 So, thank you so much for joining us today. My name is Aaron Maltes. I am the program director for the Stockholm Sustainable Finance Center, and I'm a researcher here at the Stockholm Environment Institute. And the lunch seminar today is about scaling up green finance and managing climate risk. And you see a lot of institutes here, so I'll explain a little bit about all these different organizations. SCI and CISARO, the Center for International Climate Research in Norway, have been working together on a project funded by the Marianne and Markus Wallenberg Foundation. And we're looking both at green bonds and at the way the financial sector handles climate risk in that project. We have Björn, who was speaking earlier, who's also going to be presented today. He's been working on a project on how the finance sector is helping to drive the transition to sustainability in our economies, and that's with MISTRA, through the MISTRA Financial Systems Program. And then the Stockholm Sustainable Finance Center is a SCI's new initiative in collaboration with the Stockholm School of Economics looking at sustainability and finance issues. So SCI, we're supposed to be the experts on sustainability, which we are, and Handels is supposed to be the experts on finance, which they are, and that's the collaboration. So what we're reporting on today or discussing today are research results, especially from the SCI-CISARO collaboration and from the MISTRA project. And we wanted to invite actors that we've interviewed or stakeholders in the sector in Sweden to hear a little bit about what we've learned from talking to you about these issues and the studies that we've done. And also to get feedback on ways forward, for example, for the Stockholm Sustainable Finance Center. What do you guys think we should be focusing on as we continue this work? So I think we will go straight into the presentation. And the first one will be from Asbjörn Torvagnar, from SCI-CISARO. Yeah. Thank you. Is the sound working? For the webcast? Okay. Yeah. Great. Thank you all. Yes. Welcome, everybody. I would like to talk about plant risk. Maybe for those who know this field a bit better, it sounds maybe a bit strange that SCI is working in sustainable sustainability and is going to talk about green bonds. Whereas for many of you that CISARO has been doing a lot on these green bonds, but I'm going to talk about plant risk. So I'll leave you with that small question on that and we'll see how it turns out. But to work on green bonds, you need to really work on plant risk. So I think there's a good connection there. So that's what I'm going to talk about here. And as I already mentioned, this is based on our joint project here. This is the title of the project and we have then divided it into one part for more on the green bonds for SCI and for CISARO on the climate risk. So that's what I'm going to talk about. But first, since I am not sure how much you guys know about CISARO, I just wanted to mention that this is a foundation established in 1990 and it's a topic focused center foundation because we're only working on climate. But we're working on climate research and information based on climate research. And about 80 employees located in Oslo and we are interdisciplinary. So we're working on everything from what is going on in the atmosphere when we release the gases like carbon dioxide, methane and others that cause climate change, but also on what are the impacts, what kind of policies might work or not work. So over to economics, political science and so on. And I must say few words about green bonds, even if Heidi is going to talk more about that later because this is showing the part of CISARO is working on climate finance. We can be doing that well at least for 10 years and these are the main activities we do. We do the ratings, independent ratings of green bonds and we even have a CISARO shades of green which was established last year which is a subsidiary of CISARO only doing these assessments of green bonds. But we also engage with the financial sector and we do some applied research related to climate risk for investment and this project I'm talking about here is part of that. So it's about enabling climate finance and also about climate risk management. And just a few words about what have we experienced about green bonds working with that since 2007 actually. We were the first that did an independent assessment of a framework for green bonds which was actually done by the Scandinavian Angela Banken together with the World Bank back in 2007. What we have seen is this is fast and dynamic growth of green bonds. Also remember this is actually a bottom up initiative from the finance sector. It's not the UN FCC and the climate negotiations at that level. This has been built up from the bottom up and I think that's very exciting actually. And this work, both among the issues that investors has built awareness and capacity in terms of climate issues, climate risk. One of the big issues going forward I think is to find the kind of balance between flexibility and standardisation. You all know standardisation is good because it makes comparison possible and for investors for instance it may be easier to choose where you should put your money. On the other hand you know that there is an important local context. What is green might not have the same interpretation in all countries and parts of the world. But we need to strike a balance there. That's all I wanted to say about that. Now I turn over to climate risk. Well probably all of you have seen this. These are emissions on the left and on the right temperature response on the climate system. We are here now. We are on the way to at least three degrees warming, maybe more. If countries that have pledged under the Paris Agreement to reduce our emissions do all they have said there in the pledges we might end up at three degrees which is somewhere here. The yellow line or track. But the trend now is for more than, it's higher than that. But it's possible maybe to get to three. But you all know that the Paris Agreement is talking about two degrees and even perishing 1.5 degree which is another ball game I would say. Also remember these are some, I don't need to talk about these, but these are some impacts you might see. But also remember that even if the world is now heading for three degrees it's not three degrees in Sweden. I'm not sure if all of you know that because we are talking maybe at four or five maybe six degrees because we are on the northern part of the globe and warming will be higher here than the average global. Think about that too, just as a background. So what is climate risk? Basically I think we can divide that into two categories. It's the fiscal risks. Then I'm thinking about the impacts of climate change like flooding, drought, sea level rise is more gradual and long-term because heat stress, wind, extreme weather events. I showed one extreme weather event in Oslo on the