 My name is Frank Yotso. I'm with the Australian National University. Don't worry, I didn't fly in here just for that. I'm at the end of a very long trip. It's been fantastic being at this conference. I think we have a really great community here actually. I think that's something actually to cherish and to continue as well. I think you each have the details of everyone else who attended the conference. I think it's important actually for these connections to continue even when there isn't a conference. We've got five talks and in fact six speakers on a variety of topics that are all connected through the theme of finance. Like in the other sessions, we'll get straight into it. We will have all of the talks right up front and through very strict timekeeping. We will make sure that there's plenty of time for conversation in the room at the end because really at the end of the day we all work in this field. The conversation about the issues is really what brings us together here. You've got the program in front of you or you might. We're making one small change in the order. The revised order is we'll have Ellen Quigley and Emily Buttkin first, followed by Bronwyn Tucker. That's the change. Then Igor Shishloff, then Amanda Shockling and then Trousard Dordy to close it out. With that, it's over to you, Emily and Ellen. This is a dual track presentation. My colleague Emily will be doing the rest and basically I'm teeing her up for filling in a couple more of the gaps. But I'll be starting with basically a review of the literature that contributes to an assessment of where there might be a gap filled in the financing of the phase out of fossil fuels. I'm going to rush through this and we can get into it later if you'd like to discuss that. Essentially, if you look at the actual evidence base behind, let's say, ESG or responsible investment, a lot of it doesn't actually look to be connected, meaningfully to underlying company level behavior change, reduction in fossil fuels, reduction in emissions. It's fairly useless, I'm sorry to say. This is going to be depressing, but we'll just rush through where there is some hope in this whole dismal picture of responsible investment or so-called responsible investment. If you look at additionality by asset class, and sorry to get all nerdy right away, but you're looking at the effect that an additional investment in that asset class would have on, let's say, the company's cost of capital or some other meaningful change. It actually matters to the company whether or not you're investing. So if you look at the evidence base for public equity investments, that's when you buy a share. Let's say that Truzar and I are buying and selling shares with each other. The company doesn't really care. I mean, we're not famous, I guess that's part of the problem, but they don't care whether we own their shares. We are passing the money and the shares back between us. The money is not going to the company, so they don't care. There are some models that suggest that in some magical universe where there are enough people did this, it would dramatically affect share price. We do see minor changes in share price. They tend to be pretty temporary and they tend to be associated with the announcement of the sale of the shares, not the actual sale of the shares, which points to another thing we'll return to in a bit, which has to do with social discourse effects. Anyway, the really important asset class in terms of fossil fuels is debt. So bank loans and bonds, it's the big deal. The rest is kind of neither here nor there. I think IPOs could be important as well because that's when a company is listing on the stock market for the first time. That's also what we refer to as primary market capital or new money, but it's really a debt story. If you look at what's available in the debt market for investors, there is almost nothing there. The major index providers, so an index fund, by the way, for any non-finance types. Index funds are how a lot of people are passively investing, both in public equity and on the bond side. Basically, you just get a little slice of everything in the entire market and you don't have to stock pick or bond pick, as the case may be. You will find all sorts of ETFs, exchange traded funds, tracker funds, whatever on the public equity side, some of which do exclude fossil fuels, for example. But on the bond side, that just is incredibly rare. There now appear to be maybe two exceptions to this rule and they're extremely recent. Basically, passively, a bunch of new money is flowing into fossil fuels on the debt side. That's insane and there's almost nothing that an investor can do that's low cost in the same way as they can participate in other low cost index fund products. There's almost no way that they can invest in a way that does not automatically pump new money into fossil fuels. Okay, and then I'm going to very briefly run through the kind of shareholder engagement research, oh god. There are some bright spots in that literature, but basically it's kind of depressing. A lot of shareholder resolutions may have like a long-term arc of success in shifting social norms, but really tend to be requesting disclosure only. Don't tend to result in company level behavior change. Private engagements, hard to say, data are poor, but any examples given in the literature don't tend to point back to actual company level behavior change. Guess what? Voting against the real election of directors does tend to have more of an effect. And then in terms of debt-based products, the threat of exclusion from an index appears to be quite a push for companies. And then just in general, the threat of divestment. So basically the social shaming element is quite important as well. So anyway, if you take all of this together, you find out why our team is trying to build a fossil-free bond index that will be open source and nonprofit and so on and so forth, because it emerges from all of the gaps in the literature and kind of tries to use that evidence base to build something that can help fill this gap. I'm going to hand over to Emily now to talk about methodologies and those gaps. All right. My name is Emily. As mentioned, I'm here affiliated with the Cambridge Center for the Study of Accidental Risk. So we kind of came up with this idea to do a fossil-free bond index, but then we needed to think about sort of developing a methodology for which companies would get included or excluded from this bond index. So we started by looking into the methodologies that are already out there. At the moment, there's sort of a high-level race to zero framework for non-state actors. As part of that, there's the G-Fans initiatives, which is looking at focusing on the finance sector. And within that, they each reference a number of sort of external and pre-existing sort of third-party methodologies, including the many you would have heard of TCFD, SBTI, TPI, CA100. I'm not going to go too much into that. But we kind of delved into each of those. I'm going to skip that one as well. To look at sort of the methodologies and the different metrics they were using to see whether these companies were climate aligned. And, you know, assuming that we could hopefully embed some of these data points and methodologies into our work. But on reflection, we found a number of limitations to some of these, and they were thematic. So, they were heavily focused on disclosure-based metrics. And Ellen's done some really good work on this. But there's not great evidence that disclosure drives real world environmental performance improvements in companies. Also relevant to this conference is very few metrics on phasing out fossil fuels, especially, I mean, some reference to the fact that it needs to be phased out but more focused on the developing a policy side, or again, disclosure-based metrics. Limited engagement with justice and equity. I think that's come up a lot over the last couple of days. And also exclusion of banks and financial institutions, which as Ellen just mentioned, are a key source of new capital for fossil fuel expansion. So, I'm going to, yeah, I kind of covered this, but kind of a lot of the metrics were establish a policy or disclosure methodology, but stopping short of actually