Finance

Principles of Integrated Capitals Assessments

This guide from the Capitals Coalition can help you make more holistic capitals assessments by accounting for natural, human, and social capital. It is designed to promote more consistency in how capital assessments are conducted. The first section outlines the spectrum capitals assessments, from ‘single capital assessments’ to ‘multi-capital assessments’ through to ‘integrated capitals assessments. The second section provides a five-principle framework designed to support the use of integrated capitals assessments. This guide will be most useful to sustainability and finance departments.

A4S Essential Guide: Strategic Planning, Budgeting, and Forecasting

In a changing world where the long-term economic, social, and environmental outlook is tremendously complex and uncertain, it has become increasingly difficult to respond to emergent trends. This guide from A4S was designed to improve decision-making and risk management by providing finance teams with tools, practical examples, and guidance on how to integrate sustainability into strategic planning, budgeting, and forecasting.

A4S Essential Guide to Valuations and Climate Change

Understanding and assessing climate change impacts is critical to determining the value of businesses and making sound investment decisions. This guide from A4S features a five-step framework to help investors and valuators incorporate climate change risks and opportunities into valuations, and includes case studies and practical advice on performing valuation analysis.

Win-Win-Win: The Sustainable Supply Chain Finance Opportunity

This report from BSR highlights mechanisms - such as sustainable trade loans and smart contract solutions - that will help you to leverage supply chain finance to incentivize and scale sustainable behaviour among your suppliers.

Financial innovation for SME net zero transition: Role of banks and buyers

This report from University of Cambridge Institute for Sustainability Leadership (CISL) and BSR explains how you can decarbonise your value chain by supporting small and medium-sized enterprises (SMEs). It covers four potential solutions to the common barriers SMEs face in reaching net zero, including a diagnostic tool to assess SME climate readiness; a shared repository for SME sustainability data; SME decarbonisation roadmaps; and a net zero support services marketplace. This guidance will be most useful to external facing teams, including procurement and supply chain management, as well as your sustainability team.

How to Talk to Your CFO About Sustainability

This article explains how to use the five-step Return on Sustainability Investment (ROSI) method to help CFOs make the connection between financial performance and sustainability. This resource will especially benefit change agents who are trying to show how proposed sustainability acitivities will meet ROI imperatives.

Broadening the horizon: How CFOs and Finance Functions can help drive corporate sustainability

This guide from the University of Cambridge Institute for Sustainability Leadership (CISL) can help you understand how finance teams can adapt and develop to fill their essential role in corporate sustainability transformation. It outlines the growing expectations for businesses to shift their focus from delivering financial performance for shareholders to delivering long-term wellbeing for people and the planet; explains the implications of this shift for businesses (and, specifically, for the corporate finance function); and highlights key enablers of transformation that will support finance functions in adapting to this changing environment. These insights will be most useful to CFOs and finance professionals.

Advancing the S in ESG: A primer for CFOs

This primer from WBCSD, in partnership with Shift Project and the CFO Network, is designed to introduce CFOs to social sustainability and why it is essential to their role. Part one provides overview of the what, who, and how of corporate social performance, and part two shares key insights from CFOs on how to better measure social performance.

Sustainable Finance Primer Series

This series of primers from the Institute for Sustainable Finance offers succinct introductions to common sustainable finance topics and tools. They cover over 20, including transition bonds, climate risk, and financed emissions. Each primer provides a breakdown of the topic definition, its importance, and its challenges, and while the primers give special attention to the Canadian context, the insights offered are broadly applicable. This resource will be most useful to finance teams and others seeking to orient themselves to the financial sustainability landscape.

Biodiversity Finance Reference Guide

The IFC has developed this guide to help you to better understand project eligibility criteria for biodiversity finance, as well as some of the more common project types. The guide builds on the Green Bond Principles and the Green Loan Principles and highlights different types of investment projects, activities, and components that help protect, maintain, or enhance biodiversity and ecosystem services, as well as promote the sustainable management of natural resources. This is a good resource for identifying opportunities to address the key drivers of biodiversity loss in your production practices; to integrate nature-based solutions into their operations; and to develop nature conservation activities.

