Presentations - Inaugural Conference with Financial Institutions

Presentations Inaugural ConferenceWith Financial Institutions

Eastern Caribbean Central Bank Headquarters, St Kitts and Nevis 7 November 2019

Banking the Cannabis Sector- Considerations & Challenges

Carrie Nelson, Senior Director AML Advisory

Disclaimer

Please note that the content of this presentation and any related supporting materials are provided for informational purposes only. It is not RBC’s intention to provide you with legal or business advice, but rather to describe risks and mitigating measures as they relate to RBC.

This content is proprietary to RBC.

Legislative Landscape

 The Cannabis Act was passed in June 2018 and came into force on October 17, 2018. This legislation creates a framework for legalizing and strictly regulating cannabis in Canada  Federal and provincial governments have different responsibilities in terms of oversight and licensing  Provincial distribution schemes vary across the country  It is important for us to transact only with legitimate and properly licensed Canadian cannabis entities

Canada

 Marijuana is illegal in the U.S. at the federal level (schedule 1 drug) , regardless of where and for what purpose it is used  Over half of the states in the U.S. have legalized the use of marijuana to some extent despite the fact that it remains federally illegal  The inconsistency between federal and state laws, and the uncertainty surrounding possible federal prosecution have resulted in the reluctance of financial institutions to bank this industry  As a result of the federal illegality, transactions with U.S. marijuana-related businesses (USMRBs) can be violations of U.S. money laundering laws  Preventing and detecting direct or indirect financial interactions with USMRBs is critical to our ability to mitigate U.S. AML risk

U.S.

Caribbean

 Several changes are taking place within the Caribbean regions and we will continue to monitor the legislation.

Industry Participants (Canada)

Financial Institutions should set out a risk appetite in order to mitigate the money laundering and reputational risks emanating from the cannabis industry.

Canadian Producers

Canadian Distributors

Others







Licensed

Canadian ancillary businesses (see table below)

Personal clients (e.g. employee, investor, beneficial owner)







Licensed

Licensed

Licensed



Public or government- operated

Type











Public or privately-owned

Unlicensed

Privately-owned

Privately-owned

Unlicensed





Large

Small

Primary Ancillary

Secondary Ancillary

Tertiary

Business that provides products/services that are incidental to the cannabis industry, and are not directly involved in the manufacture, production, distribution and/or sale of cannabis

Business that provides products/services used directly and exclusively in the manufacture, production, distribution and/or sale of cannabis

Business that provides products/services that are not exclusively used in the cannabis industry

Definition

 Accessories for consumption (e.g., rolling paper, vaporizers)  Fertilizers  Lighting  Landlords for properties where cannabis is produced  Specific cannabis consulting and professional firms 

Financial services (e.g., accounting, lending) providers  Consulting firms that provide IT, marketing, research services  Pre-fabricated, multi-purpose building supplies  Caterers  Landlords for multi-use properties where cannabis is distributed or used as administrative offices of MRBs

 Specific-purpose production supplies (e.g., hydroponics extraction or cultivation equipment)  Payment processors exclusive to MRBs  Licensors of intellectual property services to MRBs

Examples

Challenges/Risks

 Ensure licensing regime implements a comprehensive seed to sale tracking system

 Correspondent banks risk appetite may not align with local FI’s risk appetite and industries

 Laws and legal ramifications per country-

 Transparency on source of funds/activity (downstream clearing/nesting)

 Understanding the corporate structure of the cannabis entities

 Cost of Compliance – risks may outweighs the reward of sector

Examples of AML Program Controls for Cannabis Entities

ML program controls for cannabis entities should consist of a tailored combination of the following elements :

Enhanced due diligence review for all MRBs (i.e., producers and distributors) at onboarding and periodically thereafter, or upon trigger events, and on ancillary businesses based on a number of risk factors such as proximity to the cannabis industry; including a review of:

 Licensing, independent reports and additional information available through Health Canada, which lists violations for various companies



Relevant adverse information



Account activity reviews

Ongoing screening of all client records and transactions to identify illegal cannabis-related transactions

Tailored enhanced transaction monitoring on MRBs and primary ancillary businesses for cash and other payment instruments, as well as screening wire payments involving specific jurisdictions

On a risk based approach, a targeted third-party review by external consultants on MRBs (producers and distributors) and primary ancillary businesses to assist in decision-making at onboarding and periodically thereafter

BANKING MEDICAL CANNABIS:

FARFETCHED OR FEASIBLE

PRESENTER: DERRY WILLIAMS

MANAGING DIRECTOR

BANK OF ST.VINCENT & THE GRENADINES

01 NOVEMBER 2019

MEDICAL CANNABIS GAINS TRACTION GLOBALLY UNITED NATIONS SINGLE CONVENTION ON NARCOTICS DRUG (1972) ARTICLE 4 - GENERAL OBLIGATIONS “THE PARTIES SHALL TAKE SUCH LEGISLATIVE AND ADMINISTRATIVE MEASURES AS MAY BE NECESSARY: SUBJECT TO THE PROVISIONS OF THIS CONVENTION, TO LIMIT EXCLUSIVELY TO MEDICAL AND SCIENTIFIC PURPOSES THE PRODUCTION, MANUFACTURE, EXPORT, IMPORT, DISTRIBUTION OF, TRADE IN, USE AND POSSESSION OF DRUGS.”

ARTICLE 23 ESTABLISHING A LOCAL AGENCY

ARTICLE 28 CONTROL OF CANNABIS PRODUCTION & SALE

STATISTICS

SOME 33 DEVELOPED COUNTRIES AND 15 DEVELOPING COUNTRIES HAVE LEGALISED THE USE OF MEDICAL CANNABIS, WITH MORE COUNTRIES ADVANCING LEGISLATION TO LEGALISE THE USE AND DISTRIBUTION OF SAME. WITHIN THE USA SOME 37 STATES, DISTRICTS AND TERRITORIES HAVE LEGALIZED MEDICAL CANNABIS

ACARICOM INITIATIVE REPORT OF THE CARICOM REGIONAL COMMISSION ON MARIJUANA RELEASED IN 2018

• RECOMMENDS LEGALISATION AND / OR DECRIMINALISING OF CANNABIS

• INDICATES THIS APPROACH WILL REMOVE THE STIGMA, REDUCE THE ILLICIT MARKET TRADE, & REMOVE PROBLEMS RELATING TO PROCEEDS OF CRIME

• CAN PROMOTE ECONOMIC DEVELOPMENT DUE TO THE SIGNIFICANT EARNING POTENTIAL OF MEDICAL CANNABIS

LEGISLATURE GOVERNING THE INDUSTRY MEDICINAL CANNABIS INDUSTRY ACT 2018 ESTABLISHES A MEDICINAL CANNABIS AUTHORITY TO • DEVELOP POLICIES, & GUIDELINES FOR THE INDUSTRY • REGULATE THE CULTIVATION, SUPPLY, POSSESSION & USE OF MEDICAL CANNABIS • CONDUCT REVIEWS OF MEDICAL DOCTORS CERTIFICATES • ISSUE LICENSES TO PARTICIPANTS • OUTLINE ALL PERMISSIBLE ACTIVITIES OF INDUSTRY MEMBERS

ESTABLISHES A BOARD OF DIRECTORS TO

• MONITOR THE ADMINISTRATIVE OPERATIONS OF THE AUTHORITY • ADVISE THE GOVERNMENT ON POLICY DECISIONS

ESTABLISHES A MEDICINAL CANNABIS ADVISORY COUNCIL TO • ADVISE ON THE PROPER USE OF MEDICAL CANNABIS • DIRECT THE RESEARCH OF MEDICAL CANNABIS • DECIDE THE LIST OF QUALIFYING MEDICAL CONDITIONS