saying what a good metric would be. Yeah, none of the GFAN's initiatives mentioned oil and gas phase out. So many of you probably saw this, but the RACER0 recently introduced the criteria on phasing down and out fossil fuels. But then that's met with huge backlash and they've recently backtracked a little bit on that. Justice and equity is in there. There's a lot of mentions of just transition and even a fair share of emissions reductions. But then there's sort of not much engagement with what a fair share of emissions reductions actually looks like from a company level perspective and lots of citations of the 50% by 2030 sort of benchmark, which is just the global minimum. Yeah, and the financial sector is excluded as well in a lot of the different benchmarks and even in the new sort of EU Paris Align benchmarks, which is pretty problematic because that means that the financial sector is in the most heavily weighted sector, including index provided that we engage with where JP Morgan was the biggest holding in the benchmark, which is the largest financial of fossil fuels since the Paris Agreement was signed. So with these limitations, we decided to develop our own set of criteria for what we think would be a good benchmark for whether a company's aligning with the Paris Agreement or at least the goal to limit global warming to 1.5. We focused on three core sectors to start off with, all in gas or energy as... Oh, that's four. One left. Yeah. The energy sector is the supply, the utility sector is the demand and the finance sector is facilitators. I think there's not time to go into each of these, but we're very much soliciting feedback and we'd love to hear your thoughts either in the questions or afterwards, engage you on whether these are good metrics and where to get data on these things, because that's one thing that we've heard from index providers is they just don't have the data on these things, which is an interesting finding in and of itself. But I think, yeah, one thing to just mention is we've tried to embed the fair share of emissions reductions and fossil fuel phase-out dates adjusting for wealthy countries that have a historical responsibility for emissions, but there's a challenge there because most of those pathways that look at fair share of emissions reductions are based at the national level and translating that to a corporate or a sectoral level, most of those pathways use like an economic efficiency approach. So translating across those levels is really challenging. So at the moment we've just taken a headquartering approach, but it has limitations in a number of ways. So these are our metrics on the energy sector. Again, with banks and finance institutions, it's just about looking at new capital for expansion and phasing out existing in line with the fair share approach, similar for power utilities. And then we also have some cross-sectoral metrics on anti-climate lobbying, deforestation and biodiversity, just transition and social justice. But again, these social things are difficult to pin down into quantitative metrics. So your feedback on that, very welcome as well. Thanks very much. And our next talk we will hear about the G20 countries continuing to finance fossil fuels. There's Bronwyn Tucker, she's Global Public Finance Co-Manager at Oil Change International. So Bronwyn. Oil Change does research and campaigns and movement building kind of towards hopefully a globally just transition away from oil and gas. And so, yeah, today I'll be talking about our core tool that our team, the public finance team uses, which is the public finance for energy database. And I'm cheating slightly from the title because it is of the presentation because it is a kind of rolling body of research. And so, and there's been some exciting kind of political momentum, so covering some things that are a little bit newer than those two papers, which are the last two like major updates of this database that we wrote about. And so, yeah, I am in terms of kind of what this covers. So it's the G20 countries and really a small portion of public finance. And so it's kind of development finance institutions and export credit agencies as well as the major multilateral development banks. And yeah, all of the kind of data is publicly available at energyfinance.org. And so I'm not going to spend a bunch of time on methodology today, but happy to chat about it. But yeah, just to kind of put public finance a little bit into context and specifically like also really international public finance a bit more specifically. I mean, these two bubbles are the kind of like big picture takeaway that these institutions are still funding way more fossils than for clean energy in terms of what we can track. And yeah, I think there's I think in terms of public finance, I do love to kind of emphasize that I think it can be very powerful. Public finance institutions have a lot of tools that they aren't using. And when they do use them, they're still mostly using them to kind of prolong the fossil fuel era. But they could if they were pushed to kind of be very key actors for a redistributive transformative pro-public just transition. But right now they're too busy funding fossils to do that. So yeah, to kind of this I might get in trouble for showing because it's embargoed and not reviewed yet. So I'm trusting everyone. But it is an exciting example of kind of the area especially that this finance can be powerful in which there's like large infrastructure projects traditionally. And so if you look at LNG export terminals, it's been for like relatively small amounts of money has gotten or helped get a lot of them built, which is yeah, don't love it, but an exciting stat. And yeah, I'm actually going to go back to that one. But in terms of just putting this money slightly into context a little bit more, we would be the first to say there's a ton of uncertainties in our numbers because there's not enough transparency. So we don't know for sure around these numbers, but it's what we can find. And then yeah, for a few years, IISD and ODI and OCI would publish these three numbers together to get a broader number of fossil fuel support. And Bloomberg's been using the same methodology and will be publishing an update ahead of COP, which is exciting. And then yeah, I think also striking to look at the clean money we can find from these institutions, which overlaps with climate finance tracking, but I think striking that that like public climate finance number that's more recently available is almost exactly outweighed by the fossil fuel kind of support that's continuing from these institutions. And I won't spend too much time on this one, but I think also just helpful to note that in terms of money that maybe could and should be flowing internationally there this kind of piece on climate reparations should be a lot larger on top of these already kind of stunning numbers. So yeah, I guess, so I'm going to give everyone a whiplash just to give the like breakdown of kind of the data set as a whole. This is the last three years. Just I think gas is the biggest and growing and like of course developments this year are not like the political developments and backsliding around some of the policies on this. I think definitely worried about that kind of gas piece not going away. And then sorry to take everyone. Okay, great. Going back to this graph, I think I mean in terms of the three categories of institutions, export credit agencies are by far the worst for fossil fuels. And so that's why we switched the order because it's going to go into like great detail on ECAs specifically. And yeah, I think otherwise helpful or probably obvious here to note that the clean energy green ban here is pretty stuck. And yeah, I think that is also I think off like one of the more surprising findings that it hasn't gone up as we've seen a lot of commitments on that side. But yeah, just to go through a few more data summary points. This is kind of how the G20 countries shake out. This doesn't this is just the ECAs and development banks. And yeah, I think I mean, I always will shout out Canada because that's where I'm from. But yeah, getting away with a lot and actually don't get a ton of attention for that. And yeah, on the recipient