned with the needs of a net zero economy, to restructure others in order to make them compatible with these needs and to stop harmful activities. The financial sector needs to anticipate these dynamics to address strategic risks and […]
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26/04/2022
Climate Report
Include mandatory banking transition plans within Pillar 2
The transition plans aim to establish a progressive decarbonisation strategy by 2050, in line with the European Union’s objectives. The European Central Bank, through Frank Elderson, as well as several NGOs are calling for transition plans to be made mandatory for banks and to be integrated into prudential regulation. This note first looks at why […]
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17/03/2022
Blog post
French Presidential election: consensus for the new five-year term
For a year, I4CE has been meeting with the campaign teams of the main presidential candidates to encourage them to prepare their climate program in order to reach the French objectives. In particular, we asked them to prepare their "climate budget": the State and more broadly the public authorities now play a decisive role in the necessary investments for the climate, and they must anticipate the considerable increase in these investments for France to achieve its 2030 objective. All the more now the European target has been raised. Preparing a climate budget is a mark of credibility and transparency, a test of consistency.