last picture. Very heavy local rain that can cause damages to buildings and infrastructure. But very local. But we also need to think about transition risks and what is that? Transition risks follows from policies, measures, investments we do to reduce the impacts, to reduce the scale of global warming, right? Temperature increase. So it's about policies, technologies. And then on the right hand here we have some, actually both types, impacts of both types of risks but more in a kind of financial tapping because this obviously can cause disruptions in terms of how different sectors, businesses operate. For instance power production, it can disrupt the supply chains, physical damage on the upper left side, of course on property. If you have flooding events, it can make a lot of troubles. But more generally it can also cause changes in prices, costs and prices. And even also demand. So actually there's no one that will be able to escape this completely. It will have impacts more or less for all the economy but some more than others. And I would like to present this graph here because it shows, let me say, this shows kind of the global situation because there is a definite relation between the fiscal risk and the transition risk. And what is the relation? Well, fiscal risk is about some type of, or some scenario of temperature change going into the future, right? But of course the temperature, that temperature story and scenario is based on some policies or no policies, right? So there is a relation between it. At the global, very general level, the relation is simple because if you, let me do it this way, if you do a little, if you do have weak climate policies, you are on this end, right? Lacks policies to reduce your emissions, then you will have much or higher climate change and more fiscal risks like flooding, extreme weather and so on. If you do more policies, then you will have more transition risk in the sense that there will be more challenges. There will be higher carbon price, much more policies, stricter policies, right? But the benefit would be less impacts, less fiscal risk. So there's a trade-off. My point is there is a trade-off. There is a relation between these, but there is a trade-off. And you have to choose something. You can't choose freely, okay? So this table only shows that there are some sectors, these are the indicators, flooding, drought, heat stress, et cetera, and showing that there are some sectors of the economy that are more broadly affected by these impacts, these fiscal impacts, for like parts of industry at least, energy sector up here, and also like agriculture, because you see that most of these indicators, possibly impacts, affect these activities, whereas others are more affected by single or a fewer of these impacts. So if you then talk about kind of scenarios, scenarios are useful. If you talk about scenarios in terms of transition and policies, this is from the World Energy Outlook, more or less, just to illustrate that while current policies will take us to 45 degrees, we have some carbon pricing in Sweden, in Norway, and some places. We have a European training system with the price on emissions. We have some efforts for energy efficiency, and we do wind and solar investments, right? If you want to go down to three degrees, as an example, we must introduce a lot of electric vehicles in transportation sector. If you want to go to two degrees, we even need to put on top of this. This is just an example of common caption storage, widespread in all use, or most uses of fossil fuels. In terms now more in the financial aspect of this, there's a lot of focus on disclosure. And the idea is that okay, there are these challenges, there are a lot of uncertainties, but both investors and society at large needs as much or as good information as possible about what are the risks, what are the challenges in my business. So one of the important milestones here is this work by the task force on planet-related financial disclosure. Disclosures, TCFD, that came out with this kind of strategy, or this framework is better to say on disclosure. So the different levels, both on the governance of a business, company strategy, risk management, metrics and targets, which I think is a very useful way of approaching the disclosure. These are important elements of disclosure on a company, but different levels. I'm sure many of you or maybe most of you have seen this before. And I also mentioned standardization. You know, how flexible should green be? How standard should that be? And there are quite some initiatives or frameworks in that. In terms of green bonds, we have the green bond principles. That is voluntary, but provides some principles on what are the major types of investments or sectors, technologies, what are procedures to carry out these investments and what about disclosure of information. And you might know that EU is doing some work on green taxonomy also, an effort to do more standardization. And there are some other initiatives, which I'm not going to hear. But I would like to say a bit more. How many minutes do I have? Five minutes, okay. I would like to say a bit more about this project we are doing with SEI and our part on climate risk. Because what we did in this was to interview representatives of major financial institutions on our part, mostly in Sweden, but sorry, mostly in Norway, but also some in Sweden. So what did we get out of that? And the aim was to find, as I say here, develop knowledge, tools to find ways to improve climate risk management in the financial sector. That was a kind of target, right? So we did the 20 interviews. These are the type of financial institutions you can see here, quite broad. And we asked them about these things. What are your perceptions about climate change? What about the risks? To what extent are you exposed to this type of risks? How do you manage that currently? And how could you improve management of climate risk? Those are the main questions we ask these guys. There is a report forthcoming on this. But I will present some of the main findings from this work. First, I divided that into two. The first one is on what are the perceptions in the business and the current management. So this is my take. I think there is a broad understanding that climate change is real. And you might think, why did I put at least impulse terms? Well, I also noted that some not all necessarily think that there will be a big problem with climate change. But they do understand that there will be climate policies. No doubt about that. So there will be more, maybe transition risk policies is a high risk than fiscal. Many also think that two degrees is ambitious. I think we share that with most of you on this. But so far they have small challenges related to both the fiscal and transition part. I would say also a take on that would be to say that you see that investments in coal is not a very good idea. So they are moving out of fossil fuels