side, this is how it shakes out. I think in terms of kind of a lot of like political narratives around gas and fossil fuels overall and development this year, I think it's striking like the top recipients are relatively wealthy for the most part. And then we definitely see if you dig into the numbers for when this money is flowing to lower income countries. It's often with really unfair contracts that aren't actually likely or maybe even possible to support development with that example from Mozambique pulled out. But there is some exciting momentum. And so people have already mentioned the Glasgow public finance statement a lot over the last few days. And so this is an infographic from a report with ISD that we released in June. Just trying to tally up the kind of non G20 actors as well. And I think exciting also when I think we've been thinking a lot about kind of multilateral like voluntary initiatives and trying to build norms. And this one, I think just in terms of it was made last year a cop but had a deadline of the end of this year. And yeah, just had some really concrete kind of criteria. And so the next two months, I think we'll be really busy of actually trying to hurt everyone to meeting this policy. This is the list of countries. But if we go back up to this graph, Canada signed on. The US, Italy, Germany, UK and France are also signed on. Japan kind of did because at the G7 this year the other countries really like G7 was isolated as the only non-signatory. But there was definitely a little bit of LNG loopholes, extra loopholes in that statement. But definitely exciting to see a lot of that really like a large number of countries signed on to a supply side initiative. And so hopefully there's lots of room to grow this right now we're focused on making sure it doesn't get watered down and like become meaningless. But I think there's, I think through the OECD and potential export credit arrangements there's a lot of potential. There is potential to of course just mainstream it to other countries and then I think also hopefully to other supply side initiatives or other kind of financial justice issues. But yeah, this one, but just to maybe finish because I know I'm running out of time. Yeah, I think just on the Glasgow statement still I think the kind of obviously with the energy crisis, cost of living pieces this year, the kind of there's about six of the like 13 major, so there's 39 signatories, but around 13 that have like major amounts of money going internationally and about six of them have real policies. But then we still have a group of kind of like Italy, Germany, Canada, US that are the biggest of that group and still missing and they're also being quite unhelpful having mixed messages, but a lot of them are on the cusp of or have policies in development. And so it'll be a fun one to watch over the next couple of months and definitely happy to chat with anyone who's really active in those countries and could be has ideas on how to push those governments over the line. And yeah, I wanted to finish just on this slide, which is unfortunately missing got the title cut off, but basically in terms of kind of where also some of these institutions could go if they are pushed to and kind of pass this stop funding fossils obstacle as I think just like a lot of the tools that they do have could be really important for a globally just transition. And so, you know, we have a lot of infrastructure to build. There's a lot of regional economic diversification and redistribution needed and public banks are pretty have a lot of tools to do that. And I think just in specific, there's some good. Yeah, overall, there's some really great case studies in both of these publications, but maybe specifically. And yeah, in the one example use that I think is is helpful to think about is also they have an ability to kind of cross subsidize. And so I think in public finance, there's a lot of discourse around using and like what are the things that public finance is most important to fund and I'm not going into what private sector can do. But there's some great case studies of public banks using profitable sectors to cross subsidize some of the like social supports or less profitable things. And so could be an exciting area and yes, where to be cutting it close. Thanks everyone. Thank you very much Bronwyn and yeah, I mean the direction of travel is clear. And yet it's also clear that things are very murky. I think that that has come through both of these talks very clearly in terms of the lack of applicable indicators that Ellen and Emily spoke about. And also now all of these different numbers. Of course, you know, we noticed, you know, subsidies are sometimes combined with tax exemptions. And of course, the two have may have different effects and different baselines to measure against. Our next talk is by Igor Shishloff. He's with Perspectives Climate Research Consultancy Research Consultancy. We're senior climate policy and finance experts and also the academic director of climate and business program at HEC Paris over to you. Pleasure to be here. So I would like to talk a little bit about export credit agencies and how export credit agencies should be aligned with the Paris Agreement as Bronwyn rightly pointed out. Export credit agencies are currently the largest class of public finance institutions that are active internationally in terms of their support to fossil fuels. And of course this is this is a big problem. So the agenda of my presentation, I will quickly talk about aligning finance with the Paris Agreement. So the big picture. Then I'll dive into the case of export credit agencies before talking about the assessment methodology that we propose and some of the country case studies that we've conducted over the past two years. And then I'll finish with a quick future outlook. All right. So what does it mean to align finance flows with one and a half degrees? We already yesterday and today essentially we've got the remaining carbon budget of around 500 gigatons until the end of the century to have a 50% chance of meeting one and a half degree target. And what it means? Well, we can discuss, you know, different trajectories but essentially net zero by 2050. And what that means is that a large share of fossil fuel reserves will have to stay in the ground. But what we see what we see happening in reality in the finance space and especially in public finance is both public and private finance for fossil fuels significantly outweighs finance for adaptation and mitigation. Now what we need to do is of course to withdraw the misaligned private and public finance and redirect it to sustainable activities. And we also mentioned, I think yesterday, quite extensively the net zero pathway by the International Energy Agency, which essentially says that we don't really need new investments in new exploration of fossil fuels. Now if we look at the Paris Agreement and the role of finance, we see that it's mainly, mainly revolves around two articles, article nine, which is about providing climate finance to developing countries and article 2.1c, which is really about making finance flows consistent with the low carbon development pathway. And public finance institutions, both institutions and also different instruments, such as for example investment treaties, these institutions and instruments play an over-proportional important role because they have the capacity to crowd in private finance and therefore they, it is extremely important that they are, first of all, aligned with the Paris Agreement. And there are in general three types of internationally active public finance institutions. There are multilateral development banks, bilateral finance institutions and export credit agencies. And of course, as Bronwyn said, export credit agencies have recently become really the largest supporters of fossil fuels. And these institutions are, well, I guess I can say quite obscure and less transparent than multilateral development banks and bilateral institutions. There's little research, at least until about two, three years ago, that went into this topic. And this is why we thought that the topic calls for more attention, more research. And together with my colleagues at Perspectives, we