BANKING CANNABIS: KEY RISK MANAGEMENT COMPONENTS THE BANKING OF MEDICAL CANNABIS BECAME LEGAL IN SVG WITH THE PASSING OF THE MEDICINAL CANNABIS INDUSTRY ACT (2018). IN THIS VEIN THE BANK DEVELOPED A POLICY ALIGNED WITH THE CONVENTIONS OF THE UN AND THE STIPULATIONS OF THE MEDICINAL CANNABIS INDUSTRY ACT (2018)

BOSVG MEDICINAL CANNABIS INDUSTRY POLICY

• LIST SPECIFIC FUNCTIONS THE BANK MUST PERFORM TO ON-BOARD, MONITOR AND MITIGATE RISKS WHEN DEALING WITH INDUSTRY PARTICIPANTS • FOLLOWS THE THREE LINES OF DEFENCE MODEL • LIST PROHIBITED AND RESTRICTED SERVICES • LISTS WHO IN THE INDUSTRY THE BANK WILL DO BUSINESS WITH • CLEARLY OUTLINES WHEN THE BANK WILL DERISK

BOSVG MEDICINAL CANNABIS INDUSTRY FRAMEWORK

• PROVIDES AN OPERATIONAL OVERVIEW OF HOW THE BANK WILL EXIST WITHIN THE MEDICAL CANNABIS SPACE • SPEAKS TO OUR INTERACTION WITH INDUSTRY MEMBERS, INTERNATIONAL AGENCIES & CORRESPONDENT BANKS • CLEARLY DEFINES THE ON-BOARDING PROCESS AND STATES AT WHAT LEVEL APPROVAL FOR TRANSACTIONS WILL BE DONE • IDENTIFIES THE RISK IN THE INDUSTRYAND HOW THE BANK PLANS TO MITIGATE THEM

CORRESPONDENT BANKING & DERISKING

• BIGGEST CHALLENGE WAS DETERMINING WHO WOULD OFFER BOSVG CORRESPONDENT BANKING TO FACILITATE THE INDUSTRY

• ONGOING RISKS ASSOCIATED WITH USA BANKS WHO MAY WANT TO DERISK BECAUSE MEDICAL CANNABIS IS ILLEGAL AT THE FEDERAL LEVEL

• SHARED OUR POLICY & FRAMEWORK WITH ALL OUR CORRESPONDENT BANKS TO PROVIDE SOME LEVEL OF COMFORT TO THEM

• CANADIAN COUNTERPART WAS PLEASED WITH OUR DIRECTION AND THE CONTENTS OF OUR POLICY AND FRAMEWORK, INDICATED THEY WOULD OFFER US BANKING SERVICE IN CANADIAN DOLLARS ONLY

• CONSTANT ENGAGEMENT OF OTHER KEY REGULATORS INCLUDING THE MEDICINAL CANNABIS AUTHORITY, GOVERNMENT OF SVG, AND OTHER GOVERNMENT REGULATORS INCLUDING THE FINANCIAL SERVICES AUTHORITY

• ENGAGED OUR REGULATOR AND RECEIVED A COMMITMENT AND AN UNDERSTANDING FROM THEM REGARDING OUR BANKING MEDICAL CANNABIS

OPERATIONAL STRUCTURE RISK MANAGEMENT METHODOLOGY

• SEPARATE UNIT WAS FORMED TO TREAT SOLELY WITH MEDICAL CANNABIS. THIS WAS DONE TO AVOID CONTAMINATION WITH THE OTHER BANKING SERVICES WE OFFER. THERE ARE 3 FULL TIME STAFF INCLUDING A SENIOR OFFICER WHO REPORTS DIRECTLY TO SENIOR MANAGEMENT

• AS A SECOND LINE OF DEFENCE ANOTHER KEY ROLE WAS CREATED IN THE COMPLIANCE DEPARTMENT TO MONITOR SPECIFICALLY THE ACTIVITIES OF THE SECTOR

