Greening the Banks Materials and Lessons Learned

Key takeaways and lessons from a four-part dialogue series in collaboration with the central bank of the Philippines (BSP).

This downloadable sample term sheet offers a starting point for other financial institutions to develop their own term sheets. The template was structured for a term loan facility for an RE project in the Philippines and can be customized and adapted for other green banking opportunities across the region.

Key takeaways and lessons from the Virtual Dialogue on Greening the Finance System.

These presentations from the virtual dialogue showcase potential ways CSOs can support greening the finance system across Vietnam and the Philippines.

Summary of key insights from the Greening the Banks Philippines Launch Event, including a green bonds discussion by Commissioner Amatong of the Securities and Exchange Commission.

These presentations from the Greening the Banks Philippines Launch Event feature a keynote speech from the Philippines’ Central Bank, a presentation from Commissioner Amatong of the Securities and Exchange Commission, risk analysis insights from IEEFA and WWF, and green finance experience sharing from major banks including BDO and RCBC.

This GTB case study offers a high-level overview of early green bonds issuances in Southeast Asia and the ASEAN Green Bonds Standards to help financial institutions understand the current state of play in the region.

This GTB case study highlights lessons from BDO’s sustainable finance journey including key challenges to inform other financial institutions seeking similar opportunities.

This summary compiled by the GTB team showcases key observations and insights from the BAP and WWF Forum on sustainable finance, climate-related risk, and the Task Force on Climate-related Financial Disclosures (TCFD).

This summary compiled by the GTB team showcases key observations and insights from the SEC and PSE Corporate Finance Forum on “Taking the Lead in Achieving the UN Sustainable Development Goals.” 

A Philippines national news segment featuring insights from GTB Lead, Marlon Apanada, on challenges and opportunities for greening the finance system in the Philippines.

Risk Awareness and Risk Management

This report provides context, background, and a general framework for climate-related financial disclosures and is intended for broad audiences.

TCFD Implementation Guide (2019)
Climate Disclosure Standards Board (CDSB), Sustainability Accounting Standards Board (SASB)

Illustrates well-established reporting standards, tools, and frameworks. This guide offers companies the “how-to” to drive implementation of the 11 recommended TCFD disclosures.

Provides an overview of a major TCFD challenge: how to integrate climate-related financial disclosures with existing reporting models and financial accounting standards.

By completing CDP's questionnaires on climate change, forests, and water security, companies will identify ways to help them manage their own environmental risks and opportunities as well as provide vital information back to their customers, investors, and the market through research, insights, and financial products and services.

This technical note provides an overview of the TCFD recommendations, how CDP has committed to aligning its questionnaires with the TCFD’s recommendations, and where organizations can find TCFD-related questions in CDP questionnaires.

This report details the results of the UNEP FI Investor Pilot on TCFD Adoption, a collaborative effort to explore, enhance, and apply a methodology for assessing the impact of physical and transition risks and opportunities on the portfolios of institutional investors.

Provides an open-source, step-by-step methodology on how to manage risks and capture emerging opportunities from the low carbon transition.

This report conveys that companies’ financial opportunities are greater than the negative risks posed by climate change and that the potential wins outweigh the costs of managing them.

Contains findings regarding the implications of climate transition scenarios for the credit quality of nine companies in the power, cement, and steel sectors. The results suggest that the opportunities and strategic alignment with energy transition drivers can outweigh the risks.

This paper provides a global snapshot, drawing on disclosures of over 500 companies, on the uptake of the TCFD across highly impacted sectors in 18 key markets.

Risk Analysis Frameworks for Financial Institutions

Assessing and Managing Climate Risk Exposure (March 2019)
Grantham Research Institute on Climate Change and the Environment, Visiting Fellow Working Paper

This working paper provides a suggested Risk Analysis Framework using a case study of a financial institution in a developing market like Mexico. The target FI, NAFIN, invests almost 20% of its loan portfolio in high carbon-intensive sectors exposed to climate risks. The paper’s recommendations should allow it to mitigate climate transition risks both in terms of implementing governance mechanisms to assess and manage risks, and transparently disclosing risks to international investors according to the TCFD framework. Based on the paper, an exposure to climate transition risk was detected through the assessment of the FI’s loan portfolio because of its investments in high carbon-intensive sectors, which could impact creditworthiness as a result of a lower capacity to pay their liabilities, increasing their probability of default.

Climate Change: Managing a New Financial Risk (February 2019)
Oliver Wyman and International Association of Credit Portfolio Managers (IACPM)

This paper presents key takeaways and industry perspectives from a global survey by Oliver Wyman and IACPM to help banks integrate climate risks and opportunities within their organization and provide guidance on the implementation of the TCFD recommendations. Exhibit 5 on page 8 presents an extract of the Bank of England’s Prudential Regulation Authority’s draft supervisory statement on enhancing banks’ and insurers’ approach to manage financial risks from climate change.

