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Water-related risks are intrinsically linked to both climate and nature challenges and can be closely tied to socio-economic challenges, such as poverty, food security, and domestic and international conflicts. There is increasing evidence that water-related risks are financially material across actors in the financial system, and further still, that there may be important implications for financial stability. However, a review of current practices indicates that these risks are not fully captured by current approaches to assessing risk. This working paper explores how the financial sector understands the concept of financial materiality as a lever for decision making on water-related climate and nature risks. The paper also looks at how regulatory and supervisory guidance considers water in the context of climate and nature risks, and finally how sustainable finance tools and initiatives can support market participants in gaining an improved understanding of water-related risks.

Since the adoption of the Paris Agreement, governments and economic actors have increasingly been setting greenhouse gas emissions reduction or net zero targets. Amidst risks of delayed action and greenwashing, there is need to understand whether climate related targets and transition plans are consistent with the Paris Agreement. Climate change mitigation scenarios can be used as inputs to design such targets and plans, and as benchmarks to assess progress towards them. In this context, this paper proposes criteria for selecting global climate change mitigation scenarios that can be considered consistent with the Paris Agreement temperature goal and emissions objectives, based on state-of-the-art literature on climate science and mitigation scenarios.

Climate change mitigation scenarios are a key forward-looking input for a range of financial sector analyses and assessments. The inaccurate use of mitigation scenarios can, however, contribute to unintended incentives, environmental integrity concerns, and greenwashing risks. This paper aims to inform climate change mitigation scenario providers, financial sector participants and stakeholders, and climate policymakers on how they may contribute to improved use of scenarios for the purposes of target setting and alignment assessments in the financial sector. To do so, the paper analyses climate change mitigation scenarios currently used for these purposes, based on the following analytical dimensions: consistency with the Paris Agreement, practicality, and underlying assumptions.

Carbon lock-in occurs when high-emission infrastructure or assets continue to be used, despite the possibility of substituting them with low-emission alternatives, thereby delaying or preventing the transition to near-zero or zero-emission alternatives. Transition finance, which focuses on the dynamic transformation and decarbonisation of hard-to-abate sectors, frequently faces the issue of carbon lock-in, particularly in considerations of investment feasibility and eligibility. Despite most transition finance approaches incorporating lock-in avoidance as a core principle, existing transition instruments and approaches put in place varying or limited mechanisms to prevent lock-in. Building on the OECD Guidance on Transition Finance, this report takes stock of how carbon lock-in risk is addressed in existing transition finance approaches (such as taxonomies, roadmaps, or guidance), financial instruments, and relevant public and private investment frameworks and methodologies. The report provides good practices on the integration of credible mechanisms to prevent carbon lock-in, address greenwashing risks and build confidence in the market. It can inform both public and private actors in the development of transition finance approaches, standards for green, transition and sustainability-linked debt, frameworks for corporate transition plans, or broader climate-related disclosure frameworks.

The Inclusive Forum on Carbon Mitigation Approaches (IFCMA) is the OECD’s flagship initiative to help optimise the global impact of emissions reduction efforts around the world. This report presents developments since the first meeting of the initiative in February 2023, including the latest updates in terms of country membership and technical work, and outlines next steps.

The frequency and severity of extreme wildfires are on the rise in Portugal, causing unprecedented disruption and increasingly challenging the country’s capacity to contain losses and damages. These challenges are set to keep growing in the context of climate change, highlighting the need to scale up wildfire prevention and climate change adaptation. This paper provides an overview of Portugal’s wildfire policies and practices and assesses the extent to which wildfire management in the country is evolving to adapt to growing wildfire risk under climate change.

The shipping industry is essential for international trade, but it is also an important source of CO2 emissions. To make progress towards climate targets, countries need to monitor CO2 emissions from vessels owned by their ship operator companies. However, most shipping activity takes place outside national borders, making it more difficult to monitor than activity taking place within countries. The OECD’s experimental database on OECD.stat provides a new source of data for CO2 emissions from global shipping, which is available monthly in near real time. This data will help national statistics producers to compile their Air Emission Accounts (AEAs) for the System of Environmental Economic Accounting (SEEA). This Working Paper presents some initial results from the new data source and describes how they were produced. The method is based on granular and timely ship-level data provided by the United Nations Global Platform, and it uses a bottom-up estimation approach to produce results broken down by country and type of ship.

La moitié des terres habitables de la planète étant utilisée pour l’agriculture, la surveillance de la biodiversité des terres agricoles est essentielle pour atteindre les objectifs de la Convention des Nations Unies sur la diversité biologique (CDB). Ce document vise à faire progresser la surveillance de la biodiversité agricole dans les pays de l’OCDE en étudiant les initiatives nationales actuelles et en proposant des lignes directrices pour l’élaboration d’un indicateur fondé sur l’habitat. L’approche proposée fournit un cadre flexible et pragmatique pour harmoniser les rapports des programmes nationaux tout en tenant compte de la diversité des facteurs contextuels d’un pays à l’autre, notamment les systèmes agricoles, le climat, les conditions biophysiques et les pools d’espèces. Afin de faciliter la mise en œuvre de l’indicateur à court terme, il est prévu trois niveaux de notification, qui dépendent de la disponibilité des données, de sorte que tous les pays peuvent participer, qu'ils disposent de ressources limitées en matière de données ou qu'ils soient déjà dotés de programmes de surveillance.

Ces orientations stratégiques résultent du programme de travail pluriannuel du Comité d’aide au développement sur les flux financiers illicites (FFI) dans le négoce de produits pétroliers. Elles visent à proposer, au titre de l’aide publique au développement (APD), un ensemble de mesures utiles, réalistes et applicables pour lutter contre les FFI dans le négoce de produits pétroliers. L’objectif est d’accroître la mobilisation des ressources intérieures au profit des populations qui vivent dans les pays en développement producteurs de pétrole, et de favoriser l’intégrité dans le cadre de la transition énergétique, en particulier pour le commerce de carbone.

This paper quantifies changes in employment and the demand for skills in the European Union following the implementation of Fit for 55 policies. Between 2019 and 2030, the economy is projected to grow by 1.3% in the Fit for 55 scenario (3% in a Baseline scenario without the Fit for 55 policies). Employment growth is projected to be lower in the Fit for 55 than the Baseline scenario. Employment in the Fit for 55 scenario is projected to decrease by 3% for blue collar and farm workers (2% in the Baseline) and increase by 4 5% for other occupations (5-6% in the Baseline). The most demanded skills following the implementation of Fit for 55 will be those related to inter personal communication and the use of digital technologies, whereas the demand for skills related to the use of traditional tools and technologies is projected to decline. Anticipating changes in employment and the demand for skills as well as the socio-demographic profile of those most affected can facilitate the design of upskilling and reskilling efforts and promote the reallocation of workers across sectors and occupations.