The TPI Tool

Created by the Transition Pathway Initiative, the TPI tool can help you to assess the alignment of your investments with the goals of the Paris Agreement. This corporate climate action benchmark assesses how prepared companies are for the transition to a low-carbon economy. Using publicly disclosed company information, the TPI tool evaluates and tracks companies based on two dimensions: the quality of companies’ management of their greenhouse gas emissions and of risks and opportunities related to the low-carbon transition, and how companies’ planned or expected future carbon performance compares to international targets and national pledges made as part of the Paris Agreement.

The Transition Pathway Initiative also publishes discussion papers, explainers, reports, and carbon performance assessments for numerous sectors and industries, among other resources.

Net Zero Investment Framework Implementation Guide

The Net Zero Investment Framework provides a common set of recommended actions, metrics, and methodologies that can help investors to define strategies, measure alignment, and transition portfolios in ways that support net zero emissions future. Developed by the Institutional Investors Group on Climate Change (IIGCC), this is a good resource for investors and asset owners that want to decarbonise their investment portfolios and increase investment in climate solutions in ways that are consistent with the 1.5°C temperature goal of the Paris Agreement.

The IIGCC has also developed supplemental guidance on target-setting, investor expectations of corporate transition plans, recommendations for specific asset classes, and more.

Return on Sustainability Investment (ROSI) Methodology

Although business and societal success depends on sustainability, most businesses companies struggle with demonstrating the monetary impact of their sustainability efforts as they seek to address ESG issues. In response, the NYU Stern Center for Sustainable Business (CSB) has developed the Return on Sustainability Investment (ROSI) methodology. The ROSI methodology was created to help companies measure the financial returns on their sustainability activities and, thus bridging the gap between sustainability strategies and financial performance and allowing users to build a better business case for current and future sustainability initiatives.

CSB offers in-depth resources on ROSI, including a step-by-step overview; original research publications and an interactive research database; industry case studies on implementing ROSI; Excel tools for testing ROSI focused on risk, talent, and operational efficiency; and a free online course module for building a case for sustainability.

This suite of resources will help you to assess the value created by sustainability strategies, to track sustainability-related financial performance in real time, and to assess the potential ROI of future sustainability initiatives at both the firm and the division level.

Investment Patterns and Leverage

This brief from Re:Structure Lab can help you to better understand how investment patterns can be better prioritised and leveraged to combat forced labour and other pervasive forms of social inequity. It explains how changing patterns of investment are creating structural constraints on labour costs and are directly and indirectly driving the use of forced labour, and it provides recommendations for correcting these trends. It also identifies meaningful action investors can take to promote decent work.

The Net Zero Investment Framework 2.0

This updated framework from the Institutional Investors Group on Climate Change (IIGCC) brings together the latest guidance on net zero aligned investing to help you and your organisation develop a transition plan for your investment portfolio. It explains the origins of the framework; how it has evolved in the second edition; and how to use the framework as a guide rather than a prescriptive tool. The framework itself is organised into six levers for change: 1) governance and strategy; 2) climate objectives; 3) asset allocation; 4) asset level assessment and targets; 5) policy advocacy; and 6) stakeholder and market engagement. For each lever, there is a detailed list of suggested action points you can to draw from. This resource will be useful to finance professionals and investors across geographies and most traditional asset classes.

Financing a Just Transition: A Business Brief

This brief from the UN Global Compact can help you understand how your organisation’s financial practices can advance a Just Transition. It begins by explaining four ways finance can contribute to this transition, such as supporting necessary data infrastructure; stewarding assets through social dialogue; allocating capital toward transition investment needs; and working collaboratively with other businesses and the public sector. It then looks at how finance can support the transition in four areas, strategy, governance, risk management, and metrics and targets. The guidance will be useful to Finance teams including Chief Finance Officers, Chief Investment Officers, and Chief Risk Officers.

Impact-Weighted Accounts Project

This project from the Harvard Business School was initiated to drive the creation of financial accounts that better reflect a company’s financial, social, and environmental performance. Transparently capturing such external impacts can help with investor and managerial decision-making and better ensure that human, social, and natural capital is accounted forImpact. This platform explains the importance of reimagining capitalism and the role that impact-weighted accounts can play; explains alternative ways in which value can be assessed; highlights the opportunities of impact-weighted accounting; and features data visualisations and links to relevant research to support your learning on the subject.