• THE INFORMATION SYSTEM HAD TO BE SPECIFICALLY REDESIGNED TO FACILITATE ENHANCED MONITORING OF THE PORTFOLIO AS WELL AS TO ENSURE THAT ALL EDD MEASURES AND PROHIBITIONS WERE CAPTURED AND ENFORCED

• DUE DILIGENCE IS PERFORMED BEFORE ACCEPTING WIRE TRANSFERS

• PROHIBITIONS AND EXCEPTIONS ARE CLEARLY OUTLINED TO THE CUSTOMER IN THE FORM OF AN OFFER LETTER

• THE BANK, AT THIS TIME, HAS NOT DONE ANY ON-BOARDING OF LICENSE HOLDERS BUT PAYMENTS FOR LICENSES ARE BEING PROCESSED THROUGH OUR CANADIAN CORRESPONDENT

THE POCACONUNDRUM THE ISSUE

WILL THE BANK BE ENGAGING IN MONEY LAUNDERING IF THEY FACILITATE THE MOVEMENT OF PROFITS EARNED IN SVG TO ANOTHER JURISDICTION WHERE MEDICAL CANNABIS REMAINS ILLEGAL?

• THE BANK IS COGNIZANT OF THE VARIOUS LEGISLATURE THAT GOVERNS EACH COUNTRY AND WIL OPERATE WITHIN THE LAW

• A UNIQUE SITUATION HAS DEVELOPED WITH CITIZENS OF THE USA BECAUSE OF THE QUAGMIRE THA EXISTS BETWEEN STATE AND FEDERAL LAW

• A LEGAL OPINION ON BANKING USA CITIZENS IS BEING SOUGHT AS WE ARE NOT CERTAIN AS TO WHETHER USA CITIZEN WHO ARE OWNERS, SHAREHOLDER, DIRECTORS, & OR BENEFICIAL OWNERS CAN OPERATE IN OUR INDUSTRY WITHOUT BEING IN CONTRAVENTION OF ANY USA LEGISLATURE

• AT THIS TIME WE ARE NOT OFFERING BANKING SERVICES TO USA CITIZENS

WHAT ROLE CAN THE ECCB PLAY

• CONDUCT MORE RESEARCH REGARDING THE MEDICAL CANNABIS SECTOR IN ORDER TO PROVIDE STANDARDIZED GUIDANCE TO ECCU BANKS

• WORK WITH REGIONAL AND CORRESPONDENT BANKS, PARTICULARLY THOSE IN THE USA, IN AN EFFORT TO ENSURE THAT ALL PARTICIPANTS ARE KEPT INFORMED ABOUT CHANGES IN BANKING MEDICAL CANNABIS

• A LEGAL OPINION SHOULD BE SOUGHT FROM A USA LAWYER BY THE ECCB ON THE MATTER OF USA CITIZENS ENGAGING IN THE MEDICAL CANNABIS INDUSTRY

SAFE & STATES ACT SECURE AND FAIR ENFORCEMENT BANKING ACT

• INTRODUCED ON 7 TH MARCH 2019 TO PREVENT FEDERAL BANKING REGULATORS FROM SANCTIONING BANKS FOR WORKING WITH LEGAL CANNABIS BUSINESS, EMPLOYEES AND ANCILLARY SERVICE PROVIDERS.

• PASSED THE HOUSE OF REPRESENTATIVES

• REFERRED TO THE SENATE COMMITTEE ON BANKING, HOUSING & URBAN AFFAIRS ON 26 TH SEPTEMBER 2019

STRENGTHENING THE TENTH AMENDMENT THROUGH ENTRUSTING STATES ACT

• INTRODUCED ON 4 TH APRIL 2019 TO AMEND THE CONTROLLED SUBSTANCES ACT TO PROVIDE FOR A NEW RULE REGARDING THE APPLICATION OF THE ACT TO CANNABIS.

