The increase of climate change-related litigation and activism is becoming a risk which businesses cannot afford to ignore. City & Financial Global’s Climate Litigation and Activism Virtual Summit,  23rd November, provided delegates with a thorough analysis of the key issues and practical guidance on how to effectively mitigate this risk.  

According to data from the London School of Economics, the total number of climate change actions issued globally almost doubled between 2017 and  2020. While climate change-related litigation has historically been  dominated by actions against companies involved in the extraction, refinement and sale of fossil fuels, as well as governments, it is  rapidly extending into other areas. This process is likely to be  accelerated by the recent publication of the UN Intergovernmental Panel on Climate Change’s sixth report, which highlights the increased risks associated with climate change, and may encourage further litigation and activism in all sectors. 

City & Financial Global’s ESG & Climate Regulation in Financial Services on 1st February addressed the huge swathe of new climate regulations being introduced on a  regional, national and supranational level and provided a practical guide to navigating these regulations across jurisdictions. This presents  significant challenges, and opportunities, for banks, asset managers and  insurers.

Whilst there was increasing coordination  among the NGFS and standard setting-bodies, such as the IFRS Foundation,  there was growing concern about regulatory and policy fragmentation, which rapidly became a reality at the individual country level. Such fragmentation could result in undesirable complexity and inconsistency. In a recent IIF-EBF Global Climate Finance Survey of 70 financial institutions, 65% of institutions said that “green” regulatory  market fragmentation was a big source of concern and would have a material impact on the market for sustainable finance. Central banks and regulators are themselves concerned about comparability and consistency  of the evolving supervisory and conduct frameworks with respect to climate risk. Current and emerging sources of fragmentation include  regulation and supervision; taxonomy eligibility and alignment; carbon pricing mechanisms; nature and biodiversity and capital markets.

Just as companies and organisations were getting to grips with implementing TCFD climate change reporting, they now need to factor into plans how to  incorporate nature-based financial disclosures into reporting processes, following the launch of the Taskforce on Nature-Related  Financial Disclosure (TNFD) by UNDP, UNEP FI, WWF and Global Canopy.

The TNFD aims to build on the success of the Task Force on Climate-related  Financial Disclosures (TCFD), which has become instrumental in mainstreaming the issue of climate-related financial risks. The TNFD’s framework will complement the TCFD by giving companies and financial institutions, as well as their investors and stakeholders, a broader picture of their environmental risks.

Last year’s edition of City &  Financial Global’s well established summit on infrastructure policy and investment, which was held on 14th September, came at a particularly interesting point in the market’s development.

To replace the financing gap left by the EIB no longer being able to invest in UK infrastructure  projects, the government launched the UK infrastructure Bank on 17 June. Unlike the EIB, the new infrastructure bank has been designed  specifically to ‘crowd in’ private sector  investment, which the market  has welcomed. The confirmation that £15bn  of green gilts will be issued this year, the proceeds of which will be used for energy transition projects, should also be useful in providing  new funds for the realisation of the government’s national  infrastructure strategy.