strategic intelligence for business-to-business professionals Key findings from THE 2019 U.S. B2B EC.
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THE SILVER INSTITUTE 1400 I Street, NW, Suite 550 Washington, D.C. 20005 Tel: +1-202-835-0185 Email:.
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JOINT REPORT ON MULTILATERAL DEVELOPMENT BANKS 2019 C L I M AT E F I N A N C E AUGUST 2020 This report was written by a group of multilateral development banks (MDBs), composed of the African Development Bank (AfDB), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDBG), the Islamic Development Bank (IsDB) and the World Bank Group (WBG). The findings, interpretations and conclusions expressed in this work do not necessarily reflect the official views of the MDBs Boards of Executive Directors or the governments they represent. JOINT REPORT ON MULTILATERAL DEVELOPMENT BANKS 2019 C L I M A T E F I N A N C E CONTENTS 2 Abbreviations and acronyms 3 Preface 5 Executive summary 9 1. OVERVIEW OF MDB METHODOLOGIES FOR TRACKING CLIMATE FINANCE 9 1.1. Finance for adaptation to climate change 9 1.2. Finance for the mitigation of climate change 11 2. MDB CLIMATE FINANCE, 2019 11 2.1. Total MDB climate finance 13 2.2. MDB climate finance by type of recipient or borrower 14 2.3. MDB climate finance by type of instrument 15 2.4. MDB climate finance by region 16 3. MDB ADAPTATION FINANCE, 2019 20 4. MDB MITIGATION FINANCE, 2019 24 5. CLIMATE CO-FINANCE, 2019 27 ANNEX A. Definitions and clarifications 29 ANNEX B. Joint methodology for tracking climate change adaptation finance 34 ANNEX C. Joint methodology for tracking climate change mitigation finance 41 ANNEX D. Finance that benefits both adaptation and mitigation 44 ANNEX E. Types of instrument 48 ANNEX F. Geographical coverage of the report ADB Asian Development Bank AfDB African Development Bank AIIB Asian Infrastructure Investment Bank CCF climate co-finance CIF Climate Investment Funds CO2 carbon dioxide EBRD European Bank for Reconstruction and Development EIB European Investment Bank EU European Union euro FY fiscal year GEF Global Environment Facility GCF Green Climate Fund GHG greenhouse gas IDB Inter-American Development Bank IDBG Inter-American Development Bank Group, composed of the IDB, IDB Lab and IDB Invest IDB Invest IDBG private sector arm IDB Lab the innovation laboratory of the IDBG IDFC International Development Finance Club IFC International Finance Corporation IsDB Islamic Development Bank MDBs multilateral development banks MIGA Multilateral Investment Guarantee Agency NAMAs Nationally Appropriate Mitigation Actions NDCs Nationally Determined Contributions UNFCCC United Nations Framework Convention on Climate Change US$ United States dollar WB World Bank, composed of the International Bank for Reconstruction and Development, and the International Development Association WBG World Bank Group, composed of the WB, IFC and MIGA ABBREVIATIONS AND ACRONYMS 2019 JOINT REPORT ON MULTILATERAL DEVELOPMENT BANKS CLIMATE FINANCE 2 PREFACE The Joint Report on Multilateral Development Banks Climate Finance is an annual collaborative effort to make public MDB climate finance figures, together with a clear explanation of the methodologies for tracking this finance. This joint report, alongside the MDBs publication of climate finance statistics in their respective corporate media, is intended to track progress in relation to climate finance targets such as those announced around COP21 and the greater ambition pledged last year. In September 2019, at the UN Secretary Generals Climate Action Summit in New York, the MDBs announced their climate action targets for 2025: a collective commitment of climate finance of at least US$ 65 billion, with US$ 50 billion for low-income and middle-income countries; an increase in adaptation finance to US$ 18 billion; and co-financing of US$ 110 billion, including private direct mobilisation of US$ 40 billion. Since the first Joint Report, which covered climate finance for 2011, figures reported for climate finance have been based on a jointly developed MDB tracking methodology, which has been gradually updated and detailed. From the 2014 report onwards, the methodology has included reporting on climate co- finance alongside MDB climate finance. The first eight editions of the report provided climate finance data on a group of emerging and developing economies as defined by the MDBs, with slight fluctuations in geographical coverage year by year. Starting with the 2019 report, for purposes of greater transparency and consistency with coverage of operations, MDBs agreed to start reporting on all economies where the MDBs operate, in other words to provide data on MDB climate finance commitments beyond those directed solely at developing and emerging economies. This change to reporting on all economies where the MDBs operate is made so that MDB climate finance data is more comprehensive and also includes a further breakdown by economy income level. In 2015, the MDBs and the International Development Finance Club (IDFC) agreed on a set of Common Principles for finance to mitigate climate change and an initial set of Common Principles for finance to support adaptation to climate change. Their intention was to take a common approach to tracking and, in future, to reporting climate finance. These institutions are expected to promote the Common Principles as their starting point and to discuss all differences transparently. The MDBs have continued to address the challenges of tracking and enhance their methodologies, including through the ongoing work of the joint MDB climate finance tracking group. For these purposes, the MDB working group has formalised the coordination of two work