and foremost coal. They see that there are risks related to fiscal climate change. For instance, if you are into property, that type of investments and also to these policies, which is maybe even wider in terms of sectors, that climate policies will affect your business. And they also understand that this will cause changes to input factors, prices, and also changes to demand of products and services. So in other words, it will have economic repercussions in the economy. And then about what is the knowledge of the financial sector? I hope I'm not offending you, but my impression is that I think there are a few leading institutions with advanced knowledge, quite advanced knowledge on what are the challenges in terms of climate, what are the risks, and also I'd say developed capacity to handle this. Whereas there are more followers that have less capacity and knowledge about climate issues. And so far we also see that's limited response in terms of what I've done to handle climate risk better in terms of how they organise the business, in terms of the staffing and in terms of procedures. But there are some steps. There are cases where some of these institutions hire some more people on sustainability issues and green issues, social responsibility and so on. So I will end up with this one, and more on the way forward. So this is what we have picked up as the kind of, let's say, signals on really what could help financial sector to move on, to be able to handle climate risk better, to be better prepared for the challenges, both the fiscal challenges and the transition challenges, those related to stricter climate policies. So what I say is that while we need, first of all we need information and knowledge that is easy accessible. Don't give me any IPCC report. That is not easily accessible. It doesn't work for us. And it has to be useful information. It has to be fit with the business and where we are. That's also important. So they need to understand it and they need to be able to use it. Sometimes you might forget maybe the second one. They also, and then in terms of what do they need about climate knowledge? I think they need a broad overview. Everybody needs a broad overview so they can understand the landscape of this. Second, something that is much more dependent on the business area you're into. Namely, they want as much specific information on what is going to happen, where and when, and what is the kind of uncertainty related to that. And of course that is much more difficult for also for researchers to say because there are as you all know there are so many uncertain factors here. So robustness, I think general response on this is, robustness is very important. That you're able to handle different scenarios. In terms of climate scenarios, they say that this is a useful tool because you can stress test different futures, different challenges in the future. To what extent would our business, my company handle that? So it's again robustness and preparedness, important keywords I would say. And of course, often we forget that the other side of risk is opportunity. Risk in this sense means that some things will be less, well, give or have higher risk and give less return. But the other side is that other type of investments will do better both in terms of less risk and more returns at least in a bit longer term. So what are these new business opportunities? I think that's of course important also for financial sector. Finally, in terms of how do we proceed in terms of the knowledge and information needed, I think there's a kind of common or quite broad understanding that a more common language on what is green and what is climate friendly and climate robust would be beneficial because there are no many standards, many ways to think about that. So more standardization of climate relevant indicators, definitions and data collection would be helpful, not only for the financial sector investors but for society in general. However, we must not move too far because if you standardize and make this too inflexible I don't think it will serve as well in the financial sector and for the future. Because, well, let me make two arguments because there is a national context here. It's not the same necessarily the way this is considered like say in Sweden is one thing, what about France, what about the US, what about China? It's not considered in the same way. So for this to work at least broadly, you need some flexibility. And another argument I would say is that, well, after all there's a lot of uncertainty here. Technology might evolve, something that looks very good today or the best today might not be the best in five years. So we need flexibility in the system. Thank you. If you just want to wait, we need to move quite quickly and we're going to open up for some Q&A at the end of the presentations. But if anyone has one quick question and it's also one quick answer as well, they want to give right now. Yeah, go ahead. Well, we interviewed 20 institutions. Yeah, mostly Norway, some in Sweden. And I showed you what type of parts of the financial sector that was. And of course, SEI, you also did quite some interviews, but that was a bit different angle on the issues, right? Yes, we'll get to that now. So we'll have time to think about it. We come back, you have another chance to ask questions and we'll have a discussion about this. This doesn't really look like it's very centered, does it? Let's see if the next slide works. Let's see here. It's moved. It doesn't matter, we see his face, it's okay. We'll see if the next slides work. We'll start with this one. So, does anyone know who this is? No one studied philosophy like me in this room. This is Godfried Wilhelm Leibniz. He's a German mathematician and philosopher, quite famous. And he's famous for a very famous philosophical question, which is, why is there something rather than nothing? And that's basically what my study on green bonds started off with as a question, maybe a bit more academic. But we looked at, as earlier talked about, this bottom-up growth of the green bonds market. And now we're talking about the sustainable finance market of various different kinds. And why has this occurred? Why has there been so much growth in the sector? And this is especially true in Sweden. So we did an interview study, looking at the same kinds of actors Asperin did, tried to get a better understanding of the green bond sector and what it means for sustainability and transitioning our economies to sustainability. So we wanted to know, what are the incentives to buy? Now this is really not working. I can't see any of the... Let's try to restart. Yeah, great. Much better. So why do investors want to buy green bonds? That was one of our key questions. Well, they're specified and verified green projects with minimal additional risk. It makes it very easy to communicate to customers, clients, stakeholders, what you're doing with sustainability. You can point to