Towards a sustainable financial sector

The financial sector plays a vital part in facilitating our transition to a low-carbon future. Financial institutions provide the investments needed to build a sustainable economy which, following the Paris Agreement, aims to be in line with limiting global warming to well below 2°C. More and more financial institutions respond to this responsibility by integrating climate considerations into their strategy and everyday business. >> How to bring investments in line with a 2°C scenario?

Over the past decade, Ecofys has supported a wide range of customers in the financial sector to take meaningful and visible steps towards a low carbon future. We combine an overview of the state-of-the-art in sustainable finance with a profound understanding of the energy system and energy and climate policy. In addition, we have practical experience in climate strategy development, climate risk analysis and valuation and carbon accounting. Our services support action both at the portfolio,  assets as well as customers level. We bring experience in particular in strategy development for a 2⁰C and decarbonised future, comprehensive carbon accounting of all asset categories and the valuation of carbon risks and other environmental, social or governance (ESG) impacts.

Climate strategy development

A growing number of financial institutions is including climate change in their decision making processes. Yet, proper frameworks to steer investment decisions towards a low risk, low carbon future are often lacking. Ecofys offers a number of approaches to arrive at actionable and effective climate strategies for financial institutions. This includes the definition of science-based climate targets in line with a 2⁰C future, or climate friendly investment criteria (“green-brown metrics”). We also bring a portfolio of successful and interactive workshop formats to arrive at sustained outcomes.

Carbon accounting of financial assets

For any financial institution, a meaningful climate strategy starts with a thorough understanding of the greenhouse gas emissions related to its portfolio. While many listed equities have started disclosing emissions, a comprehensive carbon account will also need to cover other asset categories, such as government loans, corporate loans, green bonds, commodities, real estate investments and mortgages. Ecofys can create tailor made methodologies to calculate, track and report the climate impact of your complete portfolio, ranging from a broad hotspot analysis to an in depth bottom up assessment.

Valuing carbon risks

By incorporating carbon and other ESG risks in risk management frameworks, financial institutions can start minimising these risks and appropriately pricing the risks they prefer to accept. Ecofys has developed various methodologies to value carbon risks in companies, building on our understanding of industrial sectors, abatement costs, internal and external carbon prices, supply chains and factors related to corporate governance.

Achieving active ownership and engagement

To take important steps towards a low carbon future, financial institutions seek to enhance engagement with their counterparts. Ecofys brings an excellent track record to support this process. We provide extensive sector knowledge, and experience in creating low carbon roadmaps for businesses. We can help your counterparts in setting science-based climate targets and identifying opportunities to achieve these. 

Investing in renewable energy and real estate solutions

With interest rates being low and stock markets still volatile, investors are looking for other ways to maximise their return on investments. Investments in the transition to a low carbon society result in stable and long term earnings. Ecofys offers the right expertise for the technical due diligence on investments in renewable energy projects or real estate solutions, drawing from a team of skilled and dedicated experts.

Get the insights you need for future-proof decisions. We look forward to supporting you in your challenge!