• A SIMILAR MEASURE S.1028 INTRODUCED IN THE SENATE

• BOTH MEASURES ARE AT COMMITTEE STAGES FOR REVIEW

FEASIBLE OR FARFETCHED

• BANKING MEDICAL CANNABIS IS LEGAL IN SVG

• AN INTERNATIONAL BANKING RELATIONSHIP EXISTS WITH CANADA

• EURO CLEARANCE WILL BE PURSUED IN 2020

• A MAJOR IMPEDIMENT IS THE POSSIBLE DERISKING BY USA CORRESPONDENT BANKS

• THE BANK HAS MULTIPLE USA CLEARINGS AND IN THE EVENT THAT ANY ONE DERISKS WE WOULD BE IN A POSITION TO SALVAGE THE RELATIONSHIP WITH THE OTHER BANKS

• THE BANK IS ALSO PAYING ATTENTION TO THE ONSITE VISITATION/ COMPLIANCE QUESTIONNAIRE BY OUR CORRESPONDENT BANKS TO MONITOR THEIR REACTIONS FOR ANY RED FLAGS THAT MAY SUGGEST THAT WE REVERSE COURSE ON BANKING MEDICAL CANNABIS

THANK YOU!!

Retail Central Bank Digital Currency Operational Considerations

NOVEMBER 7, 2019

John Kiff, Monetary & Capital Markets

1

INTERNATIONAL MONETARY FUND

The views expressed herein are those of the author and should not be attributed to the IMF, its Executive Board, or its management

2

INTERNATIONAL MONETARY FUND

A Money Matrix (An Alternative to the BIS “Flower”)

CBDC Retail

Cash

Central Bank issued

Legal Tender

Optional

Optional

Optional

Synthetic CBDC

Central Bank-backed

Asset- Backed Stablecoin s (e.g. USDC)

Fiat Pegged

Payment Crypto Assets (e.g. BTC)

Peer to Peer (1)

Programmable

(1) Person to person, bank to bank, merchant to merchant, etc. (2) Adrian (2019)

3

INTERNATIONAL MONETARY FUND

Current Projects (as of Nov 2019)

4

4

INTERNATIONAL MONETARY FUND

Central Bank CBDC Risk Landscape

Strategy & Policy Risks

 Financial Integrity  Monetary Policy  Financial Stability  Financial Inclusion  Payment Systems  Consumer Protection

 Fraud  Legal  IT Infrastructure  Cybersecurity  Culture, Behavior

Reputational Risks

 Liquidity  Market  Credit

 Outsourcing / 3 rd party  Governance, Decision- Making  Process, Project Mgmt

Financial Risks

Operational Risks

5

INTERNATIONAL MONETARY FUND

CBDC Operating Models - 1 From a high level, the actual work of issuing CBDC is quite like that involved in the management of physical cash

C ASH C URRENCY - T RANSFER OF P OSSESSION

CBDC - T RANSFER OF P OSSESSION

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INTERNATIONAL MONETARY FUND

Putting the Implementation Process All Together

Financial Integrity, Monetary Policy, Financial Stability, Financial Inclusion, Consumer Protection, Economic Growth, Efficiencies

Driving Elements

1. Key Principles

2. Country-Specific Design Options

2. IMPLEMENTATION

 User-centered design  Cybersecurity  Flexibility

 Degree of anonymity  Identity management  Availability

 Process, roles, responsibilities  Project management  Cybersecurity

Implementation Considerations

 Interest and fees  Programmability

Central Bank Legal Framework (incl. Legal tender designation)

Governance, Organization, Risk Management (incl. cyber risks) Regulation and Supervision (incl. third-party service and wallet providers) Infrastructure (incl. IT backbone, electricity, internet coverage)

Foundational Elements

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INTERNATIONAL MONETARY FUND

Questions?