specific projects. You can point to impact reporting, talking about the emissions that you've been able to avoid through your investment in green bonds. The business case is the motivation that investors talk to us the most about. And the business case is about attracting customers, attracting staff, those kinds of issues. It's also to educate asset managers on what good sustainability performance is within organizations, integrating financial sustainability work, and those are kind of the key incentives. We're interested... Well, but are these financial incentives for investors? Well, green bonds do not provide better returns or less risk than comparable regular bonds. I think some respondents do think of green bonds as providing less risk because the companies are greener and therefore they should be less risky. I think other respondents think that green bonds provide a little bit more risk because you're moving out of sovereign bonds and into more corporates. But in general, the trend was to say that there's not a big difference here. There's also very low willingness to accept lower returns for investing in green bonds. This was a very strong response from investors. At the same time, there was a consensus that green bonds provide lower returns in the range of two to six basis points. This is not an empirical assessment. This is what they told us. Of course, these two statements conflict with each other a bit, right? So there is some willingness to take a little bit lower returns to be able to be investing in green bonds. But it's really quite strictly limited with the message we received. Only one investor in our study indicated that Greenium was in conflict with their investment mandate. Incentives to issue green bonds. So meeting investors' desire for green investments was one of the key incentives to do this. So often issuers are approached by an intermediary, by a bank to do this. Broadening their investor base was also a very common reason. The idea wasn't that these issuers felt that there was a lack of capital, but that there was other benefits associated with broadening the investor base, such as being able to secure future financing, or if there's an expectation that there'll be requirements in the future to be able to show green credentials, to be able to access financing, or some actors even talked about being able to attract investors to their regular bonds. If they issue green bonds, they build a relationship with a new kind of investor, and then other financial relationships follow from there. Green bonds help to communicate investments and sustainability issuers have already done. So a lot of the issuers that we interviewed had already been doing a lot of work, had a lot of experience with working with sustainability, with working with reporting. So this was a great way for them to communicate all the work they have been doing on those things. Branding and a stamp of quality for the company. If you're able to issue a green bond, then that shows you're a leading organization. Actually, we didn't find a lot of the issuers talking about their own customers' demands for them to issue green bonds. It's more about the relationship with the investors. The ease of issuing, and also mainstreaming sustainability, worked within the organization. So having the finance division of the company the value of the sustainability work and what it means in terms of, for example, getting some better rates on their financing. What about the financial incentives for issuers? So again, the general trend is green bonds do not meaningfully reduce the cost of capital, but the cost of issuing is more than covered by the greenium. One respondent did actually say that the greenium can pay for additional project cost of going green. Because that's what you're hoping for if you're going to turn this into something that is scale and make a large difference. But there was only really one respondent and it was not a common response. Again, no expectation that premium can be more than two to six basis points. Clear expectation, however, that access to capital will increasingly be contingent on demonstrating green credentials. So that's clearly a financial incentive for these actors to be first movers here. So on this first question, what explains growth of the market? Well, we see weak direct financial benefits for these actors. So that's not really the explanation, but we do see stronger direct financial benefits for issuers. Rather, it's these other kinds of business case benefits that are most often mentioned. And the business case benefits are a bit stronger on the investor side than on the issuer side, however. What's really clear is that it's a very strong matching of issuer and investor incentives. They're both familiar with this low risk financial instrument. There's availability of green assets appropriate for bond financing. Green bonds are really designed to fit into the existing financing regime. And so it's very well designed for facilitating this kind of bottom-up growth. And they contribute to mandates for sustainability at relatively low cost. There are also a lot of institutional pressure that these actors face to engage with sustainability from regulation, governments, and also a lot of peer group dynamics and some competition even between actors to show that they are leading on sustainability. So the next question is, are green bonds an important tool for shifting capital from brown to green? Well, on the investor side, we asked them an open question. What do you view as the most impactful tools for green investing? And the tools most often mentioned are integrating ESG into investment decisions and active ownership. Sometimes mentioned are positive and negative screening and long-term investment strategies. So trying to think about which businesses will be viable in a 10 to 20 year range or thinking about stranded assets and then of course the screening approaches. And there was just a few mentions of green bonds. So the point here is that green bonds were not kind of said they're not good. They were extremely popular. It was for all interviewees, they were very, very positive to green bonds. But when they were thinking about ranking them as in terms of what is most impactful, they just didn't rank them as high as other instruments. So what do they think about this tool? Is it shifting capital? Well, it's not significantly increasing the amount of capital going to green investments from the investor perspective. But it does create incentives for bond issuers to shift to greener business models. It can be a first step towards making the entire bond market greener. Some other response. And it's also creating awareness among customers and the public on the links between sustainability and finance. From the issuer's perspective, it's not bringing about projects that would otherwise not have been developed. So this opportunity to be able to issue green bonds isn't making certain kinds of green