started looking into this topic about two years ago. So very quickly, we already said that that their fossil fuel support is more than 10 times more than their support to clean energy of export credit agencies. And so what these institutions are, are essentially public or private companies with an official mandate to promote national experts abroad. And they have a range of financial instruments. Depending on the country, they may or may not provide direct loans. And also they typically provide different risk management instruments, guarantees and insurance schemes for exporters. They receive premium or interest payments to break even. And they have transaction-specific de-risking capacity, meaning that actually many large-scale fossil fuel infrastructure projects in developing countries happen because of the support of export credit agencies. So they have the capacity to make or break such large infrastructure projects. Well, you mentioned previously Mozambique, I think is a good example. The notorious LNG project in Mozambique, which was backed by several export credit agencies from several countries, and it would probably not have happened without the support of these institutions. And in fact, I will, in a few minutes, I'll talk about the Export Finance for Future Coalition. It's a coalition of 10 countries looking at transporting their export finance. So they themselves acknowledged in the recent publication that the ECAs have done little to steer their portfolios in one direction or the other, and that essentially the portfolios of export credit agencies rather reflect the export structure of specific countries. So, for example, in Denmark, where we've got a lot of renewable energy experts, technology experts, the Danish ECA naturally has more renewable energy in its portfolio. Whereas in Canada, it may be the opposite. Right, so a couple more words about the current context and what has been happening in the past couple of years. So there's been quite a number of developments on the international level with regards to export credit agencies. So we've got the Export Finance for Future Initiative of 10 European countries. They have recently published a transparency report where they provided a bit more information than we had before with regards to their exposure to fossil fuels and renewable energy. So that's something researchers and NGOs have been calling for for a number of years. We've got the reform of the OECD arrangement, which is the main international policy governing export finance. Last year, there was a ban, essentially, on official export credit for coal-fired power plants. They stepped short of any restrictions on oil and gas. And of course, this is the next step that we should be pushing for. And then the Glasgow statement on international public support for the clean energy transition, which we already talked about today. It was unfortunately, to my understanding, watered down by the G7 in the wake of the energy crisis. And there's some loopholes that have been introduced with regards to gas and LNG imports. But well, we can discuss it afterwards. And then a couple of examples from concrete export credit agencies. So the British ECA, UCAF, was in fact the first ECA to implement and not only commit to phasing out most support for fossil fuel projects. There are still some exceptions, but they're relatively limited. And then the Dutch ECA developed a methodology to measure the exposure of its portfolio to the fossil fuel value chain. So all steps of the value chain up, mid, and downstream, which I find quite interesting. All right, so I say I have very little time left. So let me just very quickly walk you through the assessment methodology which we proposed. We were essentially building the methodology on the E3G methodology for public banks, adapting it to the specificities of export credit agencies. So we've got five assessment dimensions. These assessment dimensions are weighted. So essentially, the heaviest weighted dimensions are related to mitigation. So the restrictions on fossil fuel support. And also targets related to other carbon-intensive sectors. And here you see an example of assessment of UCAF. Actually, it's the only country that we assessed so far that has scored some progress and not unaligned. And I don't know if we'll distribute presentations, but if we do then there will be links to these publications. Good. And so so far we've done five case studies. And as you can see here, as I mentioned, only UCAF scored some progress. Other countries we analyzed, which were Germany, Japan, Netherlands, and Canada all scored unaligned. And in our case studies, we provide detailed analysis of what the gaps are and policy recommendations. And I think the benefit of doing these case studies is that while doing these studies, we're also trying to engage with the governments with, I must say, varying degrees of success, depending on the country. And I think these case studies are also useful for the NGO community, for the advocacy work. And finally, they also feed in policy discussions on the international level, for example, at the OECD. And currently we're working on four additional case studies, US, Italy, France, and South Korea. Two of them will probably be published before the COP and two of them early next year. All right. So that's my last slide. Very quickly outlook on obstacles and opportunities. So there is this argument. There's sort of the perceived risk of losing out from seeding hard fought for market shares when seizing support to fossil fuels. And there is this argument that, okay, for example, if the OECD countries withdraw, then some others would just step in. There's also fragmented supernational policy landscape. Obviously the OECD arrangement only applies to the OECD countries. It doesn't apply to China, for example. But we see also that there are some opportunities for transforming export finance. So I know that the first bullet point would be quite controversial using the EU taxonomy because with the recent additions of gas, of course, there are a lot of reservations. At the same time, there's a lot of political momentum from COP26 and the E3F initiative, which I mentioned earlier. And there is also potential for increased climate-related cooperation in different forums like the G7 climate club proposal. So hopefully we will see more reforms in this space, especially related to oil and gas export finance. And with that, I apologize for running one minute late. Thank you very much. Thank you very much, Igor. And of course, anytime you provide grades and publicly release them in comparison, you will have an impact there. Our next talk is on climate finance for coal transition. And our speaker is Amanda Schottling, who is a climate policy analyst with Climate & Company, which is a sustainable finance think tank. And Amanda usually works on public policy projects towards the EU policy landscape. Over to you. Thank you for the introduction. So as Frank said, I work for Climate & Company, and our mission as a company is focused on the intersection of environmental sustainability goals and the financing aspects, because to achieve sustainable development, we need to get the financing right. So this research that I'm presenting on today was guided by the European Commission and the German Development Agency GIZ. And if we were guided by the statement to meet net zero goals, all countries need to stop burning coal. This is quite obvious, but as I will come to later, becoming climate neutral in Europe will not matter unless the whole world also does so. And the objective of our study was how can Western countries support the financing of the coal transition in Spiepa member countries? So first, I'll start with a few key events that led us to the need to answer this question of Western countries financing a coal exit elsewhere. So 2015, we saw the Paris Agreement where global carbon emission goals were set. Four years later, the European Union released its commitment to reduce carbon emissions to zero by 2050 with an intermediate goal of 55% reductions by 2030. Last year at COP26, Western countries from the EU, the UK, and the US agreed on finance to help South Africa phase out of coal, and the exact plan is still being worked out