PACTA

To reach 🌳 net zero emissions, we need to both finance climate solutions like low-carbon electricity, buildings, and transport, but also finance the transformation of polluting parts of the economy. Transition finance supports solutions for reducing emissions from high-emitting sectors of the economy that may not otherwise be eligible for green finance. 📢 RMI's new Transition Finance Resource Hub provides a one-stop shop to learn more about transition finance. The Hub contains videos, articles, how-to guides, case studies, FAQs, industry guidance, and more. Check it out and bookmark this valuable resource today! https://lnkd.in/gdN53GVh #LCAW2024 #ClimateAction

I’m looking forward to joining the faculty for the upcoming “Transition Plans in the Financial Sector” in-person course in Florence, Italy at the European University Institute, April 17-19. Join us to learn more about transition finance, and how can @PACTA be used in transition planning. https://lnkd.in/e8DJjgGH

The PACTA team breaks down the findings from the recent European Central Bank report- showing 90% of Euro area banks are misalligned with the goals for the Paris agreement. Alignment approaches such as PACTA can help banks meet a range of upcoming Euro area requirements focused on climate transition planning and risk management.   What can banks do to plan for the energy transition and mitigate risks?  1. Disclose their climate alignment. 2. Manage climate risk and get ahead of regulation by developing transition plans. 3. Identify the opportunities in the climate transition and capitalize on them through transition finance. Read the article: https://lnkd.in/gk7p3biT

For the first time, regulators have conducted a stress test of west coast U.S. insurance companies’ investment portfolios- valued at $2.29 Trillion in assets- measuring portfolios against #energytransition scenarios. The analysis uses data from PACTA methodology, and found that with climate change, insurance companies could face losses from $7 billion to $40 billion on corporate bonds alone in coming decades, potentially surpassing the 2017 and 2018 California wildfire losses of $22.7 billion. In a press release, California Insurance Commissioner Ricardo Lara said “Our report shows that even with the growing threats of climate change, insurance companies that evolve to meet the needs of a transition towards zero-carbon energy and low-carbon technology will position themselves for growth to better serve consumers, while those that do not face significant losses.”  https://lnkd.in/ghbeCWiH Read the full report from the California Department of Insurance "The Hidden Cost of Delaying Climate Action for West Coast Insurance Markets": https://lnkd.in/gE2PjAzR

Upcoming Webinar: Don't miss "The hidden cost of delaying climate action for West Coast insurance markets: A first-ever regulator stress test of investment portfolios" using PACTA and 2° Investing Initiative 1-in-1000 Transition risk tools. Speakers include California Department of Insurance, Theia Finance Labs, Center for Law, Energy & the Environment at Berkeley Law, and RMI's Kaitlin Crouch-Hess and Daisy Johana Pacheco Bernal. Join this webinar to learn more about the exposure of insurance company investments to climate-relevant sectors and how these investments stack up to climate scenarios. Tuesday, February 6th | 9 – 10 a.m. Pacific Time Register now https://lnkd.in/dBbK7nbV

RMI welcomes the European Central Bank´s groundbreaking analysis: "Risks from misalignment of banks' financing with the EU climate objectives" 👏 With this report, the ECB has conducted its first-ever climate alignment assessment of 95 large European banks, representing 75% of euro area loans. The report uses RMI’s open-source Paris Agreement Capital Transition Assessment (PACTA) methodology to analyze climate alignment across 6 high-emitting sectors. Key findings show that 90% of banks assessed are not aligned with Paris Agreement goals to limit the effects of climate change – exposing those institutions to potentially heightened transition risk. While the results of this analysis are sobering, we are encouraged to see the ECB’s continued integration of climate considerations into Eurozone financial risk management.   The report, also featured in a blog post by ECB Board Member Frank Elderson, demonstrates the insights made possible by PACTA’s forward-looking, capex-based alignment assessment approach. We see significant potential for both individual banks and banking supervisors to use alignment analytics to better understand underlying drivers of transition risk in credit portfolios, as well as to support disclosure and transition planning.  Read the blog: https://lnkd.in/eVQeBXmT Full report: https://lnkd.in/g9JQp5wp

Center for Climate-Aligned Finance experts James Mitchell and Dr. Elizabeth Harnett weigh in on the top 4 trends expected to dominate climate finance in 2024. 👏 Top 4 Trends: transition finance, blended finance, policy and regulation, and headwinds from political and economic instability. Learn how financial institutions, governments, and corporations will need to navigate these trends to ensure the money needed is available to accelerate the energy transition and help communities to adapt to and slow climate change.  https://lnkd.in/g4UFnrb4

Thanks to The Chartered Institute for Securities & Investment (The CISI) for hosting George Harris and Nicolas Dodd from PACTA on their recent webinar- discussing how PACTA for Banks can be used to measure the alignment of lending portfolios, and as a risk assessment tool. Watch the webinar replay: https://lnkd.in/gfaPVVnU 

Interested in learning how PACTA can help banks analyze their exposure to transition risks in corporate lending portfolios, and measure climate alignment? RMI and the The Chartered Institute for Securities & Investment (The CISI) are live Zoom webinar running on Tuesday, 5th December, 12.00 pm GMT. The Webinar is free for Members and non-members. Register for this webinar: https://lnkd.in/g_ZBVeiy

It's time to leverage finance for REAL climate impact.👏 The Sustainable Aluminum Finance Framework is set to redefine how banks finance the decarbonization of aluminum production. Developed by RMI in partnership with Citi, ING, Societe Generale, and Standard Chartered Bank, this framework is a critical tool for aligning investments with a 1.5°C future. Explore the framework and join us in leading the industry transformation: https://lnkd.in/gM_UfVBv