investments possible that weren't otherwise possible. But it is making the case for the sustainability work organizations are already doing, right? So it's kind of consolidating that work that's important and central to the organization. It's committing those that are issuing green bonds to remain within certifications so they have to invest to ensure that those projects that they are issuing green bonds on are in fact green. And it can be a catalyzer for raising the green ambitions of specific projects and companies. And a lot of responders said that that's something that's actually happened with them. And it's highlighting that other investments are brown. And one interesting thing that people are telling us is that it's a tool for investors to actually express their demand for more green investment opportunities. So, you know, they're saying that when investors are showing that they want to invest in green bonds that there should be other impacts in the market given the level of investor demand for this kind of product. So one interesting result from the study is that green bonds are very popular because you're able to link your investment to specific green projects and be able to really communicate to customers and stakeholders what exactly it is you're investing in. Right? But when our respondents, when we ask them about impact they're really emphasizing the indirect impacts that green bonds have on the pace of change in sustainable finance. So that's one interesting one. So from our perspective, from a sustainability research institute we're saying, well how should we understand green bonds as a financial innovation? And I have a little kind of simple in Swedish, where it's just to try to get you to think about it. So, you know, what's going on with the investments approach? Do we have a lot of change or just a little bit of change? And why are they doing this? Are they doing it because there are financial incentives to do it? Or are they doing it because there's kind of legitimacy seeking some kind of indirect business case? And I'm not, I mean this is just a very simple kind of framing to say, you know, where would we place green bonds here? And so the question is, you know, the first question is well is it just the status quo innovation? You know, and I mean green bonds are not niche anymore, but they're not from our study, they're not really disruptive at this stage either. The growth is limited by the supply of green projects that could underpin investment grade bonds. They have limited impact on the supply of green projects. There's some impact, but not a large impact. Limited financial impacts. And they do consolidate commitment to sustainability of financial actors, but these actors are limited by their financial mandates. So, if you were kind of a critical reader of our study and you're saying, you know, okay, what is this? Is this just a facade? This is like an image of a Potankham village. Is it just a facade? My thought is that it's not just a facade. It is making a difference. It is pushing us towards more sustainability, but we maybe shouldn't think of it as a kind of a financing innovation that is unlocking the ability to invest in things that were not investable before. It doesn't have really that structure. I think one way to think about green bonds is as a way to standardize and scale active ownership. And actually, our respondents did view active ownership as the most impactful tool they could use. And so, if you think, for example, about the use of proceeds that makes green bonds possible, that's really the innovation and questions that we hear more and more. We're talking to financial actors, how can we do more with the use of proceeds to make that more impactful? So, I think that's a different way to think about green bonds. So, I would say that, you know, from my perspective, it's definitely green bonds are definitely kind of moving out of kind of from this area into more, we're not here with green bonds, but we're definitely moving out of this into something that really does affect the way actors operate and maybe it's helping us to get to these kinds of solutions where we ultimately want to be. Yeah, so I think I will end there on the green bonds. Yeah. Again, if you have one quick question I will give you one quick answer and then you can save the rest for later. Yeah. Anyone? What? Well, I guess in Sweden it's not niche. I guess that's your point is that there's a lot of bonds. Most of the bonds are not green, right? And it's not affected by use of proceeds. But in Sweden, the percentages are getting quite high. So, I guess it's it's not, I mean I don't have an exact definition of niche but I wouldn't say it's niche in Sweden. It's certainly not niche in terms of the level of awareness and perception on it. But yeah, I agree that in terms of the entire global bond market then it's still niche. I think also for us when we talk about transitions we think about niche as sometimes niche innovations as innovations that really have the potential should they be scaled to disrupt the whole system, right? And if green bonds as they are now maybe don't have that structure is kind of the point there that as they're scaling up it doesn't look like it's disrupting the system in terms of you're going to see huge shifts of capital going to something completely different, right? It's more about working with companies to improve their operations a bit more greener. So that's our conclusion. But if you have a different opinion we're very happy to hear about it later. Yeah. So now we're going to go over to Haiti who will talk a little bit about green bonds and how they are delivering financing to resilience and adaptation. Yes. And we have them online so let's see if everything is set up. Can you hear me? Yes we can. Please go ahead. Great. So in the same GICR project I looked into a small but growing part of the green markets discussion which is adaptation and resilience and climate resilience. So basically studies show that there's a large climate finance gap which covers both mitigation and adaptation. Estimates for what adaptation will cost us is start at 70 to 100 billion USD annually between 2010 and 2050 and our adaptation funding needs to increase multi-fold to cover those costs. So the private sector needs to be involved in this funding because it goes beyond the limits of what the public sector can do and the Paris Agreement also reflects this need for balancing the mitigation and adaptation funding. But it doesn't specify how or what balance actually means and I was actually intrigued about this topic because I kept reading conflicting things about whether green bonds held potential for private sector to fund adaptation and resilience. Furthermore as a second opinion reviewer of green bond frameworks in the CCERO-LED expert network on second opinions I increasingly saw opportunities for issuers to include adaptation and resilience in their frameworks. So this was something