2021 was the year of the net-zero emissions commitment. We saw this at COP 26, where countries, companies, and investors came together to establish plans to decarbonize their economies and focus on nature—and, by extension, on humanity and the path toward sustainable living within planetary boundaries.

To achieve the short-term goals, we must act quickly. Last November, the Glasgow Financial Alliance for Net Zero (GFANZ) committed USD 130 trillion in private capital to reducing greenhouse gas emissions through more than 450 firms in 45 countries over the next three decades. 

The accelerated allocation of private capital to sustainable investments at scale is based on actionable information regarding both risks and environmental impacts, which opens the debate on so-called “double materiality”—the idea that a company’s internal (financial) impact should be given equal weight to its external impacts (environment, economy, and people). Faith Ward, chair of the Institutional Investors Group on Climate Change (IIGCC) and director of Responsible Investments at Brunel Pension Partnership—a firm that manages £35 trillion—is very clear on this: “Incorporating double materiality is essential for responsible investment and climate integration to adapt to the 21st century. Looking at only half the equation seems very outdated.”

To date, Europe has made the boldest commitment to double materiality, which is explicitly included in the Corporate Sustainability Reporting Directive (CSRD) and its underlying European Sustainability Reporting Standards. In Chile, we face a significant challenge and commitment to incorporating ESG criteria, with public investment plans totaling an additional US$4.5 trillion on top of the regular budget from August 2020 through 2022, and sovereign green bonds worth USD 7.6 trillion issued to date—an amount similar to that of green bonds issued by the private sector. 

In Fynsa , we are committed to integrating these criteria through our investment funds: Rockville Solar Energy Fundavoids the emission of 144,000 metric tons of CO2, equivalent to 1.8 million trees over a 10-year period. Fynsa Migrant Fundgenerates positive externalities in terms of the social integration of immigrants seeking access to credit, with a portfolio totaling more than $16 billion as of the end of December. Fynsa Energy Fund reduces CO2 emissions by 78,300 metric tons per year and supplies clean energy to more than 90,000 households. These and other challenges are part of what lies ahead for 2022 in the area of impact investing.

AGF Team