Green financial solutions | WWF South Africa

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Green Financial Solutions

WWF’s Green Financial Solutions support the shift from unsustainable financial practices to a framework that integrates long-term environmental sustainability principles into investment portfolios. We develop and support both effective and credible standards and metrics and green financial mechanisms and solutions that are relevant to mainstream asset owners and enable them to allocate investments sustainably.

What is the issue?

Environmental risks and opportunities are becoming increasingly important to financial decision-making. Some actors in the finance sector have made tremendous strides in their approach to incorporating environmental risks in their business models and there is growing interest in the investment opportunities shaped within frameworks like the Sustainable Development Goals, the Paris Agreement and the principles of a circular economy.

At the moment, financial returns are still largely dependent on unsustainable consumption of natural resources and lacks the integration of environmental impacts. The finance sector at large does not have an adequate strategic response to the financial, business and long-term sustainability risks caused by environmental issues. And, too few are taking advantage of the opportunities afforded by a longer term view of sustainability.

WWF has identified finance as a key programmatic focus because our global finance system enables all types of economic activity that can have a significant impact on our planet.

What are we doing?

We work with key financial institutions to drive business change, advocate for policy shifts towards sustainability, develop best practices and standards, and support innovative public and private sector financial frameworks and mechanisms that encourage environmentally sustainable, low carbon and resource efficient investments.

How do we do this?

We are interested in the way money, public or private, moves and our aim is to push for a measurable increase in public and private financial flows toward sustainable development in support of our six major goals (oceans, land, wildlife, food, climate and energy and water) and more generally toward  the Sustainable Development Goals, redirecting those financial flows to ensure that money is invested in sectors that have a lower impact on the planet and moving away from financial systems that favour short-term returns over long-term wealth creation that supports inclusive development and protection of natural assets.

WWF’s objective is to encourage a meaningful shift in finance to achieve the WWF Global Goals. Using the familiar finance framework of risk and opportunity, we believe we can: 1) influence finance to improve integration of environmental risks; 2) encourage finance to deliver greater investment for sustainable development; and 3) use the influence of finance in turn to drive sustainable practices through the rest of the economy.

Who do we work with?

WWF has been working with the finance sector for more than a decade in innovative collaborations that seek to establish green financial solutions, integrate environmental, social and governance risks and opportunities into mainstream finance and to redirect financial flows to support the global sustainable development agenda. WWF has also worked for longer with bilateral and multilateral development partners to ensure that that environment protection is integrated into development finance plans and financial mechanisms that support biodiversity conservation are available.

WWF works in close collaboration with our investment partners to integrate environmental sustainability aspects into portfolios investments.

How did it start?

We identified the opportunity and need to influence and mobilise private sector asset flows and investments towards environmentally sustainable investment paths and away from areas that cause the degradation of our planet.

Our approach focused on proactive solutions, engaging with leading financial institutions and working with them to develop and establish investment products to attract mainstream investment flows. For this to work, the product solutions had to be market competitive to attract asset owner attention.

One of the first initiatives was establishing a collaborative partnership with Prescient Investment Management which then led to the establishment and launch of the Prescient Living Planet Fund which now manages in excess of R700 million. It is a regulated investment fund that aims to deliver sustainable long-term capital growth for its investors within a framework that works towards the sustainability of the natural environment. The Fund's environmental footprint, including water usage and other metrics, are measured through advanced data analytics provided by international metrics supplier S&P Trucost.

What are the big wins?

  • In May 2018 the Prescient Living Planet Fund reached a three-year milestone showing competitive performance delivery against peers in the ASSIA multi-asset category.

  • The Green Outcomes Fund was established in partnership with the University Of Cape Town Graduate School Of Business Bertha Centre, Greencape and the World Bank. The Fund is an innovative green financial solution that channels finance and investment towards small and growing green businesses.

  • With Alexander Forbes Investments we have engaged with over 10 of South Africa’s leading asset managers with an asset base of over R2 trillion on aspects of environmental sustainability and risks.

  • WWF South Africa plays an influential and important role in the WWF International Network where its head of Sustainable Investment Solutions serves on the Global Finance Practice Leadership team and is also the lead for the WWF’s International Green Financial Solutions area of action.  

Disclaimer:

Prescient Investment Management (Pty) Ltd, is an authorised financial services provider (FSP 612),Collective Investment Schemes in Securities (CIS) should be considered as medium to long-term investments. The value may go up as well as down and past performance is not necessarily a guide to future performance. Collective investment schemes are traded at the ruling price and can engage in scrip lending and borrowing. A schedule of fees and charges and maximum commissions is available on request from the manager. Performance has been calculated using net NAV to NAV numbers with income reinvested. There is no guarantee in respect of capital or returns in a portfolio. Prescient Management Company (RF) (Pty) Ltd is registered and approved under the Collective Investment Schemes Control Act (No.45 of 2002). For any additional information such as fund prices, fees, brochures, minimum disclosure documents and application forms please go to www.prescient.co.za.