that kind of came about as a question slowly and I think that two screens open now. So the research questions that I focused on included looking at the needs for the private sector funding of adaptation and resilience. I also looked at whether that's apparent in the green bond issuance from the private sector and what that indicates about the overall potential to do more. And I also looked at the policy implications of this. In order to answer these questions I did a literature review. I also looked at historical green bond issuance data from a database from environmental finance which is a green market intelligence provider on green bond deals and then I also did reviews of green bond frameworks and second opinions looking for examples of eligibility criteria related to adaptation and resilience within the use of proceeds which Erin talked about. Those are and I looked at them in terms of whether adaptation was included as a project category and then also what other project categories might have examples of adaptation and resilience. In terms of adaptation and resilience needs so in reality as Aspirin mentioned earlier a lot of sectors need to adapt and this adaption needs to take place at all scales. The changes that we need to do need to take place globally but there's a special need for adaptation in developing countries based on the UNF CCC report on the INDCs and their adaptation components as well as some IFC literature the critical areas that I identified for investment into adaptation and resilience where water, agriculture health, ecosystems forestry and infrastructure which is infrastructure is a really broad category and I actually include water into infrastructure in my analysis later. Adaptation and resilience also require not only hard components investments into new assets and retrofitting old assets but they also need soft components such as capacity development awareness raising and behavior change. So there is a role I think a really clear role for the private sector in adaptation. Private sector adaptation is required for societal resilience it's not the same as societal resilience but it's a requirement because private sector owns and operates a lot of assets and infrastructure which need to adapt to climate change and these are assets and infrastructure that society depends on and their daily functioning as well as in for example recovering from disasters. Private sector also develops products and services innovations which are required for future climate change adaptation and the private sector also finances both of these. So the question of whether private sector issued green bonds can fund adaptation and resilience I think the answer is that they can so they do include as I say they can but it's another question of whether they do because what I looked at was the green bond frameworks which are potential potential and what is eligible for future funding and not what they actually have funded but under 5% of all green bonds are labeled adaptation and this means that they have adaptation listed as one of the categories in their use of proceeds in their green bond frameworks. Out of the corporate issuance category which I looked at 12% actually were labeled adaptation so this sounds like a larger percentage but this is a really small number of the 20 green bond frameworks out of the 162 which are the corporate issuances and I also found examples in private financial institution issuances of adaptation as a label but I didn't do any quantitative analysis of those and I also found that there's potential in other project categories that include adaptation and resilience activities. So what about the key sectors? I think this graph shows the split between green bonds with adaptation and green bonds without the adaptation label and this shows that they are existing in the issuances in many of the sectors that are considered key sectors. For example a lot of these sectors are falling under the infrastructure category and telecommunications was the only one that didn't have adaptation listed. Also not existing or not having this adaptation label were agriculture health and ecosystems and ecosystems are realized it's not a sector but it was an area of investment that was needed so it's a small percentage. These are some of the examples of adaptation labeled issuance that were coming out of the private sector and you can see that these investments represent changes in how these companies perform things based on their climate risk assessments. They have adequately designed infrastructure or infrastructure components such as pumps and flood defenses they figure out how to manage new conditions such as storm water different changes in storm water that are going to be taking place and also alternative ways of handling problems such as pest management and in some of the other project categories such as sustainable water management terrestrial and aquatic biodiversity conservation sustainable management of living natural resources and also green buildings. There was also indications of activities which related to adaptation and resilience and in those sometimes they didn't relate directly to adaptation and resilience in terms of mentioning some kind of activities based on risk assessments but some of them also were things that could benefit adaptation and could support adaptation especially if it was based on a risk assessment. These here that I have listed were some of the examples 15% of the corporate issuance contains sustainable water management as a category of eligibility within their green bond frameworks. So I think there is some room for growth there. For example the Agua Sandinas the water supply company they wanted to ensure that their water supply would continue in case of extreme river turbidity. The city development property developer they wanted to reduce their water consumption linked with problems or future expected problems with water availability and the terrestrial and aquatic biodiversity conservation and sustainable management of living natural resources project categories I see these as ways for corporations or private sector to actually be investing into this ecosystems category of investment need as identified earlier which didn't have any direct sectoral or in the graph that I showed earlier it showed that there wasn't any sector like private sector kind of directly investing in that. Also green bonds has links to adaptation so green buildings So looking at the limitations to scaling up I think one of the limitations is the low understanding of risk that corporations have and this was something that Aspir talked about there's a lack of understanding and there's also a lack of these easy to use tools for corporations to use I think this is kind of a first step for taking actions and making those investments into a company. There's also a little bit of a mismatch for adaptation and resilience needs. Particularly as you can see in this graph that there's a lot