On the 10th of October the Oxford Sustainable Finance Group and the Centre for Greening Finance and Investment (CGFI) convened representatives from four UK public financial institutions to Oxford for a collaborative away day on the latest research and innovations in sustainable finance. These were the British Business Bank, British International Investment, UK Export Finance and the UK Infrastructure Bank.
Dr Ben Caldecott opened the day by setting out how Oxford and CGFI are supporting greater connectivity between financial institutions and academia to better understand and tackle transition challenges and the physical risks of climate change.
Dr Gireesh Shrimali spoke on financing the climate transition. He explained the key characteristics of transition finance goals as distinct from wider ESG: a focus on limiting warming to 1.5°C while avoiding “locking in” carbon or blocking other sustainability progress.
Dr Nicola Ranger explained emerging and compounding physical climate risks; the growing likelihood of systemic shocks in areas like the food system; and feedback loops that can worsen climate change impacts. She noted adaptation is immediately needed to address near-term urgent risks, with levers across natural resource management and financial regulation.
On trends and innovations, Christophe Christiaen shared spatial finance approaches to identifying climate and environmental risks at the asset level and across supply chains. José Luis Reséndiz discussed trends in sustainability-linked finance offering direct financial incentives for delivering on green targets and noted that no framework yet exists for sustainability-linked sovereign bonds.
Discussion followed around joint challenges and opportunities for UK public financial institutions linked to green finance, inspired by topics raised in the talks.
Image via Trinity College