in the Just Energy Transition Partnership. And just a few months ago came where the same nations that developed the finance deal with South Africa now want to provide funding to India, Indonesia, and Vietnam, sorry, yeah, Vietnam at COP27 this year. So we performed this research focusing on Spiepa member countries, which are shown here in blue, and this is the strategic partnership for the implementation of the Paris Agreement. And this is a group of countries that are crucial to have on board for the global energy transition, because 83% of all coal power capacity in the world is located in these countries, and 71% of all planned future capacity is also located there. Even though the global financing of coal plants is now more difficult due to trends towards ESG funding and financial disclosure regulations that may prevent the financing of new coal, it's still important to call attention to the extreme difficulties facing a lot of these non-OECD developing countries where coal use is locked in. Our research explored the economics of climate finance options available to engage internationally with a coal transition and explores the new transition solutions at our disposal to help countries transition from coal. And as I said previously, our study objective was to assemble the ways in which Western countries can support other countries in financing their coal transitions. So in the next slide I'll show you a wallet of available coal transition mechanisms. And this is very simplified. Our report has a lot more details, but to keep it simple, this wallet contains, instead of holding money, it holds the financial tools at our disposal to accelerate the global transition away from coal. So the tools in blue are in the category of paying for closure. And these tools financially compensate coal plant owners for shutting down their plants before their expected retirement age. In purple we have tools in the debt refinancing category, which provides the owner of a coal asset with low cost debt that must be repaid eventually in exchange for funding transition activities like decommissioning a coal plant or investing in clean energy. And lastly, the cards in green are in the buy and retire category, which is an investment vehicle that acquires a coal asset with the purpose of retiring it before its retirement age. And on the next three sides I'll zoom into three of these coal transition mechanisms that have already been implemented around the world to give you a flavor of what we researched. So the first is concessional debt, and this is an investment deployed with lower interest rates than those on the market and with more lenient conditions to reimbursement. So here we interviewed the company NGEE Energia in Chile and asked them about their decarbonization instrument which was launched in 2020 by the International Development Bank. So IDB provided a loan at market rates for the construction and operation of a wind farm in Chile and it was supplemented with an additional concessional rate loan. The interest rate of the second loan will be decreased to below market rates in relation to the amount of emissions averted. Currently the wind farm is in operation but the planned disconnection of two coal-powered units was postponed due to capacity concerns as drought in Chile has impacted the nation's hydropower generation. And from our interview with NGEE we learned that the concessional loan did actually not speed up the coal phase-out process. NGEE is an international company and they already had plans of their own and they would have closed these plans anyways because this is just a pilot instrument and it could be used in different contexts elsewhere. Compensation was already mentioned this morning by Elias and this has been used in Germany's coal exit in which hard coal plants receive a closure premium through competitive reverse auctions. So how this works is a federal agency in Germany determines the amount of capacity to be reduced in each auction round based on reduction targets set out in German coal exit law. And then coal plant operators make a bid for the price they'd be willing to accept to close their plants at and since it's a reverse auction the winning bids are the lowest, not the highest. And in 2027 closure will be mandated anyways without any financial compensation so this incentivizes operators to put in their bids early on in the process. And while the auctions are meant to ensure that the payments are kept as low as possible they've been criticized as being ineffective and wasteful as plants that were already making a profit loss were awarded these closure premiums in the first auction round. And there's also a form of direct compensation that's going to lignite plants in Germany but this is controversial and costly mainly because the calculations of the amount given to these plant operators were based on assumptions favorable to the coal companies I should mention that this type of compensation is also being investigated by the EU commission for possible breach of state aid law. And the last mechanism I will mention is rate payer backed bond securitization and this is a debt refinancing mechanism where securitized bonds allow the utility to refinance investments to support the early retirement and replacement of coal plants. And this mechanism is already being used by multiple energy companies in the US. It allows the utility to collect the full return of the net book value of the retired coal power plant and it does so by with a securitization payment which is a surcharge placed on customers electricity bills to pay back the debt of low interest rate bonds and invest in clean energy that will eventually replace the retired coal asset. So I've presented an example of three of these tools but in our research we also explore a range of theoretical tools that haven't been actually used or tested yet and just one of those is the idea of debt for climate swaps but debt for coal exit swaps. So the main thing I want you to remember from this presentation is that phasing out coal is not a straightforward process. In fact there are many different roads that lead us to Paris many ways in which the coal exit can be accelerated and from our research we assembled a wallet of financing mechanisms to phase out coal as well as mentioned their justice implications. We found that there are upsides and downsides to each of these tools and context where they can or cannot work. Lastly we found that each country requires a tailored approach to facilitating and financing a coal phase out because each financing mechanism has specific requirements and situations that need to be present for a financing tool to actually achieve the goal of a coal phase out. Thank you so much for listening and you can find our report on our website. Thank you. Thank you very much Amanda. I feel like we're really learning things. I sort of with some quantifications of the carbon equivalent penalty there as well maybe we'll have a chance to get back to that in many other points in the presentations in the Q&A. Our final speaker is Truzar Dordi. He's a doctoral candidate in sustainability management University of Waterloo working mainly in climate finance energy policy and risk management. And I think your findings are that a small number of players can make a large difference. Thank you so much for having me here. It's an absolute pleasure to be back in person. My name is Truzar Dordi. I am a newly minted doctor from the University of Waterloo. I finished my PhD. Thank you. Oh my God, stop. And I am now a postdoctoral fellow at the University of Victoria in British Columbia. So I'm thrilled to share today the final paper of my dissertation. It was an international collaboration with Sebastian Grike at the University of Otago in New Zealand. Dr. Alan Nafe at the Banque de France and Dr. Olaf Weber at the University of Waterloo. And we were looking at how just 10 financial actors can accelerate a transition away from fossil fuels. A little bit of motivation before I get into the presentation. I've been looking at fossil fuel divestment for nearly eight years now. And every time I speak to an investor, one argument that I hear constantly is that they'd rather engage with the industry, right? So my question here