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INTERNATIONAL MONETARY FUND

30 th Annual Conference with Commercial Banks

7 November 2019

Banking & Finance in a Period of Climate Change

Stephen Lander Presented by :

CONFIDENTIAL | View > Header & Footer for info

View > Header & Footer for date

State of Play

‘We need banking but we don’t need banks anymore’ – Bill Gates, 1997

2

State of Play

Technology-enabled Utility through Iterative Design

Innovation

Integration

Adaptation

3

State of Play

Inflection Point:

• New Rules & Regulatory Requirements

Financial Crisis 2007/08

• Innovation in other industries

4

State of Play

Iphone

Air BnB

June 2007

Uber

August 2008

March 2009

5

Climate Change

Innovative use of technology in design and delivery of financial services

FinTech

Block Chain

P2P Lending

Crowd Funding

Big Data

AI

6

Climate Change

Yu’E Bao’s automated savings platform

7

Climate Change

First Principles Design

Netflix

8

Climate Change

Utility

Back-end processing

Relevance

Iterative Design

Loss of consumer- facing market

First Principles Design

9

Climate Change

End: Thank You

10

Banking and Finance in a Period of Climate Change Climate Finance Advisors

Presentation prepared for the Eastern Caribbean Central Bank Inaugural Conference with Financial Institutions November 7, 2019

Climate Finance Advisors, BLLC

Boutique climate finance firm with practitioner expertise in the following:

Develop Climate Investment Strategies

Appraise & Structure Climate Smart Investments

Mobilize, Catalyze, Leverage Public & Private Capital

Incorporate Climate Risk into Financial Products, Services, & Operations

2

CLIMATE FINANCE ADVISORS, BLLC

ECONOMIC IMPACTS OF CLIMATE CHANGE

2°C

1.5°C

Global damages up to US$69 trillion by 2100

• For every 1°C of warming, GDP growth falls by 1.2% • 15%–25% reductions in per capita output by 2100 for warming above 2°C

Sources: IPCC 2014, Moody’s Analytics, 2019; Burke, Marshall, et al, Nature, 2018

3

CLIMATE FINANCE ADVISORS, BLLC

CLIMATE VS. ENVIRONMENTAL RISK

Climate Risk

E&S Risk

Although there are linkages, the concept of "climate risk" is distinct from environment, social and governance (ESG) risk, insofar as: • ESG risk approaches tend to analyze the project’s impact on the environment , communities • Climate risk approaches should analyze the environment/climate impacts on the project ’s viability. Many institutions continue to see climate change as an ESG issue, which fundamentally mischaracterizes the nature of the risks it poses. Climate risk is contextual, location specific, and dependent on the time horizon considered.

Temperature Patterns

Emissions

Droughts

Water Transportation

Polution

Precipitation

envioronment

Construction

Sea level rise of Financial Activity

Impact to Operation

Impact of the Project on the

Damage to habitats

Extreme Weather

Climate Risk is a Credit Risk

CLIMATE RISK PUTS GREATER PRESSURE ON ECONOMIC AND SOCIAL STABILITY

We have locked in enough warming that impacts from climate change are being realized.

Warming = Climate Impacts (Acute and Chronic) = Financial Impacts

• Greater pressure on governments • Greater pressure on public finance/public budgets • Capital flight (human, economic, financial).

Economic, Financial Implications Security & Migration

Vulnerable Communities

Social Stability

By increasing climate risk awareness and risk management will reduces community vulnerability to climate change.

Account for and manage climate risks to ensure economic and social stability

Increased opportunities to address and invest in resilience

5

CLIMATE FINANCE ADVISORS, BLLC

WHAT IS CLIMATE RISK IN THE FINANCIAL SYSTEM?