streams. The first stream covers climate change mitigation and is coordinated by the European Investment Bank, while the second addresses climate change adaptation and is coordinated by the Inter-American Development Bank. In 2019, the Climate Change Adaptation Working Group continued to harmonise the application of the adaptation finance tracking methodology and the Common Principles, in particular across more complex sectors and in jointly financed projects, and to harmonise the approach to reporting on climate resilience results. In December 2019, MDBs1 and members of the IDFC published the joint Framework and Principles for Climate Resilience Metrics in Financing Operations, setting out the core concepts and characteristics of climate resilience metrics alongside a high-level framework for such metrics in financing operations. The Climate Change Mitigation Working Group plans to finalise review of the tracking methodology for climate mitigation finance during 2020, with the aim of commencing tracking in 2021 using the new methodology. The new version of the methodology will include a more granular breakdown of types of eligible activity, clear criteria that must be met and additional guidance to facilitate the application of these criteria. The MDBs will continue to improve their tracking and reporting of climate finance in the context of their commitments to ensure consistent financial flows to the countries long-term, low-carbon and climate- resilient development pathways, as a contribution to the successful implementation of Article 2.1(c) of the Paris Agreement. At COP25 in December 2019 the MDBs presented an update on their work to align with the Paris Agreement: the key principles and criteria of their approach, as well as some methodological guidance on how to operationalise it. Furthermore, MDBs intend to ensure that they do not report as climate finance any activities not considered to be 1 The AfDB, ADB, AIIB, EBRD, EIB, IDBG and IsDB. 2019 JOINT REPORT ON MULTILATERAL DEVELOPMENT BANKS CLIMATE FINANCE 3 consistent with countries long-term, low-carbon and climate-resilient pathways to meet the goals of the Paris Agreement. As the development of specific methodologies for assessing such consistency is a work in progress, financial flows presented in this report are not necessarily considered to be consistent with the countries long-term, low-carbon and climate- resilient development pathways. The 2019 edition of the Joint Report on Multilateral Development Banks Climate Finance is published in the midst of the Covid-19 pandemic, which has caused significant social and economic disruption, temporarily reducing global carbon emissions to 2006 levels. Countries now confront parallel threats of Covid-19 and climate change, as well as a unique opportunity to build back better by planning investments for more sustainable systems in place of the current carbon-intensive approach. Global commitment is necessary to deploy financial resources such as stimulus and recovery packages to help build inclusive, low-carbon and climate- resilient economies. This 2019 edition was prepared by the European Bank for Reconstruction and Development, together with partners the African Development Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, the European Investment Bank, the Inter-American Development Bank Group, the Islamic Development Bank and the World Bank Group. August 2020 Download this report at: Download the infographic summary at: 2019 JOINT REPORT ON MULTILATERAL DEVELOPMENT BANKS CLIMATE FINANCE 4 EXECUTIVE SUMMARY This ninth edition of the Joint Report on Multilateral Development Banks Climate Finance is an overview of climate finance committed in 2019 by the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDBG), the Islamic Development Bank (IsDB) and the World Bank Group (WBG). Importantly, this is the first year that IsDB data has been included in the total joint MDB climate finance figures. In addition, this years report summarises information on climate finance tracking from the Asian Infrastructure Investment Bank (AIIB), presented separately from the joint figures.2 AIIB climate finance commitments are not yet included in the total MDB climate finance reported in this years edition. The data and statistics presented in this years report result from the uniform application of the methodologies developed jointly by the MDBs for their annual commitments. In this report, the term “MDB climate finance” refers to the financial resources (from own accounts and MDB-managed external resources) committed by MDBs to development operations and components thereof which enable activities that mitigate climate change and support adaptation to climate change. The term “climate co-finance” refers to the volume of financial resources invested by other public and private external parties alongside MDBs for climate mitigation and adaptation activities. The MDBs have reported jointly on climate finance since the first edition in 2012, which reported figures for 2011, and have added joint reporting on climate co-finance since the 2015 edition. In this Joint Report for 2019, the geographical coverage has been expanded to report on all economies in which the MDBs operate (including those that are not developing and emerging economies), to make more transparent and consistent the reporting of MDBs progress towards their joint climate finance commitments for 2025. Collectively, the MDBs committed US$ 61,562 million in climate finance in 2019 US$ 46,625 million or 76 per cent of this total for climate change mitigation finance and US$ 14,937 million or 24 per cent for climate change adaptation finance. The net total climate co-finance committed during 2019 alongside