is can they engage with the industry? How much influence do these shareholders have? And who has that influence? So I'm sure I'll be preaching to the choir to start with, but the 200 largest fossil fuel companies, colloquially known as the Carbon Underground 200, are a carbon bomb. If they emit their proven reserves, it would surpass our carbon budget three times over. So there's this critical need to constrain these emissions in order to meet our climate targets. Does finance have a role to play in this? Maybe I can convince you, yes, after the end of this presentation. And broadly, the topic that we were looking at here through who can make that influence, we look at it through a lens of spatial finance and a lens of network analysis to identify that. Look at the 200 fossil fuel firms, the Carbon Underground 200, as well as we get shareholder ownership data from the Bloomberg database, collectively 918 shareholders. And what's unique about this is not only do we collect the direct owners, but we also collect the indirect owners who own the owners. And what we find is just 10 of these actors who will show right at the very end own half of the emissions potential from the Carbon Underground 200. There is a case to be made for them to lead this transition, but we also argue that if they don't, we should hold them accountable for continuing to finance the economic activities that lead to climate instability. So I'll go really quickly on this. I mentioned, again, the Carbon Underground 200. For those who may not be familiar with it, it's publicly listed companies. 98% of global reserves are held by these companies. If they burned their reserves, they would emit 674 gigatons of emissions. For context, our global carbon budget as of 2021 was, I believe, about 240 gigatons. So this is three times greater, 674, 20 times greater than our global output in 2019. So immense holdings in the fossil fuel industry. Capital markets have historically played a role in this transition in terms of steam and telecommunications. And so what we argue here is that they can once again play a role in the low carbon transition as well. Typically from a theoretical perspective, shareholder engagement has looked at through the lens of agency theory. In this study specifically, we look at sustainability transitions theory called the multi-level perspective. And the idea there is that niche innovation in the financial sector can influence incumbent regimes. All we need is a small spark through those players. Getting right into the results. So the first one is that spatial finance aspect. We use a typology from Wojcik over here. And I'll just make two quick points over here. So first around the domestic piece, half of the size here. And you can imagine domestic ownership is defined as a U.S. firm who has holdings in a U.S. stock exchange, a U.S. firm traded on a U.S. stock exchange. So the United States, China, India, Canada, Japan all have quite an influential role. And they should be leading that transition at home. And there's evidence that domestic ownership is actually more effective in shareholder engagement as well through work by Dimson and all. The second piece I wanted to talk about is this piece around import ownership in the purple square, which is also quite substantial. And so what this tells us is that you can imagine this as a U.S. shareholder who owns shares in a Canadian firm traded on a Canadian stock exchange. The United States has a lot of that type of ownership. So this raises questions around carbon leakage, a different form of carbon leakage. Who is producing the fossil fuels and who is profiting from that production? All right. So getting into the network side of things, we use a bipartite network analysis. Basically all that means is there are two types of nodes and a directed link, one direction towards the two of those. So in this case over here, the red dots, the red nodes are the fossil fuel firms and then the gray dots around that are their shareholders. We can quantitatively test this. We use two measures to quantitatively test this, degree centrality. You can really think about this as the person who knows everyone, right? They're well connected. So in the example of the blue square over there, B is connected to A, C, B and E, right? High degree centrality and this can be normalized if needed. The second one is closeness centrality. Where do they sit in connection to other nodes, right? So if A or C wanted to talk to D or E, they would have to go through B, right? That's the person who can bring people together. In our large network over here in the orange square right up top, we see this sort of low degree centrality, right? So, you know, a firm with maybe one or two major shareholders right in the center, a really deep network, right? So a lot of holdings and then some of the closeness centrality is the indirect holdings in the blue square right at the very bottom there. We break this down a bit further and look at the different types of asset owners in the orange square right over there. That's an gorgeous bank right in the center. They have holdings in many firms. But generally speaking, if you look at the public government side of things, it's typically larger holdings in one or two firms. The size of that blue line, the edge, represents the size of that holding. Investors, so these are the Black Rocks and Vanguards of the world. Again, you can see this really, really high level of degree centrality concentration, right? This is a proxy for influence and power in the industry. And then finally, the high net worth individuals as an example, you know, typically holdings in one or, you know, a shareholder might own one or two firms. Perfect, yeah. Lastly, we have made an interactive platform, which you can check out online. You can scroll over each of these dots and see who the firms are and who their shareholdings are. I'm happy to share that if anyone's interested. And finally, what I think is most exciting is the list of the... So the way we calculate and rank these shareholders is based on that degree centrality, how central they are to the network. And again, that's a proxy of influence and power, as well as the emissions, right? So in this case, we can see the black rocks and vanguards of the world very central to the network, but lower emissions versus perhaps, you know, the government of India or the kingdom of Saudi Arabia, substantially higher emissions holdings, but lower degree. And that's the method we use to rank those. I'll leave that for two more seconds. How many are on the list? That's 20. That's 20. So up to capital group. All right. Cool. So closing up. I believe that the low carbon transition can be championed by a small influential group of shareholders. We analyzed this through a network analysis to identify who those shareholders might be and through the lens of the multi-level perspective theory. We believe that niche innovations in these shareholders can lead to change in the incumbent regime. And niche innovations could be all of these conversations around G-fans, the precedents around physical and transition risk to act on climate change. But once again, we do stress that if they don't act on climate change, they should be held accountable for propagating climate instability. One last piece real quick. The paper is published now, so feel free to go and find it if you need. We were really fortunate to get a lot of media pickup on it as well. So if you find the work interesting, please do engage with it online. It helps tremendously to get the message out to environmental NGOs and governments and such. And on that, thank you again. It was great to talk to you. Thanks for that question. Well, fascinating stuff. And thank you, Dr. Doherty. Look, we've covered a huge amount of terrain here. I'm sure there's lots of questions in the room. We have just over 15 minutes. I propose, that's me here on the keyboard. Well, we'll leave that up. That's good. I propose we take questions in couples or in threes for a more efficient conversation and so the floor is open. And do indicate to me ahead of time if you want to ask a question. So I saw Christian first and then in the middle here. I apologize if I forget names. The two of you first. Hi, Christian