London, 29 January 2010

An independent report by PricewaterhouseCoopers LLP, commissioned by The Climate Group, shows good progress from the founding members of the Climate Principles. Market leading initiatives have been launched in research and insurance/reinsurance but more needs be done in retail banking and project financing in 2010. The review points to the “huge opportunity” for financial service products to help consumers invest in the low carbon economy and reduce their own carbon footprint.

The Climate Principles, the first comprehensive framework to help financial institutions manage the risks and opportunity of climate change were launched in December 2008. The founding members assessed in the report, Credit Agricole, HSBC, Munich Re, Swiss Re, and Standard Chartered Bank represent US$5.5trillion in assets and over 150 million customers worldwide.

Speaking at the launch in Davos, Jon Williams, Partner, Sustainability and Climate Change, PricewaterhouseCoopers LLP said:

"The finance sector has had much to deal with over the past twelve months and it shows real bravery to launch and implement the Climate Principles in the face of the crisis. It takes even more courage for these five organisations to subject themselves to an independent review of their progress."

The report finds that insurance sector has been particularly successful in converting knowledge into new products and services. Munich Re and Swiss Re both offer products that minimise the financial stress of changing weather patterns and extreme weather events. Banks are also advancing development of specific climate related funds and indices to make it easier for investors to take advantage of a low carbon economy.

Jon Williams, Partner, Sustainability & Climate Change, PricewaterhouseCoopers LLP further commented: “The group has made good progress on implementing the Climate Principles across many aspects of finance. We have seen strong examples of leading practice. However, more can always be done and two areas in particular stand out for focus in 2010 – project finance and retail banking.

“Institutions should aim to improve disclosure on their approaches to financing carbon intensive projects, and their strategies to align lending portfolios with carbon targets in the countries where they operate. Developing products and services for consumers to help them address personal carbon emissions and invest in the low carbon economy is another area of potential opportunity that is currently under-served.”

“Financing was one of the few bright spots in Copenhagen, with the Accord including details of US$30 billion for the period 2010-2012 alone. This represents a huge opportunity for the financial services sector, but they can’t do it alone. National and international regulation will be the most important driver of low carbon investment in the private sector.”

Steve Howard, CEO The Climate Group and Chair of the World Economic Forum’s Global Agenda Council on Climate Change, said: “The finance sector is alive to the risks and opportunities posed by climate change. This group of leading financial institutions is already charting a clear course for the low carbon economy. Policy uncertainty makes their passage more challenging, but the low carbon opportunity is so profound that banks are not waiting for government to fire a starting pistol. As the policy fog lifts over coming months, our Climate Principles will act as a crucial low carbon compass for the finance sector and allow other international institutions to follow swiftly the wake of these pioneers.”

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