MDB resources was US$ 102,683 million. Together, MDB climate finance and climate co-finance totalled US$ 164,245 million. Based on the expanded geographical coverage in this 2019 edition of the Joint Report, the MDB climate finance commitments are presented separately in two main groups: 1) Low-income and middle-income economies, a grouping that includes upper-middle, lower-middle and low-income economies, and 2) High-income economies, a category that also includes climate finance for global, multi-regional projects (a total of US$ 185 million) when it is not possible to attribute these to a specific income group. In 2019, US$ 41,467 million or 67 per cent of total MDB commitments was for low-income and middle-income economies and US$ 20,095 million or 33 per cent for high-income economies. The economies are categorised by income grouping in accordance with the World Banks classification dated June 2019 (see Table A.F.1). Figure 1 presents MDB climate finance commitments reported for 2015-18 for emerging and developing economies and for 2019 for all economies in which the MDBs operate. Figure 2 shows a more detailed breakdown of total MDB climate finance commitments in 2019 by MDB and by income group. Figure 3 outlines MDB climate finance commitments by income grouping, with the inclusion of total MDB climate finance for high-income economies that was not reported in the 2015-18 editions of the Joint Report on MDBs Climate Finance. 2 See page 8 for data on AIIB climate finance commitments. 2019 JOINT REPORT ON MULTILATERAL DEVELOPMENT BANKS CLIMATE FINANCE 5 WBG IsDB IDBG EIB EBRD ADB AfDB US$ billion 2015 2015-18: Climate fi nance in emerging and developing economies 2019: Climate fi nance in all economies where the MDBs operate 201720182019 Low- and middle- income economies 2019 Total 2016 30.0 40.0 60.0 20.0 50.0 0 10.0 10.7 1.7 5.1 3.2 2.9 1.4 25.1 11.5 2.7 4.3 3.5 4.4 1.1 27.413.2 4.3 5.5 4.6 5.2 2.3 35.2 21.3 5.0 5.7 3.8 4.0 3.3 43.1 18.4 0.5 4.4 3.6 3.9 7.1 3.6 41.5 18.8 0.5 5.0 21.7 5.0 7.1 3.6 61.6 Figure 1. MDBs climate fi nance commitments 2015-19 (in US$ billion) Low-income and middle-income economiesHigh-income economies AfDBADBEBRDEIBIDBGIsDBWBGTotal 100% 80% 60% 40% 20% 0% 3,600 3,600 7,068 52 7,073 3,923 1,079 5,002 18,100 3,558 21,658 540 4,417 4,958 464 466 18,437 369 18,806 41,467 20,095 61,562 Figure 2. Total MDB climate fi nance commitments for all economies where the MDBs operate, 2019 (in US$ million) Notes for Figures 1 and 2: 1. Total 2019 climate finance in Figure 1 includes low-income and middle-income and high-income economies. Where possible, climate finance for regional projects has been split into two groups: low- and middle-income; and high-income. Climate finance that is global or cannot be attributed to a specific income group is reported under the high-income category. 2. IsDB reported commitment excludes operations of IsDB Group members including the Islamic Corporation for the Development of the Private Sector (ICD), the International Islamic Trade Finance Corporation (ITFC) and the Islamic Corporation for Insurance of Investment and Export Credit (ICIEC). 3. In the 2011-18 editions of the Joint Report on MDBs Climate Finance, EIB climate finance figures were restricted to developing and emerging economies in transition and some EU economies (Bulgaria, Croatia, Cyprus, Estonia
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2019年,我们预计政治局势将持续动荡,气候影响将更加明显,生物多样性丧失速度将加快。尽管我们面临的可持续性挑战的规模和复杂性令人望而生畏,但也有理由保持乐观。我们目睹了城市、地区和企业推动的前所未有的领导和创新,Z一代不断增强的公民活动和倡导,以及对塑料污染等问题的认识迅速提高。我们预计,这一增长势头将推动2019年在关键社会和环境问题上取得亟需的进展。我们还首次分享了对五个行业的深入分析:食品和农业、科技、制药和医疗保健、能源和公用事业以及金融服务。在我们的行业趋势中,我们探讨了这些快速变化的行业面临的关键问题,并讨论了新兴的解决方案。我们希望您喜欢这份报告,并一如既往地欢迎您的反馈。防止全球变暖超过2摄氏度的机会正在减少,这突出表明迫切需要更快地部署低碳和气候适应解决方案。目前的努力仍然不足以改变我们走向危险的气候变化的道路。全球排放量不断上升、气候迅速变暖以及未能充分减少温室气体排放,突显出迫切需要更加注重恢复措施。为了防止全球变暖达到潜在的灾难性水平,需要对有效的解决方案进行快速、大规模的投资。专家报告称,2018年全球温室气体排放量预计增长2.7%,创历史新高。这是继经济增长放缓导致排放量短暂相对稳定之后,第二年出现显著增长。国际媒体继续关注发电的排放问题,因为发电正在取得最大的进展。但农业和交通运输业也是主要贡献者,对这些部门和其他较小排放者的关注有限。最新的IPCC报告强调了我们已经经历的1摄氏度变暖的严重影响,并指出2摄氏度的变暖现在被认为是非常危险的。根据2018年12月在波兰举行的第24届缔约国会议(COP24)上商定的新的巴黎协定手册,各国同意自2024年起每两年报告一次排放量。中国继续大力投资可再生能源、电动汽车和储能,但预计其总排放量将持续攀升,直至2030年。印度的排放量预计将在2033年达到峰值。与化石燃料消费有关的空气污染仍然是一个主要的全球问题。
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Driving Finance Today for the Climate Resilient Society of Tomorrow for the Global Commission on Adaptation About This report was prepared by Climate Finance Advisors for the United Nations Environment Programme Finance Initiative (UNEP FI) and the Global Commission on Adaptation (GCA) as a contribution to a series of technical background papers on finance for adaptation and resilience supporting the GCAs inaugural flagship report scheduled for September 2019. UNEP FI Global Commission on Adaptation Climate Finance Advisors United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between United Nations Environment and the global financial sector created in the wake of the 1992 Earth Summit with a mission to promote sustainable finance. More than 200 financial institutions, including banks, insurers, and investors, work with UN Environment to understand todays environmental, social and governance challenges, why they matter to finance, and how to actively participate in addressing them. The Global Commission on Adaptation was launched in The Hague on 16th October 2018 by 8th UN Secretary General Ban Ki-moon. The Commission launched with the mandate to encourage the develop- ment of measures to manage the effects of climate change through technology, planning and investment. Secretary General Ban Ki-moon leads the group with co-chair of the Bill insurance companies and other providers of financial “risk transfer” mechanisms; rating agencies and other neutral