from the Australian National University. This is just a question for Bronwyn and Igor around export credit agencies. Fascinating work. Two questions. One, can you tell you a little bit more about the types of ECA's? Do they all come in the same structure or some? What's the bureaucratic structure of these organizations and are there various types under the banner of ECA's? And two, Igor, you mentioned that you had varying degrees of success in engagement. I'm curious where you got more access and where you got less. Thanks. And right here in the middle. Hi. I guess my question is more for Bronwyn. In your slides, you had one that where the money was coming out from the countries and where it was going to. And mainly, of course, we've got global south countries in there. And I was wondering if you considered, if you looked at, if you considered and how did you consider technical assistance? Because in some cases, they also foster transparency and they're very tricky in my person. So I wanted to understand how you considered them. So jump right in panel. Take the questions as you wish. Do you want to start with me seeing the case? Yeah, sure. All right. Thanks for the questions. Christian, I'll pick your question on the types of ECAs and also the engagement with different governments. So yes, there are different types of ECAs in terms of their structure and their nature. So in some countries, you have ECAs that are essentially government agencies. Like an example of that would be, I guess, the UCAF. And then you've got different countries where you can have private companies mandated by the government to perform the role of supporting experts. And an example of that would be earlier Hermes in Germany, for example. They also, as I mentioned, differ very much in terms of the types of instruments they offer. So some of them are so-called pure cover ECAs. They provide only risk management instruments, whereas others can also provide financing in the form of loans and such. And then on the question with the engagement success. So indeed, it's been very different depending on the countries. So in Germany, for example, we had relatively good engagement with the government, probably related to the fact that we are a German institution and we have relatively good connections. We also had some constructive discussions with colleagues from the Netherlands and from Canada as well, actually, surprisingly. Whereas, for example, in Japan, we unfortunately didn't manage to talk to anyone from the government or from the ECA, even though we tried to access them also through some of the NGO partners, but we were really unsuccessful there. And in the UK, strangely, during the research, again, we didn't manage to talk to anyone. We only managed to talk to some of the government representatives after we published the report. They were more receptive then. Yeah, and then just on ECA types, just to add in really briefly, I think also, yeah, you do get lots of exceptions as well. And so in Canada, a lot of their finance is a weird loophole from after the recession where they said, oh, we're going to finance domestic oil and gas now, and then they never stopped. And in Brazil, for example, it's all part of their development bank as well, and BNDES does a ton of national development bank roles as well, as well as export and development finance internationally. And so, yeah. And then also just outside of the OECD, I think, especially for ECA, it's way less consistent if countries have them and also how they'll act. And then, yeah, on technical assistance, we do count it when we can, but it is often just so small compared to bigger transactions. But if you can download the data and the background info on assumptions will be there. And then I will say on the kind of recipients we find for clean support, that it's overwhelmingly like the most it's wealthy countries funding other wealthy countries for renewables and for fossil fuels. It is a little bit towards more lower income countries, but it's still more kind of upper middle income or middle income and not actually the lowest income countries that are getting the fossil fuel support. And that kind of really counters a lot of industry narratives from this year especially. Did that cover the questions? Okay, very good. Okay, next question here in the middle. Then we're moving over to the right and then the next round. Hi, thanks very much. So I'm Martin Sokol, Trinity College Dublin. Thanks for an excellent session. This was absolutely fascinating. And congratulations to you all. Great stuff. One thing, however, that I was missing is kind of stronger engagement with central banks and what they do. So public finance has been mentioned. They also influence private finance. So as we know, just very in the last couple of years during the pandemic, trillions of dollars and pounds and euros were pumped into financial markets, including fossil fuel, obviously industry. So my question is to all panelists, what role do you think central banks should be playing in transition to phase out fossil fuels and save all of us? Okay, so central banks and please just pass it to the left. And yeah, very useful if you let us know your affiliation. Hi, Frederick Bauer Lund University. So it was mentioned by Boris Bronwyn and Igor right that this type of public funding through different mechanisms, including ETAs, can really make these things happen. You indicate that it's a small share of the total funding, the majority is private, right? But the public funding is important. So I'm just wondering if you have done research or know of any other research that has sort of traced this process, and if so, how and when in that process it really sort of makes that difference. Okay, who would like to have a bite at these two questions? Central banks. Very little we heard about central banks. I can start really briefly and also answer that question directly. But on central banks, I think a lot of financial regulations are very hard to communicate to the public and build political support for. So I think there one thing I'm excited about is a lot of the private bank campaigns and looking at individual banks that are kind of known to the public. There's a lot of momentum in a lot of countries around, you know, fossil fuel divestment around banks that people engage with daily. And I think at least in some countries, I know there's kind of strategies to try to harness that towards winning the more cross cutting financial regulations that we need. And yeah, OCI did have a report on this last year called unused tools just in terms of some of the actions they could take. And then yeah, really briefly on kind of the kind of private crowd in from public finance. I think it's actually something where the public finance institutions themselves love to talk about how much private finance they're crowding in and I think those numbers often really need to be taken with a grain of salt. And but yeah, I think in practice, it's really mixed like sometimes it is, they are able to leverage a lot of other private finance but there's also lots of public public arrangements, or also times where they really are acting kind of similarly to a private institution. Yeah. I could add just a couple of things and so in the same way as a bond index automatically drives new capital into fossil fuels, quantitative easing and so and so forth the purchase of bonds by central banks and you could view as a kind of demand stimulation for the bonds of these fossil fuel companies so and again that that isn't many or most central banks will tell you that they just do this across the whole economy and that it's neutral, right, which means that it is then going to proportionally suck up more fossil fuels because fossil fuels and other so-called sin stocks tend to resort to bond markets more so than equity markets anyway so it's actually it's it's not neutral even if it is neutral. But yeah, that that will be a source of new financing for fossil fuels in in times of quantitative easing. The other thing just to say like I don't know it was really interesting here all the stuff about public banks and so on. The overall literature on additionality by asset class and it kind of shows a pretty obvious thing which is just that the