Global Trustee and Fiduciary Services News and Views Issue 50

Prime, Futures and Securities Services | XXXXXX 12 WHAT DOES IT TAKE... ...TO BUILD THE MOST SUSTAINABLE FINANCIAL SYSTEM POSSIBLE? STANDARDS HAVE PROVED KEY… All the while institutions have built up products to match G20 commit to sustainable growth under PACC and 2030 Agenda for Sustainable Development UN Sustainable Development Goals or SDGs go into force FSB taskforce on climate- related financial disclosure 2015 2015/2016 2016 2017 There are 17 goals in total with a 2030 target fulfilment date. Covers governance, strategy, risk management, metrics and targets. YET €170BN A YEAR IS NEEDED… Now has 195 signatories with 175 party to the agreement. The EC has voted for a 15% cut in truck CO2 by 2025 and 30% by 2030. And progress will be checked in 2023, then every 5 years. BUT NOW WE HAVE A LEVER… There has been no single prescribed regulatory lever to facilitate a financially systemic switch to sustainability until now… The EC commits to sustainable investment under the Capital Markets Union Action Plan Advised by its High-Level Expert Group on Sustainable Finance Paris Agreement on Climate Change (which sits within UN’s FCCC) 2018 Moving to a far more sustainable model needs large-scale investment in the economy Directing public/private capital to sustainable investments. Identifying ways to protect the system from environmental risks. Deploying policies on a pan-European scale. Even with signs like rising AUMs and EU-wide reduction in CO2 levels across sectors, supporting sustainable investing as one of the fastest-growing segments in finance, something more is needed. Global AUMs up 61% to $21.4 trillion from 2012 to 2014 EU pledges CO 2 reduction of 40% in all sectors by 2030 Investment Framework Disclosure Rules Suitability Tests To realise global ambitions and switch the system to sustainability