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Daily ESG Briefing: Axa wants Net Zero group for underwriters as its dumps State Bank of Indian over Carmichael

The latest developments in sustainable finance

Axa Grou’s CEO, Thomas Buberl, has endorsed the creation of a UN-backed Net Zero Underwriting Alliance, mirroring the Net Zero Asset Managers’ Initiative launched on Friday, and the Net Zero Asset Owners Alliance created in 2019. NGOs welcomed the idea, but Lucie Pinson, Executive Director of Reclaim Finance, was among those warning that for the initiative to be credible, it will require “an immediate end to insuring new oil and gas production projects on top of any new coal projects”.

The move comes as Axa Investment Managers dumped investments in the State Bank of India in protest over its role in financing the Carmichael coal mine in Australia. Insurer Fidelis has also reportedly rules out underwriting the project, according to campaign group Market Forces, which claims the firm's new environmental commitment automatically disqualifies the high-profile project, making it the 28th insurer to exclude it so far. Market Forces cites Fidelis CEO Richard Brindle saying: “We have declined to offer capacity for any of the Adani construction and operation risks, and have also declined to support non-payment insurance for infrastructure financing for the project. We will continue to be vigilant in ensuring that we do not provide insurance for any coal projects.”

Natural catastrophes caused $76bn in global insured losses, according to figures from Swiss Re – up 40% on 2019. The report shows most of the damage came from “secondary peril events” including severe convective storms and wildfires in the US. These events are set to increase further, said Swiss Re, as a result of climate change.  

BlackRock has released an interim report as part of its controversial mandate with the European Commission to assess the role of banking regulation in fostering sustainability. The document, released yesterday, found that the banks interviewed for the study so far often point to in-house efforts to enhance ESG risk integration, but “the majority have not formalised an ESG risk integration strategy with clear timelines and responsibilities.” The EU’s ombudsman ruled last month that the Commission “should have been more rigorous, and brought a wider perspective to bear” when awarding the contract to BlackRock, because of its links with the banking industry. 

Think tank 2 Degrees Investing Initiative has created a free tool to help French financial institutions assess their exposure to climate transition risk. Allianz “road tested” the tool, which is meant to enable investors to implement the French Prudential Supervision and Resolution Authority’s climate exercise, due in coming weeks. The work has been done under the five-year, €18bn project to align the French and European sustainable finance agendas. 

Investors are today being asked to step in and ensure better treatment of staff and residents at nursing homes in the aftermath of the Covid-19 pandemic. UNI Global Union, which represents millions of care workers globally, has released a report about the poor health & safety standards, under-staffing, low pay and precarious contracts seen in many care homes, exacerbated by their “over financialisation”. “We are calling on investors in nursing homes to take responsibility in tackling these challenges, which we believe cannot be resolved without investor impetus,” the union said in a statement. 

Growth company advisor finnCap Group has partnered with sustainability fintech specialist World Wide Generation to provide businesses with a new app to track their sustainability. Company Tracker claims to enable SMEs to “measure and improve their social, economic and environmental impact” in line with the Sustainable Development Goals.