Published inLiminalytics·Jul 8, 2022Investing in transitionsWhile lots of investors are still stuck in the ESG/CSR stage (see my previous article), advanced investors are investing in transitions: they invest in those companies and industries that contribute to successfully navigating transitions (in food, energy, mobility, finance, health, etc.) towards an economy within social and planetary boundaries. They…Sustainable Investment2 min readSustainable Investment2 min read
Mar 15, 2022Unlike the ECB, banks don’t understand climate transition riskRoman philosopher Seneca reportedly said “There is no favourable wind for the sailor who doesn’t know where to go” — a quote that well fits the financial sector’s lack of understanding of climate transition risks. The ECB found that none of the 109 supervised banks meets its disclosure expectations on…Sustainability3 min readSustainability3 min read
Published inLiminalytics·Mar 2, 2022Sustainable investing should be about transitions, not puritySustainable investing is all the rage, but is often poorly understood and poorly executed. And the result is too often greenwashing: nice marketing, little substance. It is much more fruitful to be thinking in terms of transitions than in terms of ESG or CSR. Such approaches are often rather static…Sustainable Investing2 min readSustainable Investing2 min read
Published inLiminalytics·Nov 3, 2021Why we need a transition integrated credit rating — and how to establish itCurrent credit ratings are statistically sophisticated and thoroughly institutionalised. However, they do not capture climate transition risks. That is a major problem that sustainability ratings will not fix. This article discusses why this is a problem and how it can be solved. Problems: mispricing, preventable defaults and poor allocation of…Clinate Risk5 min readClinate Risk5 min read
Jul 27, 20219 ways to improve corporate sustainability reporting & performanceCorporate sustainability reporting is too often uninteresting, uninspiring and ineffective — the outcome of political processes, compliance with external demands, and data that happens to be available. It can and should be done in a much better way. 1. Define long-term value creation and steer on it Value is much…4 min read4 min read
Published inLiminalytics·Updated Jul 13, 2021Three reasons why financial institutions need to speed up for climate risk readiness“You may delay, but time will not”, Benjamin Franklin said. This can definitely be said about humanity’s hesitation to seriously start battling climate change. And, as we argued before, it also applies to financial institutions, which are not ready for assessing and managing climate risk. That might be a bigger…Climate Change3 min readClimate Change3 min read
Published inLiminalytics·Updated May 10, 2021Financial institutions are not ready for climate risk — but they can and should beClimate change is increasingly recognized as an existential threat that entails significant financial risk as well. Hence, many financial institutions are keen to better measure and manage climate risk. However, they are struggling to get this done in a meaningful way. The reasons for this struggle are interrelated: a lack…Climate Change4 min readClimate Change4 min read