Tools, Guides, and Best Practices

Sample Term Sheet for a Green Project
Anonymized, downloadable sample

This downloadable sample term sheet offers a starting point for other financial institutions to develop their own term sheets. The template was structured for a term loan facility for an RE project in the Philippines and can be customized and adapted for other green banking opportunities across the region.

TCFD Good Practice Handbook (September 2019)
Climate Disclosure Standards Board (CDSB), Sustainability Accounting Standards Board (SASB)

Offers specific examples of different aspects of effective TCFD reporting across the four core TCFD elements of governance, strategy, risk management, and metrics and targets.

Provides practical guidance to help banks manage and report key climate-related metrics, regardless of their level of ambition.

The Energy Transition Risks & Opportunities (ET Risk) toolbox aims to quantify transition risk in financial markets. The toolbox is designed as a guide for relevant stakeholders seeking to define the ‘tools’—scenarios, data needs, and models—required for transition risk modeling. It seeks to map these inputs, how they have been used to date, and identify the missing pieces for further research and analysis.

Provides the next level of detail to help companies implement the TCFD recommendations and is a “living” document that will be refined as companies gain more experience preparing climate-related financial disclosures. Includes information on applying the recommendations, guidance for all sectors, and supplemental guidance for select financial sectors and non-financial groups.

Provides a further level of detail that can be helpful for companies in considering scenario analysis. It describes key publicly available scenarios and resources on scenario analysis.

Outlines a number of approaches to sovereign bond evaluation and available metrics. Scope and breadth of emissions are key considerations, as is the denominator chosen to normalize emissions to facilitate comparison between entities of different size.

Regional Green Bonds Reference List

ASEAN GREEN BONDS OVERVIEW
ASEAN Capital Markets Forum (ACMF)

This list provides a snapshot of Green Bonds and Sustainability Bonds across the Southeast Asia region as of August 2019.

Country-Specific Regulatory Guidelines

Philippines:

SEC MC No. 04 Series 2019
Philippines Securities and Exchange Commission (SEC)

Sustainability Reporting Guidelines for Publicly-Listed Companies.

Philippine’s Sustainable Finance Policy Framework
Bangko Sentral ng Pilipinas (BSP)

Circular No. 1085, Series of 2020, on the Sustainable Finance Framework of the Bangko Sentral ng Pilipinas (Central Bank of the Philippines).

BSP Draft Memo for a Sustainable Finance Framework
Bangko Sentral ng Pilipinas (BSP)

Draft Circular, Series of 2019, on the Sustainable Finance Framework of the Bangko Sentral ng Pilipinas (Central Bank of the Philippines).

Indonesia:

Regulation on the Issuance and the Terms of Green Bond
Financial Service Authority Regulation (POJK)

Regulation on the Issuance and the Terms of Green Bond (No. 60/POJK.04/2017) sets standards for green bond issuance.

Market Transition Information

This paper provides a review of green bond issuance and green bond policies in ASEAN. Issuance of green bonds in top three green bond issuing countries in ASEAN, i.e. Indonesia, Malaysia and Singapore, are reviewed in detail.

The report explores the drivers of sustainable finance growth in Asia Pacific as well as the factors constraining it. The analysis is based on two parallel surveys—one of investors and one of issuers—conducted in September and October 2019.

This report examines more than 3,700 financial commitments and 500 blended finance transactions to analyze the blended finance market, including intended impact, blending approaches, focus sectors, and target regions.

Renewable Energy Market Analysis: Southeast Asia (2018)
International Renewable Energy Agency (IRENA)

This report identifies emerging trends and themes at the intersection of policy and market development with a focus on countries from across the Southeast Asia region.

The report aims to show ratepayers, taxpayers, government stakeholders, lenders, and others the risks of coal plants becoming stranded assets. The Philippines’ banking sector is exposed to a proposed new fleet of coal plants that are likely to become stranded assets if they are built.

Country-Specific RE Market Insights and Learnings

Philippines

The report details how rooftop solar in the Philippines has the potential to lower the cost of power and improve national energy security and discusses three major hurdles to the broader adoption of solar power: Regulatory, Administrative, and Financial barriers.

Prospects Improve for Energy Transition in the Philippines (September 2019)
Institute for Energy Economics and Financial Analysis (IEEFA)

The report provides an overview of current trends and gives a detailed breakdown of the Philippines’ energy outlook and the barriers that are slowing uptake of renewables.

The report attributes the Philippines’ lack of large investments in renewables to purchase agreements that protect fossil fuel interests in imported coal and diesel. The report includes recommendations to attract investment and introduce more diversity and energy security into the electricity system, while helping lower costs to consumers.

Vietnam

This short report highlights the recent proposal by Ministry of Industry and Trade of Vietnam for a synthetic DPPA mechanisms (also known as financial, virtual direct or corporate PPAs) for off-site renewable energy projects in Vietnam with a proposed pilot program at a scale ranging from 400MW to 1,000MW.