investments in many of the areas of the world that corporations can make through their green bonds that have adaptation listed as a category but actually the Middle East and North Africa is the only region where there's none. In terms of scale green bonds also are skewed towards larger investments and larger actors which leaves out some of these small actors and small investments which are necessary for adaptation and resilience such as a small holder agriculture. In terms of the types of investments I think green bonds probably favor these hard components but I think if we think in the future of adaptation and resilience as something that's more integrated into green bond frameworks across sectors then some of these softer components can also be integrated into these projects. There's studies that show that many projects are successful only if they have some of these soft components to complement the hard components investments. So in terms of recommendations I think there needs to be work on increasing the awareness of climate risk and its relevance to some of these key sectors and also understanding enhancing the understanding of how to assess this risk. As I said this is the first step to getting issuers and investors to act. I think also adaptation should be presented more as an integrated component rather than a separate project category. In many of the guidelines currently used adaptation is a category which is different from mitigation so it gives the exception that it's somehow more limited or that it should be like a standalone kind of project but in reality I think it needs to be integrated into many of the investments that are made. I think the climate bond standard has taken a more integrated approach and is rolling this kind of integrated approach out across what they consider the relevant sectors. I think we have the advantage of second opinion reviews to highlight whether green bond frameworks account for climate risk and this is apparent already in some second opinions such as those done in the CSERR network and my own experiences that issuers can learn and even improve upon the quality of their green bond frameworks within the review process. And lastly I think we should make use of the guidance and standards such as the coming EU green bond and enhance the understanding of how companies can include adaptation and resilience into their frameworks and I think one of the things that was nice to see was that the EU taxonomy which is proposed should include kind of an indicative list of adaptation related activities per sector that would kind of be valid under most circumstances and I think that would be helpful to provide companies with the examples of what they can and should be doing. So in conclusion I think it's possible that corporate issues of green bonds can help increase the level of adaptation finance but I think that currently it's small I think it can grow some and I think that there's still some hurdles to overcome before it makes a significant contribution. Thank you. So we have see if there's any questions so outstanding with some recommendations at the end there maybe that sparked some interest. Does anyone have a quick question for Heidi before we move on? No? No? Okay. Great then we'll go over to Björn who will talk a little bit about the big picture. Switch back now to the form set up. Okay. So thanks my name is Björn Epis working here at UCI and as I mentioned in the beginning sort of a sister project the Wallenberg project that funded the green bond studies so we conducted a lot of this work together and you will see some narratives being the same although I here scale up to the more societal level challenges of what sustainability transitions entails and what the role of the finance sector is in this. So I come from more of the energy transport sector background here in terms of research on this so this is one example that I've worked with recently electric road system technology which is if we apply this to freight transport for example a rather massive investment in a totally new infrastructure to roll out and if we consider for example Stockholm Malmö it's on the order of 10 billion crowners to do and that's the only one of the big stretches then so this is really a massive type of capital investment and here are some other examples that I think many of you know about the vocal examples of Tesla in US there is their giga factory with a giga need of investments in dollars. We have the Swedish example of Northwalt and we are again talking on the same type of order of magnitude here with perhaps tens of billions of dollars in investment needs and that this is really shaking up big sectors of the Swedish economy if this transition is to unfold. And final example here from hybrid which SCI and I have a small share in on how to decognize the steel sector in Sweden so behind this nice infographics here on what we are to do in this project it's reducing on the order of 10% of the Swedish CO2 emissions it's over a few decades it's a massive undertaking which cost a lot of money and you really need aerial footages over these industries in order to capture how big they are and it sort of illustrates how big of an investment this is. I think it's important to understand that these are not an easy feat and it's a lot of capital involved. So for me if we attack the role of the finance sector and sustainability transitions together this issue of scaling up this it's really it's about meeting the climate goals in Sweden which are in line with the Paris Agreement and it equals finance for very large scale solutions and industrial transitions. So with this in mind then our research questions on this part of this joint project was to really look at the role of the finance sector. How is the finance sector viewing this challenge what motivates us to engage and what can the sector do to contribute to such large scale sustainability it's obvious that they have that sector has a role but how do you confront this and how do you engage with it and how can society and policy makers stare at this what intervention would facilitate this transition and accelerate it further and again we it's interview based as the other many of the other studies you hear about here and we interviewed actors across sector the sector both private and public and many of them were the same so opportunities to talk to us as Aaron mentioned before but a big overlap there. So you will see that some of the generic results are quite similar to the specific green bond results that Aaron talked about but here we're scaling out and broadening a bit. So there's really an explanation here that is important and that there's a sea change of interest change over time and quite recently in how one engages with sustainability in the final sector it's explained to us very recently that this have taken hold in earnest so like two to five year time frame that before that there was not really much interest so there's like