arbiters of credit risk assessment for investors. Financial system constituents The paper uses this term to broadly encompass financial governance bodies, financial institutions, and diverse addi- tional influential actors, such as rating bodies. Financial system governance bodies The paper uses this term to represent a collection of enti- ties that help to govern and guide the financial system and are responsible for the safety and soundness of financial markets and the economy at large. These include entities that promote and enforce regulations, but also entities that create standards and guidelines for the financial sector, and importantly those that play a key role in developing incen- tives that can promote, accelerate, and catalyze investment faster than the markets might otherwise act. Hazards The potential occurrence of a natural or human-induced physical event or trend or physical impact that may cause loss of life, injury, or other health impacts, as well as damage and loss to property, infrastructure, livelihoods, service provi- sion, ecosystems, and environmental resources.4 Hazards related to physical climate risk include events that are linked to gradual global warming and extreme weather events, such as intense storms, flooding (coastal and river), water scarcity, heat and temperature stress, drought, and wildfires, among others. Investment in resilience An investment whose primary objective or function is to increase resilience to protect against or create greater capacity to recover from the direct and indirect physical impacts of climate change.5 Liability Financial liabilities, including insurance claims and legal damages, arising under the law of contract, tort, or negli- gence because of other climate-related risks. Driving Finance Today for the Climate Resilient Society of Tomorrow Commonly used terminology in this paper 5 Physical risk Physical risks can be defined as “those risks that arise from the interaction of climate-related hazards (including hazard- ous events and trends) with the vulnerability of exposure of human and natural systems, including their ability to adapt” (Batten et al., 2016). Two main sources of physical risks can be identified: gradual global warming and an increase in extreme weather events.6 Physical risks resulting from climate change can be event-driven (acute) or longer-term shifts (chronic) in climate patterns. Physical risks may have financial implications for organizations, such as direct damage to assets and indirect impacts from supply chain disruption. Organizations financial performance may also be affected by changes in water availability, sourcing, and quality; food security; and extreme temperature changes affecting organizations property, operations, supply chains, transport needs, and employee safety.7 Acute physical risk Those that are event-driven, including increased severity of extreme weather events, such as cyclones, hurricanes, or floods.8 Chronic physical risk Longer-term shifts in climate patterns, such as changes in precipitation patterns and sustained higher temperatures, that may cause sea-level rise or chronic heat waves.9 Resilient investment An investment that is protected against or can recover from the impacts of climate change.10 Transition risk Transitioning to a lower-carbon economy may entail extensive policy, legal, technology, and market changes to address mitigation and adaptation requirements related to climate change. Depending on the nature, speed, and focus of these changes, transition risks may pose varying levels of financial and reputational risk to organizations.11 Value at risk Quantifies the size of loss on a portfolio of assets over a given time horizon, at a given probability. Estimates of VaR from climate change can be seen as a measure of the potential for asset-price corrections due to climate change. Vulnerability The propensity or predisposition to be adversely affected. Vulnerability encompasses a variety of concepts and elements, including sensitivity or susceptibility to harm and lack of capacity to cope and adapt. Driving Finance Today for the Climate Resilient Society of Tomorrow Foreword 6 Foreword Financial institutions are taking an increasing number of mitigation actions to prepare for a low-carbon future. These actions range from divesting from or engaging with firms that are highly dependent on the use of fossil fuel, to accelerating investment in green technol- ogies, where, for example, solar build-out represented 38% of all new generating capacity added in 2017.12 However, even if we fully deliver on the mitigation objectives of the Paris Climate Agreement, we will end up with between 1.5C and 2C of warming, which is double the warming we see today. Even in that best-case scenario, the physical impacts of climate change will be significant and potentially disruptive. Climate change is already affecting our economy, our society and our environment and these material impacts will continue to increase even if we manage to hit mitigation targets. It is therefore of paramount importance that adaptation to climate change is considered as important as reducing carbon emissions. Yet the gap between the financing required for adaptation and the funds currently available continues to grow. According to the 2018 Adaptation Gap Report, the annual costs of adaptation could range from US$140 billion to US$300 billion by 2030 and from US$280 billion to US$500 billion by 2050. Furthermore, the physical impacts of climate change are likely to have a disproportionate impact on the poorest countries, regions and sectors of society. This is why the Global Commission on Adaptation was convened in 2018 to elevate the political visibility of climate adaptation