07 December 2022

UNEP FI: 2022: a year of milestones on the road to implementing sustainable finance

At UNEP FI, 2022 was a year in which we marked important milestones, while we continued to drive the finance industry’s ambition on delivering sustainable global economies and showcased our members’ progress.

 But 2022 was also a year of global events that confirmed how urgently the world must move to tackle the triple planetary crisis of climate change, biodiversity loss and pollution. Climate change-induced heat waves, floods, storms, and droughts heavily impacted populations, businesses, and nature across the globe. While the latest Intergovernmental Panel on Climate Change (IPCC) report released in April warned that although we have the technology and global capital to tackle the deepening climate crisis, we are running out of time. At the same time, war in Ukraine has worsened the energy crisis and brought the topic of energy security sharply into focus. 

On the other hand, our members have taken large strides forwards on implementing the industry frameworks, the Principles for Responsible Banking (PRB) and Principles for Sustainable Insurance (PSI). Three hundred and twelve banks are now signatories to the PRB representing nearly 50% of the globe’s banking assets and the PSI community now unites more than 230 insurers and supporting institutions. In other areas, work continues, such as developing guidance on the net-zero transition where the UNEP FI-convened alliances are moving on from commitments to target-setting, to implementation, and groups of members are developing new frameworks to help grow finance for nature, adaptation and a circular economy. And while we celebrate our members’ progress this year, we also remind financial institutions, financial regulators and policymakers around the globe that there is no time to lose in addressing the triple planetary crisis. At COP27, in November, there was some encouraging news with an international agreement to establish a ‘loss and damage’ fund to help the world’s most vulnerable withstand and recover from the physical impacts of climate change. But with no agreement to raise countries’ ambitions on decarbonisation and the Nationally Determined Contributions (NDCs) collectively falling short of where the science tells us they need to be, as the UN Secretary General António Guterres reminded us again: “the clock is ticking.” 

Read on for a summary of what UNEP FI and its growing membership of more than 450 financial institutions worldwide have done this year to advance sustainable finance. Check out our Annual Overview 2021 for more in-depth information about our different programmes.

Celebrating 50-, 30- and 10-year anniversaries

2022 was a year of big milestones with UNEP’s 50th, UNEP FI’s 30th and the PSI Initiative’s 10th anniversaries. At Stockholm+50, UNEP celebrated 50 years of global environmental action, followed by UNEP FI’s Principles for Sustainable Insurance (PSI) initiative with a 3-day anniversary event in June in Zurich, Switzerland, marking 10 years of harnessing the power of sustainable insurance and engaging with key stakeholders to amplify sustainable insurance. The first ESG guide for the global life and health insurance industry building on the ESG guide for the global non-life insurance industry published in 2020, and a global study harnessing environmental pollution liability insurance for a sustainable economy were launched at the event.

In October, UNEP FI and members marked 30 years of sustainable finance leadership at our 17th Global Roundtable. The virtual event brought together 100+ industry-leading speakers and 3000+ online participants to continue to deepen sustainability integration across the banking, insurance and investment industries. The event saw the launch of the Principles for Responsible Banking Academy, a new global training programme for banking professionals, and new resources for managing impact.

Pioneering implementation of net-zero finance

The oldest and most established UN-convened net-zero alliance, the Net-Zero Asset Owner Alliance (NZAOA), saw another active year, advancing delivery on decarbonization targets while continuing to see consistent membership growth and expanding horizons. The Alliance has now reached 83 institutional investors, representing US$11 trillion in assets, and has welcomed the first African sovereign wealth fund. The Alliance started the new year by publishing the second edition of the NZAOA Target Setting Protocol to guide its members in setting more ambitious climate targets, in alignment with the IPCC no/low overshoot pathways. The second NZAOA progress report published in September, offered insight into aggregate data on intermediate targets set by 44 members. The Alliance also published various position papers throughout the year, calling on stakeholders including policymakers to address climate risk, implement carbon prices, support blended finance, and develop net-zero-aligned benchmarks. 

Meanwhile, the UN-convened, industry-led Net-Zero Banking Alliance (NZBA) marked its first anniversary in April and experienced tremendous growth in its first year, with more than 100 banks joining and committing to decarbonizing their lending and investing activities by 2050. The Alliance launched supporting notes for the NZBA Guidelines for Climate Target Setting for Banks in April, a NZBA Transition Finance Guide in October, and finished the year on a high note with the launch at COP27 of its anticipated first NZBA Progress Report. The report details the intermediate 2030 decarbonization targets from over 60 member banks and demonstrates the first stage of progress since the Alliance started its journey. While first attempts are rarely perfect, the report demonstrates exceptional progress for the alliance that is blazing a trail for other banks and building a clear roadmap for regulators and governments to create policies that will support a more sustainable financial system. 

The newest of the UN-convened alliances, the Net-Zero Insurance Alliance (NZIA), now numbers 29 leading insurers representing more than 14% of world premium volume globally. The alliance is finalizing its first Target-Setting Protocol to enable NZIA members to independently set science-based, interim decarbonisation targets for their insurance and reinsurance underwriting portfolios in line with a net-zero transition pathway that would limit global warming this century to 1.5° C. ..

 more at  UN EP FI

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