Publication / 29 Mar 2017

Internalization of Environmental Costs for Investment Stress Testing

Trucost and the Industrial and Commercial Bank of China (ICBC) have developed a tool for investors to assess the potential internalized costs and environmental risks of their investments in the aluminum sector.

Green finance in China has grown tremendously over the past few years. Despite receiving policy priority and broad anticipation by the market, green finance still faces several challenges to implementation at scale, including environmental externalities, inadequate funding for long-term investment, information asymmetry and lack of a “green” definition and analytical capacity.

This report continues the collaboration between Trucost and ICBC by focusing on one sector – aluminum – and developing a sensitivity analysis tool for investors to assess the potential internalized costs and environmental risks of their investments in this sector. This assessment framework could help investors incorporate environmental risks into their investment stress testing.

ICBC has pioneered environmental stress testing in China since 2015, which not only facilitates interest and awareness in assessing environmental risks in investment decision making, but also contributes to knowledge building in this field for the banking sector around the world. Building on ICBC’s experience, the Green Finance Committee encourages other financial institutions to look into environmental stress testing, marking a crucial milestone in green finance development in China.

28 January, 2020
Events Uncovering Business Value from Environmental, Social and Governance Factors, Webinar, 28th January 2020

More than ever companies are measuring and disclosing their performance around environmental, social and governance (ESG) issues. By doing this, companies are able to reduce financial risks and uncover business opportunities. Moreover, record amounts of capital are flowing towards companies who do good. In this webinar you will learn: • The current sustainability landscape...

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3 February, 2020
Events Green Finance Summit – Phoenix – 3 – 4, 2020

The GreenFin Summit follows a successful launch event in 2019. That invitation-only event brought together 100 corporate sustainability leaders, major public-sector pension fund executives and leading financial institutions, with over a trillion dollars of combined assets under management. The discussion broached vital topics in ESG that will be expanded upon at the 2020 Summit. Richard Mattison...

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Events Achieving Results: In Corporate Strategy Today & Materiality Assessment Workshop – Arizona – 22nd & 23rd January

The AHC Group “Achieving Results” leadership workshop series is a process of transformational corporate learning, featuring the experiences and innovations of our Senior Associates, clients, and many of our leading global Corporate Affiliate Program member organizations. Brian Werner – Head of Business Development NFC, Americas at Trucost, part of S&P Global will be speaking at this event. For...

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