and to encourage bold solutions such as smarter investments, new technologies and better planning. Financial institutions have a key role to play in unlocking investment for a climate-resilient economy. An evolving landscape of adaptation investment opportunities are emerging, which will allow for both a societal impact and financial returns. For example, specific microfinance and microinsurance products could deliver investments in climate-resilient farms and businesses. Targeted savings products aimed at promoting climate resilience could be made available to vulnerable populations, while transfer and remittance facilities will help to facilitate emergency funding to communities affected by climate change-driven events. Financial service companies are also in a position to raise awareness and build capacity around climate risks. Governments could incentivize investment in adaptation through the use of blended finance instruments or other forms of public-private financing models that facilitate scale and pooling or diversifying of risks. Furthermore, integrating climate resilience into project development makes investments both robust and long term, which is a clear advantage for private investors. Offshore wind farms in tropical regions that are able to survive hurricane or typhoons, for example, or investments in low-cost products to cool buildings, such as roofing materials or paint, would provide clear investment opportunities. Driving Finance Today for the Climate Resilient Society of Tomorrow Foreword 7 Finally, systemic changes, including physical risk disclosure and the integration of climate change assessments in investment decision-making will help to mainstream adaptation and build a more resilient financial sector. This report provides a thorough analysis of the current situation, identifying the barriers that restrict the financial systems resilience and limit financial flows to adaptation-related investments, while underlining the potential opportunities that we highlight above. We are pleased to endorse this reports concrete and ambitious recommendations, which, if fully implemented, would make a real difference in unlocking financial flows for adaptation. We sincerely hope that the partnership between UNEP FI and the Global Commission on Adaptation will continue to develop over the coming years and help to deliver the actions and initiatives necessary to build a more resilient financial sector. Peter Damgaard Jensen CEO, PKA Ltd Commissioner, Global Commission on Adaptation Chair, the Institutional Investors Group on Climate Change Eric Usher Head, UNEP Finance Initiative Driving Finance Today for the Climate Resilient Society of Tomorrow Executive summary 8 Executive summary There is no doubt that the world is warming, and the consequences of this warming are and will increasingly be far-reaching. Addressing the adaptation needs that result from this warming and aligning those with the 2015 Paris Agreement is perhaps the biggest invest- ment opportunity of this generation. In doing so it will be imperative to align the financial system to this challenge in order to truly “unlock” the necessary capitalboth private and publicthat can support investment in adaptation and resilience. But efforts to date fail to reflect the urgency communicated in recent reports by the Intergovernmental Panel on Climate Change (IPCC) and other scientific bodies. With increas- ing evidence that climate impacts are already occurring and accelerating, further delay presents enormous, potentially catastrophic risks to the financial systemand, indeed, the global economy. The financial sector is built around evaluating and managing risks of all kinds as the basis of making investment decisions. To date few in the financial sector are incorporating physical climate risks into investment decision making. Knowledge of how physical risks from climate change impacts risks and opportunities is rapidly evolving, but clear risk management practices are still nascent. Identifying the financial implications of climate risks will create enormous opportunities for profitable investment by all types of investors, including both public and private finance. However, the same understanding may also trigger potential capi- tal shifts or flight from the poorest and most vulnerable communities and countries, those most in need of investment in adaptation and resilience. The absence of clear ownership of climate risk in many sectors has also led to expectations of publicly funded assistance following natural disasters, further discouraging investment in resilience. This paper reviews barriers and opportunities for financing resilience and adaptation by all actors across the financial system but chiefly targets financial system constituents, including policymakers and financial actors, and the actions required of each.13 While the challenges and potential solutions are wide ranging, key needs fall into several categories: Climate risk management and climate risk disclosure; Harmonization of practices and terminology; and (re) Allocation of capital towards climate resilience, adaptation and overall sustainability. Many efforts to bring about the changes in the financial system that are needed to integrate climate risks in decision making have been initiated, but the reality today is that the neces- sary rules, regulations, standards, and best practices remain nascent and weakly defined. While specific to different segments and actors within the financial system, five broad categories of barriers to scaling up financing for adaptation and resilience summarize the challenge: Inadequate support and/or incentives to act; Weak policies and conventions in the financial industry; Market