From Risk to Reward: The Business Imperative to Finance Climate Adaptation and Resilience

The negative economic effects of increasing extreme weather are no longer based on scenarios - they are happening in real time. This report from Boston Consulting Group and others can help you understand the business case for prioritising investment in adaptation and resilience. It shows that such investments present an opportunity to drive value in three ways: by protecting assets, supply chains, and operations; by growing the market of adaptation and resilience solutions through investment and climate-resilient revenue streams; and by collaborating with the public sector to finance and implement adaptation and resilience activities. For each opportunity the guide explains the business benefits and identifies entry points. This resource will be most useful to finance teams and sustainability professionals.  

Greening Cash Action Guide

This guide from the Exponential Roadmap Initiative tackles a specific and under-the-radar emissions contributor: companies' cash holdings. It outlines actionable steps you can take to reduce the emissions associated with cash holdings, which financial partners may be investing into emission-producing activities. The guidance will be useful to business leaders, sustainability managers, board members, and other employees interested in better aligning your companies’ financial activities with its climate commitments.

Definitions for Responsible Investment Approaches

These guidelines from the CFA Institute, the Principles for Responsible Investment (PRI), and the Global Sustainable Investment Alliance (GSIA) were created to help harmonise sustainability investment terminology, improve investment industry communications, and reduce the risk of greenwashing. It focuses on key responsible investment approaches, including screening, ESG integration, thematic investing, stewardship, and impact investing. This resource defines and explains each of these terms, and provides guidance for using the terms in practice. This resource will be especially helpful for investors, regulators, and sustainability teams.

Net Zero Voting Guidance

This guide from the Institutional Investors Group on Climate Change (IIGCC) can help investors create a net zero voting policy. It is based on three core principles: aligning with the investor’s net zero objective; communicating net zero expectations; and supporting net zero engagement and activities. The guide features illustrative examples of investor practices that can be modelled and adapted for each of these practices. This resource will be most useful to corporate finance departments as well as asset managers and asset owners.

State of Finance for Nature 2023

This annual report from the UN Environment Programme can help you understand the scale of financing needed to tackle climate, biodiversity, and land degradation-related challenges. It makes the case for large-scale investment in Nature-based Solutions (NbS), examines the current scale of financial flows driving negative impacts on nature, and examines the state of financial flows driving positive impacts through NbS. It also provides estimates on the extent of NbS financing required to reach key Rio Convention targets, such as limiting the rise in climate change to 1.5° C, protecting 30% of land and sea by 2030, and reaching land degradation neutrality by 2030. The report concludes with key findings and recommendations for green financing. These insights will be most useful to the sustainability, finance, and strategy teams.

Circular Economy as an Enabler for Responsible Banking: Leveraging the Nexus between Circularity and Sustainability Impact

This report from the UNEP Finance Initiative can help you understand how banks can support the transition to a circular economy. The report describes the principles of a circular economy and provides an overview of the rapidly evolving policy and regulatory landscape, making circularity relevant for banks. It outlines how banks can apply circular economy principles, explains the risk and opportunity of linear versus circular activities, explains impact interlinkages across the portfolio, and identifies priority actions. The final section explains the impact benefits of pursuing circular economy activities as they relate to climate, nature, pollution and waste, and the economy. This resource will be most useful to sustainability practitioners working in the banking sector.

IIGCC supplementary guidance: Scope 3 emissions of investments

This guide from the Institutional Investors Group on Climate Change can help you to improve your practices on addressing the Scope 3 emissions of assets. It offers practical advice for interpreting the Scope 3 recommendations of the Net Zero Investment Framework (NZIF) 2.0 and outlines a range of good practice guidance for investors, including guiding principles and potential steps that investors can take to start analysing Scope 3 materiality across portfolios.

Alternative Ownership Enterprises: An Introduction for Mission-Oriented Investors

The economic transformation required to overcome the intersecting social and environmental crises we face cannot be achieved without transformation of business itself. Alternative Ownership Enterprises (AOEs) are organisations that "...significantly shift economic value and decision-making power toward the non-investor stakeholders they impact, such as workers, producers, consumers, community members, or even a non-financial purpose." This report can help you to better understand the case for AOEs, and why the time to support them is now. It explains the main characteristics of different AOE models, explores their relative differences, and highlights their impacts as it relates to the needs of mission-oriented investors. It also highlights key actions required to expand the field of AOEs.

Although this resource was created with investors in mind, it will also be relevant to business owners exploring ways to shift their corporate structure to better align with their values.