Capital markets can’t thrive when ecosystems default is looming

• Biodiversity is being lost at an alarming rate

• USD44 trillion of annual economic value generation is dependent on nature

• We have no time to lose with ‘business as usual’

Source: WWF’s Living Planet Report, 2020

• DCM is the largest and deepest pool of global capital

• Impressive growth in bonds labelled as green, social and sustainable, poised to reach 10% of issuance in 2021, is welcome…

• But the broader contribution of debt capital markets (DCM) is unclear…

Capital Markets matter for the future of our Planet

WWF’s call to action for zero-carbon & nature positive DCM

WWF’s calls to action are focused on a small number of people…

• Adopt ambitious pledges and commitments to align financing activities with global agreements and goals, including facilitated capital markets activities such as underwriting and arranging of bonds• Set ambitious short-term targets for

increased green transactions and decreased significant harm transactions (i.e., fossil fuels and harmful sectors)• Align internal incentives and

bonuses with the rapid transition in capital raising activities • Grow the green bond market to trillions

per year before 2025

• Etc.…

A balancing act: More green? Or more harm?

Source: “Banks always backed fossil fuel over green project – until this year”, Bloomberg, May 2021. Bloomberg data includes both bonds and loans

Which investment banks are leading in the ‘race-to-zero’?

The ‘biggest’ arrangers/underwriters (by volume in USD), are not the ‘greenest’

The ‘greenest’ arrangers/underwriters (by % of green vs. total volume) are much smaller

Source: Bloomberg League Tables (apportioned amounts, for 5 years period from 2016-2020)

WWF’s more harm than good League Table and Significant Harm Ratio

Traffic-light model (red/amber/green) inspired by Platform on Sustainable Finance proposal(1) to extend the EU-Taxonomy to ‘harmful activities’. We calculated:

Volume of capital arranged orunderwritten which is fossil-fuel-related (numerator) divided byvolume arranged and underwritten which is labelled as green (denominator) (1) Report on Taxonomy extension options linked to environmental objectives, EU-mandated Platform on Sustainable Finance, July 2021. Data from Bloomberg

IN THE “RACE-TO-ZERO” TO REDUCE CARBON EMISSIONS AND REVERSE NATURE LOSS DEBT

CAPITAL MARKETS MUST RAPIDLY SHIFT TO BECOMING ‘ZERO-CARBON & NATURE POSITIVE

DEBT CAPITAL MARKETS’.

Sustainable Debt Issuance Volumes

Bloomberg Green Bond League Tables

Underwriting Fees from ESG-related Bonds

WWF’s scenarios for rapid change Zero Carbon & Nature-Positive Debt Underwriting• Leading global underwriting banks,

members of Net Zero Banking Alliance, explicitly include their off-balance sheet activities (e.g., debt security underwriting/arranging, etc.) in their 2025 net-zero targets

• Use WWF More-Harm-Than Good League table to monitor progress on a quarterly basis

• Corporate & Investment bankers are incentivized to deliver on net-zero targets

• By 2025, at the latest, withdrawal from any underwriting transactions that (re-)finance fossil fuel