barriers; Operational gaps at the institution level; and Low technical capacity for climate risk management. The range of adaptation investment opportunities, while very large, faces additional barriers in the perceived lack of private benefits and the immaturity of business models. Driving Finance Today for the Climate Resilient Society of Tomorrow Executive summary 9 Aggressive additional public and private commitments will be needed to address the growing adaptation financing gap. Closing the gap will require comprehensive policy reforms, enhanced incentives, and partnerships involving governments and policy makers, financial institutions, businesses of all forms, and communities at risk. This paper was developed as part of a collection of background papers on the topic of finance to contribute to the Global Commission on Adaptations “Action Tracks” to be presented in September 2019. This paper focuses specifically on two key constituents important for transforming financing flows towards adaptation and resilience: i. Financial System Governance Bodies; and ii. Financial Actors. This paper presents six recommendations, supplemented by illus- trative actions, which can facilitate and accelerate financing for adaptation and resil- ience. Collectively, they offer a program that is ambitious, actionable, and can directly impact how finance can be unlocked for adaptation and resilience: Accelerate and promote climate-relevant financial policies; Develop, adopt, and employ climate risk management practices; Develop and adopt adaptation metrics and standards; Build capacity among all financial actors; Highlight and promote investment opportunities; and Use public institutions to accelerate adaptation investment. Each of these are efforts which can be undertaken in parallel by both policy makers and financial institutions, and if implemented will result in the acceleration of financing flows and investment for adapt
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Color gradient or Image placeholder October 2019 Research Institute Global wealth report 2019 Though.
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Reuters Institute Digital News Report 2019 Nic Newman with Richard Fletcher, Antonis Kalogeropoulos,.
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TV SD Functional safety for a digital world Smart solutions from chip design to whole system design White paper Abstract As digitalisation and automation progress, electrical, electronic or programmable electronic systems (E/E/PES) are used increasingly in the field of safety applications. Growing complexity and connectivity bring new requirements for the functional safety of systems and power plant technology, with previously separate applications growing closer together. Given this, interdisciplinary expertise is increasingly important to ensure safety and dependability of systems. As a result, new applications of functional safety are emerging, such as collaborative robots which work hand in hand with humans. These trends are also reflected at standardisation level. Current standards provide starting-points for implementing the new demands when realising safety requirements. This TV SD white paper summarises the current trends and challenges and also provides an overview of the opportunities offered by functional safety. Third-party audits and testing throughout the design and development phases play a critical role across all applications. This topic will be of interest to the manufacturers of systems, components and machines and the owners or managers of industrial plants and infrastructure. 2Functional safety for a digital world | TV SD Contents 1 INTRODUCTION 3 2 TRENDS AND CHALLENGES IN FUNCTIONAL SAFETY 4 Modern semiconductors with safety features4 Stricter requirements an opportunity for the medical-device industry5 Machine industry: A paradigm shift in protection strategy6 Lifting devices for highest demands in nuclear engineering 7 Revised standards for combustion systems8 Safety instrumented systems in the process industry9 Continuously improved signalling systems for the rail industry 10 Industrial IT security in plant engineering 11 Functional safety as a management responsibility12 3 CONCLUSION13 3TV SD | Functional safety for a digital world 1. Introduction The tradition of functional safety dates back to the 1970s, when an uncontrolled reaction from over- heating caused a major dioxin leak at the Seveso chemical plant in the north of Italy. This event led to stricter industrial safety regulations that formed the basis for international standards. Functional safety has become a critically important issue across all areas of industry, from transportation, healthcare and medical devices to the design of power plants or amusement parks and rides. As a result, manufacturers and operators place top priority on the quality and safety of products and plants in order to protect people, property and the environment against technology-related risk. As new applications develop and become increasingly interconnected, the landscape of standardisation is changing. An excellent example of this is the field of collaborative robotics, in which man and machine work hand in hand. This innovative field requires a holistic approach to functional safety, emphasising the need for expertise and years of experience in both application- specific and generic systems. Other projects require expertise in various application fields across all project phases, from design and development to manufacturing and installation, testing, certification, placing into service and decommissioning. Given this, testing and certification organisations need to provide holistic and international services that enable them to offer owners, managers and manufacturers one-stop multi-disciplinary support and comprehensive assistance with international approval services. 