Daily ESG Briefing: Bank of Japan to buy more green bonds and start disclosing in line with TCFD

The Bank of Japan is planning to increase its purchases of local and foreign currency denominated green bonds, and begin disclosing in line with TCFD standards, according to a speech made by Governor Haruhiko Kuroda today. The Governor also challenged the use of 'market neutrality' in central bank operations, saying that "when focusing on climate change issues, there is the question whether the neutrality of resource allocation is ensured simply by treating existing investment or loans equally".

UK-based grid operator National Grid has confirmed that its 2022 policy review will address ESG in remuneration arrangements, with the Chair of its Remuneration Committee, John Dawson, describing it as “essential”, in response to a question from the Local Authority Pension Fund regarding integrating climate considerations into remuneration ahead of its pay policy vote in 2022.

The Bank of England has confirmed that its upcoming green gilts will have equivalent eligibility to existing gilts in its market operations. The bank said that it had received questions on the issue from market participants, and confirmed that it will be able to purchase green gilts in line with existing asset purchase facility operating procedures and that green gilts will be eligible as collateral in the bank’s market operations. 

Hartree Partners and Wildlife Works have signed a voluntary carbon market deal they say will generate over $2bn of investment in biodiversity and deforestation protection. The two firms claim that their deal will increase the availability of “avoided deforestation projects” by 40%, with the development of 20 projects across Africa, Asia and Latin America. The portfolio will aim to meet global best practice standards including the Voluntary Carbon Standard, the gold level Climate, Community and Biodiversity standard, and the SD Vista standard.

The UN Framework Convention on Climate Change has published a climate action pathway for finance, setting out key goals and milestones for the finance industry to both achieve and finance a 1.5C decarbonisation. The pathway covers five goals: closing the ‘valuation gap’, tackling short termism, creating systemic transformation tools and building capacity, improving incentives and risk management, and zero carbon, resilient infrastructure and real assets, and sets out detailed milestones for policymakers, financial institutions and civil society.