quite rapidly build up here of peer pressure and interest from institutional investors and that the pressure is building up to engage in this so therefore we see these reasons to engage with sustainability finance in general not only green bonds that Aaron explained but that it's becoming strategies becoming important in order to attract talent and customers and investors and so on and by and large was most spread in the sector in terms of tools and approaches as ESG screening and ESG factors in different using that in different ways so to some it's actually a value proposition that you do stock picking but more broadly it's about risk management as many of you know so that is natural and really becoming mainstream so there is a lot of good progress we have the good example of green bonds we use screening and ESG as I mentioned so we could really view that as the glass being half full we are really getting there and there is a lot of good progress or what is lacking then and what is the actual challenges with these very large transitions that I showed in the beginning so over to the barrier side here and the challenges going forward so underlying all of these results or very strongly in our interviews was this pattern of relating to risk reward which is of course natural for the sector so the first points here are that it's really important to understand that these technologies and infrastructure endeavors that we are talking about here they are inherently more risky because they are transformative so it goes without saying and since it's a lot of money they are supposed to be financed by actors and types of investments that has a low risk profile because it is large sums of money so there is some kind of mismatch here in the scale of financing versus the risk type of risk that we see in these projects so I won't go over the green bonds in any detail here but that's one of the key examples and you see the same types of conclusions that Aaron put forward here that I illustrated with that it's really not additionality it's not there the risk is the same etc so it's it's rather an incremental innovation that perhaps cannot really fulfill this this function of scaling up these technologies so it's important but perhaps not the driver so another point that's important to make is that when we talk to actors in the sector it's quite clear that one wants to engage and one wants to invest in all of the green bonds that are it's not a lack of interest or capital or willingness it's the projects fulfilling the specs of what a green bond is it's a lack of those that is the problem so obviously they don't match these large scale infrastructure and technology developments that I illustrated in the beginning so moving to the reward side of the risk reward premise that we think analyze all this here it's also important to remember that it's very uncommon for obvious reasons that you want to forgo returns or add additional costs onto your financial instrument or ways to engage because it's of course engraved in the corporate strategy and culture it's both informal and formal regulations on this in different ways and shapes and forms so pension the public pension funds they cannot go too far out to venture into other types of investments they have the same type of pressure to deliver returns as the private side and we have of course fiduciary duty to shareholders in association law and scaling out further we have the the difficulty for the government for the parliament to decide on the budget that goes with too much of a deficit so there's like a narrative here on that you cannot really change the requirements of reward or add costs in order to solve this either so again it's sort of the overarching impression is that we do what we can basically that's the message that I want to portray here so on both sides of this risk reward premise so how can we loosen up this then what can we do in order to to foster a faster transition and make ends meet here in terms of the needs for capital and the risk problem so at the outset of this project we really wanted to include the policy dimension clearly and we thought about it in terms of looking at sector specific policies of financial sector policy how can we steer this to the right hand side in this simple four-filler and the upper part is what's of interest so policy or governance motivated by sustainability we don't want to engage with other types of politics or policies so we were asking in our interviews for input here what can we do what would be useful for the sector how should we govern this and what came back was perhaps not that surprisingly quite a lot of resistance to more regulation I mean this is already heavily regulated sector and one is afraid of more regulatory burden one is a bit afraid of more standards and they're very aware about the flexibility that has been mentioned towards the end of this presentation that it's difficult to impose more standards of regulations on this so for example if it's carefully a lot of careful wording on requirements will see you to put printing and so on and more requests for gradual self-governance perhaps and in general a very negative view on capital requirement the practical requirement question there is some variation there but by and large and shared by the public authority monitoring this that we shouldn't fiddle with capital requirement perhaps unnecessarily so a lot of resistance to sector specific policy basically so crossing that out almost as a sort of option potentially so this is up for debate of course so instead what we got back is a lot of requests for stronger generic CO2 policy, climate policy and requests for the government to really take initiative and facilitate to point with the whole hand on what were we supposed to do, how are we supposed to solve this and what it boils down to for me as a researcher what we have started to discuss and explore more under the center here is that this is about risk sharing this is really about how private and public can collaborate on this issue to solve this problem of the elevated risk for the final sector so that's my final slide and take home message on that topic that what does this risk sharing really entail and I hope we can discuss a bit on that after the presentations that does this mean more private public partnerships we haven't had that as much in Sweden and it's debated quite a lot in the literature we have one famous example that is perhaps successful with the bridge to Denmark which has such a type of construction it's really a special case with a special type of financing and how it's constructed so do we need to do more of that, more special arrangements in order to realize these type of technologies or can we solve it with sort of procurement sessions and other mechanisms of securing finance with low enough risk to get this going so a dialogue on how to create this and develop new models for this type of financing I think is very important thank you