4Functional safety for a digital world | TV SD 2. Trends and challenges in functional safety Modern semiconductors with safety features The main requirement for complex semiconductors to be used in functionally safe embedded systems is a high degree of miniaturisation with the goal of reducing area and cost. Furthermore, modern design requires compatibility, reusability and embedded safety features. This leads to Cs, FPGAs and ASICs with safety mechanisms already implemented on-chip like lockstep architectures or memory integrity measures. The challenges in this domain are short innovation cycles, high degree of design complexity and increasing integration density. These aspects have a massive impact on the assessment of functional safety of such devices. For example, new fault models caused by new technologies have to be regarded. Especially for Systems-on-Chip (SoC), dependent faults have to be evaluated. Already known failure modes like transient failures take on increased relevance in the context of integration of smaller structures. In addition, adequate verification approaches showing the effectiveness of safety measures have to be developed. Due to the massively increasing complexity, a high quality development and lifecycle process is required to ensure a low level of systematic faults. Finally, great care has to be taken when generating the user documentation with respect to completeness of system integration. Therefore, the generic normative requirements have to be interpreted and extended based on the current state of the art and the specific technology. The assessment of design and manufacturing processes is another key factor in avoiding the consequences of systematic faults. In addition to the above, the users of semiconductor components need informative and complete documentation to realise safe and straightforward system design. All these demands require comprehensive expertise. “Challenges in the field of semi- conductors are short innovation cycles and increasing integration density. Ensuring that standards reflect the state of the art is one of these challenges.” Matthias Ramold Global Head Functional Safety TV SD Rail 5TV SD | Functional safety for a digital world Stricter requirements an opportunity for the medical-device industry mind. This concerns the function of a medical device or the software that controls the medical device respectively. For high-risk devices, the regulations and standards require specific safety systems that keep the probability of a fault or the severity of its consequences to a minimum. These systems are protected against faults with the help of functional safety methods. Medical engineering also increasingly relies on systems controlled and monitored by microprocessors and software. Digitalisation and connectivity not only raise the significance of functional safety; they also offer economic opportunities. Safe product design, early avoidance of conformity-related problems, fewer product recalls and shorter time to market are only some of the examples of the potential offered. “Functional safety benefits not only patients and users. Manufacturers also avoid conformity-related problems and benefit from shorter time to market.“ Dr Royth von Hahn TV SD Product Service Medical devices are among the most heavily regulated products in the world. Faults can have serious consequences for patients and users. In contrast to most other safety- relevant sectors of industry, there is no explicit definition of functional safety for medical devices. Nevertheless, regulations and standards lay down a number of requirements that can only be fulfilled by applying the principles and methods of functional safety. These can be found in the relevant standards on electrical safety and software, including IEC 60601-1 “Medical electrical equipment Part 1: General requirements for basic safety and essential performance” and application- specific particular standards and software standard IEC 62304 “Medical device software Software life cycle processes”. The standards require hazards to be assessed with patients and users in 6Functional safety for a digital world | TV SD Machine industry: A paradigm shift in protection strategy In the machine industry, the significance of functional safety has increased continuously. In this sector, the focus of interest has always been the safety of operating and maintenance staff. The other goal has been to minimise the costs of operation and servicing or maintenance. Consequently, machine manufacturing and operation are subject to a host of regulations and requirements. Machinery manufacturers must show compliance with the European Machinery Directive 2006/42/EC. The harmonised standards EN ISO 13849, Parts 1 and 2 and EN 62061 can be used to reach this compliance in the field of functional safety. In recent years, the requirements imposed on machines and machine systems have grown more comprehensive and complex, a trend that is again the result of advancing digitalisation and the increased use of electrical, electronic or programmable electronic systems (E/E/PES). These technologies have contributed significantly to more efficiency and a higher degree of automation also in terms of improved operability and profitability. The safety systems must be aligned to these more versatile and more complex applications. In the past, dangerous movements of machines for example were reliably stopped on opening of one of the monitored access doors in the safety fence. The paradigm shift away from prevention of access and the reliable shutdown of machines to the reliable identification of people and continued operation is underway. Due to this trend both possible damage events and the safety-related parts of control systems have become more complex. One example is the collaboration of man and machine, which offers enormous potential for improving efficiency. “Mechanical engineering is undergoing a paradigm shift: Where machines used to be operated behind safety fences in the past, collaboration is now possible.