Climate and Nature report 2023 1
Climate and Nature report 2023 CONTENTS
Climate and Nature report 2023 Foreword by the CEO
Climate and Nature report 2023 We are committed to
Net Zero
Climate and Nature report 2023 Governance
Climate and Nature report 2023 Strategy
Climate and Nature report 2023 Risk management
Climate and Nature report 2023 Metrics and targets
Climate and Nature report 2023 Nature
Climate and Nature report 2023 Glossary
HANDELSBANKEN FONDER – GLOSSARY 35 These sector-s
pecific guidelines cover a range of industries, including power, transport, buildings, industry, land use, and more. CONTENTS Foreword by the CEO We are committed to Net Zero Governance Strategy Risk management Metrics and targets Nature Glossary Sustainable Finance Disclosure Regulation (SFDR) The Sustainable Finance Disclosure Regulation (SFDR) is a key EU regulation implemented in March 2021 to improve transparency and prevent greenwashing in sustainable investing. It requires financial market participants in the EU to disclose how they integrate sustainability risks and impacts into their processes and products. The SFDR mandates specific disclosures for different product categories, focusing on climaterelated metrics like emissions and fossil fuel exposure. Working together with the EU Taxonomy and Corporate Sustainability Reporting Directive, the SFDR aims to provide investors with standardized, comparable sustainability information to support the EU’s climate goals. About risk Past performance does not predict future returns. The value of the money invested in the fund can increase or decrease and there is no guarantee that all of your invested capital can be redeemed. Note that a fund with risk level 5-7 as stated in the fund’s key information investment document (KIID) can vary greatly in value due to the fund’s composition and management methodology. A summary of investors’ rights as well as a prospectus, fund rules and KIID are available for each fund at handelsbanken.se/fonder. EU Taxonomy The EU Taxonomy is a classification system that defines environmentally sustainable economic activities, aiming to provide a common language, prevent greenwashing, and direct investments towards sustainable projects. As a key part of the EU’s sustainable finance strategy and climate initiatives like the European Green Deal and Fit for 55 Package, the Taxonomy sets performance thresholds for activities substantially contributing to one of six environmental objectives, including climate change mitigation and adaptation, while avoiding significant harm to the others and complying with minimum social safeguards. It covers revenue, capital expenditures, and operational expenditures, and is designed to evolve over time to reflect technological advancements and changing environmental priorities. Taskforce on Climate-related Financial Disclosures (TCFD) The Taskforce on Climate-related Financial Disclosures (TCFD) was established in 2015 by the Financial Stability Board (FSB) to address the lack of consistent and reliable information on companies’ climate-related risks and opportunities. The TCFD’s primary goal is to develop a reporting framework that enables companies to provide decision-useful information to investors, lenders, and insurance underwriters, allowing them to better assess and price climate-related risks and opportunities. The TCFD framework is structured around four core elements: Governance, Strategy, Risk Management, and Metrics and Targets. These elements are designed to help companies disclose how they identify, assess, and manage climate-related risks and opportunities, as well as the potential financial impacts of these issues on their business. 1. Governance: Companies should disclose their governance around climate-related risks and opportunities, including the board’s oversight and management’s role in assessing and managing these issues. 2. Strategy: Companies should disclose the actual and potential impacts of climate-related risks and opportunities on their business, strategy, and financial planning, considering different climate-related scenarios, including a 2°C or lower scenario. 3. Risk Management: Companies should disclose how they identify, assess, and manage climate-related risks, and how these processes are integrated into their overall risk management framework. 4. Metrics and Targets: Companies should disclose the metrics and targets they use to assess and manage climate-related risks and opportunities, including their greenhouse gas emissions (Scope 1, 2, and, if appropriate, Scope 3) and the related risks. The TCFD recommendations have been incorporated into the ISSB’s proposed standards, IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures). Taskforce on Nature-related Financial Disclosures (TNFD) The Taskforce on Nature-related Financial Disclosures (TNFD) is a global initiative aimed at developing a risk management and disclosure framework for organisations to report and act on nature-related risks and opportunities. Launched in 2021, the TNFD builds upon the success of the Task Force on Climate-related Financial Disclosures (TCFD) and recognizes the growing importance of nature and biodiversity in financial decision-making. The TNFD framework is designed to help organisations identify, assess, and manage their impacts and dependencies on nature, as well as the risks and opportunities associated with nature loss and ecosystem degradation. The framework is structured around four core elements: governance, strategy, risk management, and metrics and targets, mirroring the structure of the TCFD recommendations. International Financial Reporting Standards (IFRS) The International Financial Reporting Standards (IFRS) Foundation, responsible for developing globally accepted accounting standards, established the International Sustainability Standards Board (ISSB) in 2021 to create a comprehensive baseline of sustainability disclosure standards. The ISSB released two proposed standards, IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures), which build upon existing initiatives like the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB). IFRS S2 incorporates the TCFD recommendations, providing a framework for reporting on governance, strategy, risk management, and metrics related to climate risks and opportunities. The adoption of these standards is expected to enhance consistency, comparability, and reliability in sustainability reporting globally, supporting informed decision-making and the transition to a low-carbon economy.