earlier stage of project is at the more it matters whether it's got money. And the inverse is also true like there have been cases now in which like really big fossil fuel projects have had to be scaled down or self financed because there wasn't enough supply of new capital to make it at the original scale so if that's helpful at all the earlier stage you get that new money which often probably will be more from from public funds and the more important it is to scaling and so on. Next question is right next to the camera back here. That's right. And another one. I saw several hands. Yeah. Thanks a lot. Really interesting discussions. I'm interested in the panelist view with respect to the role of private equity as a source of financing. And you know in terms of the opaqueness at least some of the conversations we've had is about the access to information and the data around it. So you know as we progress you know the role of private equity and whether it's a barrier to the transition interested in the thoughts around what are they you know the sort of protections that can be put in around that. And the second element is also in terms of financing a just transition thinking about the decommissioning right abilities associated with all of these projects and how that's being contemplated as part of financing a just transition. Thanks. Sorry. I'm Nadra with the common law secretary. Excellent. Thank you. Microphone migrates to the front in the middle. Yep. Right in the front. No. That's right. And to our panelists. Those of you haven't spoken yet in a discussion preference to you. My question is for Emily Allen and truzar. So from Ellen I heard you know shareholder engagement. We've seen it hasn't really been working very well from truzar. I heard here are the 10 actors who can make it work. But what are the forms of engagement that will make a difference in this case. Okay. Yeah. Yeah. This is Bala from ISE kind of a similar question in the graphs that Bronwyn when you showed there were these scales of finance on public finance and most of it was on international public finance but I was wondering about domestic public finance and how it scales compared to the international public finance. And in your graphs you showed how like countries like USA, India, China, they tend to invest domestically. So if there is a lot of domestic public finance, which I feel it might be, what should be their strategies and whether they can be same or different as compared to these international public finance and how they should change their sort of investment practices. Okay. So broad range of questions that might in fact see us out with the time. Right. So make sure you say everything you want to say domestic public finance, how to engage and the role of private equity. Go for it. Great questions. So so on the I'll start with the coordinate the domestic ownership side of things. It's it's promising to see that level of ownership where shareholders are in the same country as as the firm because they share common policies and they share the common cultural aspects as well. The one takeaway from this piece is that we have that list of 10. But we also have a lot more shareholders right in this case that we had 918. So engagement could be an effective tool in that in that type of situation. So again, this is work by dimson at all. Coordinated engagement appears to be more successful when there is a domestic firm and and a domestic shareholders. So I just wanted to get that point across forms of engagement. We need to go beyond disclosure. Obviously it's and it's disheartening that that we're seeing pushback on even that and and less positive votes on that side of things. And then the opacity of private equity. Yeah, it's unfortunate. It makes research really difficult as well. I'm not too sure what the future if that's going to look like. Emily Allen. Yeah, I could speak briefly to her. I mean, it's not my specialty, but I think one dimension where it comes into the bond index is that there's been a trend. And I think it's been mentioned a few times by different people of high carbon intensity assets getting bought up by private equity and as part of different types of institutions. They're investment or like clean energy strategies and that having like either neutral or negative claim impacts. So one one kind of movement that's emerged on that topic is just to do to mandate closure rather than sale. So sort of like as an engagement ask requiring institutions to make that plan for the closure of the asset and factoring in as part of that the sort of like liability costs. So yeah, it's not a perfect answer and it won't apply for every sector. But kind of intervening to prevent before it sold off to private equity is like one approach that that's been coming up. Maybe just to add on the private equity thing and there are a couple of other just useful nubs here. One is that private equity tends to be more kind of concentrated in specialist firms. So you're going to want to look at the very biggest private equity firms which will have the probably the largest overall fossil fuel holdings. But then you're going to want to look at the pure play fossil fuel firms. And by the way this makes it a little easier to divest in private equity if you are an endowment or pension fund or whatever because you just have to usually you just have to get rid of the specialist funds and you're most of the way there. And I guess the other thing is to say that yeah, these are still owned by pension funds and stuff like the ultimate investors. And this actually speaks to choose our list as well. The ultimate owners of this capital is often these big institutional investors like pension funds. And so you can actually trace a lot. Yes, private equity is more opaque. Yes, it's hard to get at and so on. But many of the same owners are these institutions that we can get at. And I guess the other thing I would say is that I suspect and I don't know this but there is evidence to suggest that the threat of divestment is quite effective. And just my own experience engaging with fund managers and banks is that the threat of a client leaving a fund manager or a bank is a huge lever. And those are the ones who are executing the engagement activities, the voting activities, the bond purchases, whatever else very often. So then you've got a narrower set of targets and the power is actually back at an institution that is more likely to take the stuff on board, not a black rock. So right on time, but we will borrow a few minutes from the future. And so last comments by Igor Bronwyn and Amanda in turn. Really anything you want to comment on? Yeah, I'll just comment on the previous question because I didn't get a chance to comment on public finance actually triggering private finance. And I think the case of ECAs is quite telling because in fact, in case of many ECAs within their mandate, they are supposed to step in where the private sector does not. So where the private insurers do not provide coverage, for example, large infrastructure fossil fuel projects in developing countries like Mozambique. That's where ECAs can step in so they can really make a difference whether a project goes ahead or not. And I think that's an illustration of how public finance really can trigger additional private finance. And yeah, I'll just on domestic public finance. I'm really glad you asked because I actually think it's a really key like a gap in the data and one we used to try to cover, but it was too much. So I think looking again at maybe like who or how we can do that because I think in terms of the just transition side that there is actually on the domestic public finance there there's more examples of banks that have a creative and active role in industrial policy. So yeah, some like really cool players on that side of things. And yeah, I'll end there. I mean, I think today we talked a lot about the financing of the transition, but we need to also keep in mind that money cannot solve all the problems and we also need to keep in mind the aspects of justice. And I think all of us are also thinking about that in our research. Okay, look, great set of papers, concise and clear presentations, good questions, happy session, big round of applause, please.