alternative investment fund
AIFs as defined in point (a) of Article 4(1) of Directive 2011/61/EU;
alternative investment fund manager
an AIFM as defined in point (b) of Article 4(1) of Directive 2011/61/EU;
Best-in-Class
Approach in which a company’s or issuer’s ESG performance is compared with that of its peers based on a sustainability rating. All companies or issuers with a rating above a defined threshold are considered as investable.
Source
- Issuing Entity: Swissbanking
Approach in which a company’s or issuer’s environmental, social and governance (ESG) performance is compared with that of its peers (e.g.in the same sector or category) based on a sustainability rating. All companies or issuers with a rating above a defined threshold are considered investable. The threshold can be set at different levels (e.g. 30% best performing companies or all companies that reach a minimum ESG score).
Source
- Issuing Entity: SFAMA
biodiversity
the variability among living organisms arising from all sources including terrestrial, marine and ot
circular economy
an economic system whereby the value of products, materials and other resources in the economy is ma
climate change adaptation
the process of adjustment to actual and expected climate change and its impacts;
climate change mitigation
the process of holding the increase in the global average temperature to well below 2 °C and pursuin
Climate related-risks
Climate-related risks can drive financial risks such as credit, market, liquidity and insurance risks for financial institutions and pension plans. They can also lead to strategic and operational risks or reputational damage. Mismanagement of these risks can affect a financial institution’s or pension plan’s safety and soundness.
Source
- Issuing Entity: BSIF
Climate-related risks are the financial risks posed by the exposure of institutions to counterparties that may potentially contribute to or be affected by climate change.
Source
Climate sensitivity analysis
An exercise without scenarios, assessing changes in portfolios’ risk attributes by changing some of the inputs in financial models based on shading and classification of exposures into ‘green’ versus ‘non-green’ (which determines an exposure’s vulnerability to climate-related events and policies).
Source
Climate stress test
Assessment featuring fully fledged scenarios that map out possible future development paths of transition variables (e.g. carbon prices), physical variables (e.g. temperature increases) and the related changes in macro variables (e.g. output in different sectors, GDP, unemployment) and financial variables (e.g. interest rates). These scenarios are then translated into changes in portfolio (risk) attributes
Source
Climate-Related Opportunities
Efforts to mitigate and adapt to climate change also produce opportunities for organizations, for example, through resource efficiency and cost savings, the adoption of low-emission energy sources, the development of new products and services, access to new markets, and building resilience along the supply chain.
Source
- Issuing Entity: TCFD
Climate-related risks
No definitions available.
Conditional exclusions
Conditional exclusions of companies based on negative business practices, such as breaches of certain norms, regulations or global ESG standards (often referred to as norms-based exclusions, e.g. systematic violation of human rights).
Source
- Issuing Entity: SFAMA
Credit risks
Damage to collateral for DTI (debt-to-income) loans. GHG-intensive borrowers face higher costs of doing business and/or lower revenue reducing profitability.
Source
- Issuing Entity: BSIF
decarbonisation trajectory
a measurable, science-based and time-bound trajectory towards alignment with the objectives of the Paris Agreement by reducing Scope 1, 2 and 3 carbon emissions as referred to in point (1)(e) of Annex III.