“ Christian Eberle TV SD Industrie Service 7TV SD | Functional safety for a digital world Lifting devices for highest demands in nuclear engineering The demands that functional safety makes on lifting and material-handling equipment depends on various factors including their specific use. In conventional sectors of industry, safety-related requirements follow from the EU Machinery Directive 2006/42/EC. These requirements are complemented by the standards of the German Institutions for Statutory Accident Insurance and Prevention, in particular DGUV standard 52 Cranes (previously BGV D 6). Lifting equipment used for safety- relevant material handling in nuclear power stations are based on nuclear safety standards, such as KTA 3902 “Design of lifting equipment in nuclear power plants”. In principle, the requirements of this standard build on conventional standards, in particular ISO 13849. KTA standard 3902 includes requirements that go beyond the provisions of this conventional standard, including a list of all necessary safety functions of a lifting device and the required performance level (PL) according to ISO 13849-1. In this context, the PLs established for the individual safety functions depend on the risk involved and the potential extent of radioactive release in case of an assumed functional failure. ISO 13849 thus defines the basically applicable requirements to be used in nuclear engineering for actions taken to identify and control random faults. However, the actions to prevent systematic errors or common cause failure required in ISO 13849 only refer to quality assurance and aim at preventing certain faults in design and development and manufacturing. They do not in all cases satisfy the deterministic design principles of nuclear engineering. There, individual safety functions may have higher safety-related significance, as their failure may result in violation of nuclear safety targets. According to KTA 3902, these functions require two redundant and dissimilar safety devices to ensure reliable control of systematic faults. In this context, at least one of the two safety devices must comply with PL e (or SIL 3 as applicable). For the second safety device, PL c will be sufficient. In practice, this requirement is fulfilled by using two control systems made by different manufacturers. In addition, different principles of measurement are used for determining the conditions of the lifting equipment that are subject to monitoring. “Deterministic design principles in nuclear engineering require dissimilar redundant systems and various principles of measurement.“ Cornelia Bhler TV SD Industrie Service 8Functional safety for a digital world | TV SD Revised standards for combustion systems programmable safety controller. The design of these safety systems requires a systematic approach in order to reach and verify the safety integrity level of this specific application. This requires expertise in functional safety, but also familiarity with process-engineering processes and their behaviour, in particular with respect to existing operating conditions and fault tolerant time. Current standards pursue the approach of evaluating the application-specific design of a safety function under consideration of the strategy used. Examples include EN 746-2 for combustion and fuel-handling systems and its counterpart, the recently published ISO 13577-2 international standard in conjunction with ISO 13577-4. EN 50156-1 on the electrical equipment for furnaces provides for a similar approach, in which safety devices and subsystems must comply to EN 50156-2. This gives plant manufacturers, owners and managers the possibility to design safety functions with hard- wired safety devices and equipment that are approved and qualified according to technical standards. However, they can also choose to use freely programmable safety instrumented systems with sensors and actuators. Within the scope of the framework defined by the relevant specialist standards, these two options allow stakeholders to find the best possible solution for the realisation of safety functions. Industrial combustion systems, such as thermal process plants, are designed and manufactured to match their specific applications. Functional safety systems are used to monitor combustion processes and prevent critical plant conditions. Decades of experience in the realisation of safety functions by means of hard-wired circuits combined with qualified safety devices and equipment is available, ensuring sufficient control of the fault models defined in the relevant technical standards. There has been a rise in the percentage of combustion systems using both sensors and actuators which are approved for SIL- or PL-classified safety functions and circuitry via a freely “There are various ways of implementing functional safety requirements for manufacturers, owners and managers of industrial combustion systems.“ Johannes Steiglechner TV SD Industrie Service 9TV SD | Functional safety for a digital world Safety instrumented systems in the process industry thereby significantly reducing the technical efforts and costs of ensuring safe discharge of vessel contents. In step one of this improvement, the experts define possible damage events an
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