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Daily ESG Briefing: 100 faith investors threaten to divest from Brazil if government doesn’t step up Amazon protection

The latest developments in sustainable finance

A coalition of almost 100 Catholic investors from 18 countries has threatened to divest from Brazilian companies and government bonds if the country does not “resolutely oppose” the deforestation of the Amazon rainforest and the deprivation of the rights of indigenous people. In a letter to Brazilian President Jair Bolsonaro, the signatories, which include the German Bank für Kirche und Caritas, raised concerns about the scale of deforestation and increasing number of wildfires in the Amazon, and their impact on indigenous peoples. The signatories made a number of recommendations, including the implementation of strict environmental legislation, and said that if improvements were not made, the group would “increasingly see [their] basis as current and potential institutional investors in Brazilian companies and government bonds removed”.

The Japanese Financial Services Agency and the Japanese Exchange Group JSE, are looking to include climate disclosure rules for listed companies in the upcoming revision of the corporate governance code, according to Nikkei. The code takes a comply-or-explain approach and is not legally binding. Nikkei also reports that the government is considering ending support for the export of coal-fired power plant equipment ahead of a meeting on climate change between US President Joe Biden and Prime Minister Yoshihide Suga in April. Japan has already changed its financing rules to allow financing for overseas coal projects by the Japan Bank for International Cooperation only in countries with a carbon transition plan in place, but has come under pressure from the US and UK to drop financing for exports altogether.

The US Securities and Exchange Commission is looking into credit rating agencies and auditing as part of its work around climate and ESG, Acting Chair Allison Herren Lee said at a recent Ceres webinar. The regulator is also looking at ways to increase accountability and transparency around the proxy voting process, she said, adding: “All of that is to say that these issues intersect widely with our mission at the SEC and we’re looking hard to ensure that we address them in a prudent and efficient manner, so that investors have the information they need to price risk and allocate capital as they deem appropriate”.

BNP Paribas Securities Services has teamed up with Clarity AI on an ESG data deal. Users of BNP’s Manaos platform will be able to access Clarity’s sustainability data to assess ESG risk and impact for their portfolio companies under the new agreement. BlackRock took a stake in Clarity AI in January.

The G20 Sustainable Finance Study Group held the first meeting since its reboot last Friday. During the meeting, the study group discussed the development of a G20 roadmap for sustainable finance. By the end of the Italian presidency of G20 this year, the group will have produced a report on the progress made on the G20’s “main deliverables” for 2021, including sustainability reporting, taxonomies and the role of financial institutions in supporting the Paris Agreement.

Barclays has started tracking its financed emissions in the Cement and Metals sectors, which will see it set reduction targets for both in its 2021 ESG report, it said. The bank, which committed to align its financing with the Paris agreement in March 2020, has so far only tracked its financed emissions for energy and power.

The European Commission’s Joint Research Committee is expected to say that nuclear power should be classified as sustainable under the EU taxonomy, after a draft report on the issue was leaked to Reuters. The report, due to be published next week, said that “the analyses did not reveal any science-based evidence that nuclear energy does more harm to human health or to the environment than other electricity production technologies”, and said that nuclear waste storage in deep geologic formations was “appropriate and safe”.