6

CLIMATE FINANCE ADVISORS, LLC

SPECIFIC: CLIMATE RISK MANIFESTING ACROSS INDUSTRY

Ag, Forestry, Fishing Mining Construction Manufacturing Retail Financial Services Industries

7 CLIMATE FINANCE ADVISORS, LLC Source: Cicero, Shades of Climate Risk, 2018

PROPAGATION CHANNELS OF CLIMATE RISKS TO THE REAL ECONOMY AND THE FINANCIAL SECTOR

Source: Climate Finance Advisors adapted from CICERO (2017), “Shades of Climate Risk”

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CLIMATE FINANCE ADVISORS, BLLC

BREAKING DOWN CLIMATE RISKS

Impacts Value at Risk (VAR)

Interested Parties Financial Institutions Investors Public balance sheet Public Capital

Definitions Hazard: an event or condition that has the potential to cause harm

Data Analytics Ongoing Analysis

Vulnerability: conditions that increase susceptibility, damages or impact of hazards Exposure: the total stock of assets potentially impacted by hazards (e.g. project specific, corporate wide, supply chain, regional disruption, economy-wide)

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CLIMATE FINANCE ADVISORS, BLLC

KEY CONCLUSIONS: PROMOTING SYSTEMIC CHANGE TO EMBED CLIMATE RISK AND RESILIENCE INTO POLICY AND ACTION

Addressing Climate Risk key for both Policymakers and Institutions

Beyond Disclosure: Focus on Risk Management

Risk also means Opportunity

Financial Institutions & Insurance (regulated, unregulated, securities)

Financial System Governance (policy and regulation)

Developing approaches to manage climate risks across the economy, financial system is in the interest of public policy and financial institutions alike

Requires consistent metrics, methodologies and scenarios

Addressing climate risk in financial decision making and policy will support greater returns, sustainability

Quantifying climate risk key for risk management and investment decision making

Clear financial policy, regulation, standards, metrics and incentives can help ensure consistent approaches

Adaptation and resilience investments, products and services will generate trillions of dollars in new investments

Managing climate risk multifaceted, includes risk transfer products (e.g. insurance)

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CLIMATE FINANCE ADVISORS, LLC

EXAMPLES OF CLIMATE RELATED FINANCIAL POLICY AND REGULATIONS IN PLACE*

Fiscal and Monetary Policy

Standards and Metrics

Disclosure and Reporting

Prudential

• Securities disclosure guidelines • ESG reporting (particularly emissions, “footprinting”) • Energy usage/ benchmarking requirements (e.g. building EE benchmarking)

• Bank stress testing • Insurance stress testing • Capital adequacy/ provisioning easement linked with climate relevant investment

• Taxonomies for climate investments (definitions, standards) • Green Bond Standards • Linkages to industry

• Carbon Tax, Pricing • Clean energy incentives, tax credits • Green credit allocation/loans • Green bond incentives • Green funds, banks

standards (e.g. green buildings)

Risk Assessment/Management

Information and Market Supporting Mechanisms

Economic Stimulation

*Examples include policies and regulations which have been enacted, but variabilities exist based on country context (e.g. some are connected to larger sustainability objectives, where climate is one component).

11

CLIMATE FINANCE ADVISORS, BLLC

HOW WE INVEST MATTERS

• Financial Institutions play a pivotal role in scaling up and directing finance. • Costs of climate risk may undermine performance of all assets/investments. • Adaptation and “Resilient” Investments/Investment in Resilience needed now more than ever.

Two Simultaneous Actions Needed

Seeking Out and Scaling Up Low Carbon, Climate Resilient Investment (LCR)

Addressing and Reducing Risks Posed by Climate Change

Climate Risk

LCR Investment

• Climate risk is a credit risk • Pr ice-in mal -adaptat ion • Incent ivize Resi l ience

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CLIMATE FINANCE ADVISORS, BLLC

Thank You

Stacy Swann, CEO – Climate Finance Advisors Email: sswann@climate-fa.com

Twitter: StacySwann Skype: StacySwann

Climate Finance Advisors, BLLC