corporate governance & climate change
DESCRIPTION
Corporate Govervance views on Climate ChangeTRANSCRIPT
Corporate Governance &
Climate Change:
The Banking Sector
Akshat Pathak N . Mohan Reddy Sushant
Reports Covered
Ceres Report-January 2008
• World Top 40 Financial Institutions
CDP-India 2008 Survey
• Indian Financial Institutions
3CEE Report – Financing Energy Efficiency
• Energy Efficiency (EE) Schemes of Indian Banks
CERES Report
January 2008
Participants
Worlds largest 40 publicly traded banks and financial services firms
Market capitalization of these is $3.6 trillion i.e. 60% of world’s
Data Collected from securities filings, reports, websites, media accounts and third-party questionnaires
Risk Metrics Group, in consultation with Ceres and the Investor Network on Climate Risk (INCR)
Key Findings
1. • Climate Governance
2.• Internal GHG
Management
3. • External Financing
4.• Investment Retail
Products
Climate Governance
CC Governance Checklist (100-ps)Boar
d Oversig
ht (16)
•Actively Engaged in Climate Change Policy•Assigned responsibility to member, committee or full board
Mgmt
Execution
(22)
•Chairman/CEO assumes leadership in articulating & executing Climate Change Policy
Public
Disclosu
re (18)
•Securities filings disclose material risks and opportunities posed by Climate Change
CC Governance Checklist (100-ps) contd.
Emissions
Accounting (14)
•Company Calculates & Registers GHG Emission Savings & Offsets from operations.
Strategic
Planning
(30)
•Company sets Absolute GHG Emission Reduction Targets for facilities, energy use, business travel and other operations
Board Oversight
9 banks have assigned a board member.
4 banks implemented training programs on sustainability issues.
HSBC, has extensive climate governance structure
Carbon Neutral Banks: HSBC, ABN AMRO
Management Execution
Public Disclosure
34 of the banks shared the results with CDP signatories
• Bank of America, Citi, Goldman Sachs, JPMorgan Chase
Spottier record on climate change communication with shareholders
Only nine of the banks mentioned climate change in their latest form 10-K or comparable regulatory filings
Public Policy Statements
Internal GHG Management
Investment/Retail Products
External Financing
Internal GHG Management
Emissions Inventory
Emissions Management and Carbon Neutrality
Renewable Energy Finance
Equator Principles
Investment/Retail Products
Investment Products
Retail Products
Carbon Trading
Emissions Trading Exchanges
Climate Considerations in Lending
CITI says it incorporates the potential costs of carbon in the firm’s financing of power generation
HSBC has called on clients to disclose their carbon emissions and mitigation strategies in a consistent way
Constraints on Lending
Renewable Energy Finance
Kiribati Principles
CC as a material risk
Key Findings
Disclosure 9/40
Emissions Management
24/40
Investment Opportunities
22/40
Carbon Trading 23/40
High Scores
BANK REASON SCORE
HSBC Broad Overview 13/16
HSBC Strategic Planning 14/15
ABN AMRO Management Execution 4/4
RBC Risk Management 9/10
CITI Emissions Accounting 10/14
Barclays Carbon Neutrality 7/10
Road Ahead
To become Centre of Economic Transformation.
Finding Timely, Practical & Cost-effective solutions to Mitigations
Financing withdrawal from Carbon-Intensive energy sources and technologies
“Climate Friendly” financial products and services
CDP India 2008 Survey
3 Country Energy
Efficiency Report
The Risks Identified
Regulatory
• National Policies
• Efficiency Standards
Physical
• Rise in Temperature
• Rise in Sea Level
General
• Scarcity of Resources
• Disruption in Logistics
Key Findings
Concern about the indirect effect of new climate policy regulations
Informational Transparency & Brand Value
Physical Risk : Financial Valuation & Insurance Claims
Physical Risk : Investment in Infrastructure Projects
Key Findings
Risk Management : Spreading CC awareness & Responsible Lending
Risk Management : Re-insurance against natural calamities & considerations for Infrastructure Projects
CDM : Opportunities to partake in Carbon Market
Financing Renewable Energy Equipments
3CEE Project & Indian Banks
Aim: To achieve increase in EE investments by Domestic Financial Sectors• Development of Commercial Banking Windows for EE• Support for ESCOs• Guarantee Funds for EE• Equity Funding for EE/ESCOs Projects
Multiple Activities were designed for the following areas:
• IREDA – Responsible for day-to-day management of project• Formation of Active Core Group – Major Stakeholders• Cost Effective Approach for deployment of Financial Resources• Systematic & Transparent Implementation & Monitoring
Project Design:
Objectives & Scope of Project Uptech
To enhance Efficiency & Competiveness of Cluster
Cluster Level Interventions
R&D Projects
Training & Awareness
Marketing Support
Key Findings
• Technical Experts for Auto Clusters (Pune)
• Identifying Technological Options (Firozabad)
SBI
Canara Bank
Union Bank of India
Bank of India
Bank of Baroda
Marketing new & existing Schemes
Empanelling Energy Auditors
Developing Standardized Templates
Improving Appraisal Process
Thank You!!!