Daily ESG Briefing: Biden to review DoL’s new ESG rule

The latest developments in sustainable finance

In his first week in office, US President Joe Biden has ordered a review of the Department of Labor’s widely opposed ruling that would make it harder for retirement fiduciaries to steer assets towards ESG funds. The new rule, which has prompted backlash from the investment community, was passed in the final days of the Trump administration and came into effect this month. It states that regulation “will be clearer and more consistent” if it demands that retirement schemes focus on whether “a factor is pecuniary, rather than being required to navigate imprecise and ambiguous ESG terminology”. “It's great @WhiteHouse recognizes  @USDOL #ESG rule is flawed & needs immediate review,” said Lisa Woll, CEO at sustainability-focused investor group US SIF on Twitter. 

Brookfield Asset Management, the Canadian alternatives investor that hired ex- Bank of England Governor Mark Carney as its Head of ESG and Impact Fund Investing last summer, has found itself on the exclusion list of Storebrand. The Norwegian asset manager has axed the company based on its controversial weapons exclusion criterion

A number of UK asset owners including the BT Pension Scheme and Local Government Pension Scheme have written to the Prime Minister to call for more detailed plans to be published on the country’s decarbonisation plans, and for greater cooperation with private finance. The signatories have also written to the Secretary of State for Transport, Grant Shapps, calling on him to implement a number of recommendations as part of the Government’s Transport Decarbonisation Plan.

The UK All-Party Parliamentary Group for Local Authority Pensions has launched an inquiry into how local authority pension funds and institutional investors more widely can ensure a just transition to net zero. The group intends to publish the results of the inquiry ahead of COP26 in November. Those who wish to attend, submit evidence or comment on the inquiry should contact steve.barwick@smith-institute.org.uk

The Responsible Mining Foundation has called for the creation of an independent Global Tailing Institute to be created, on the second anniversary of the fatal tailings dam collapse in Brumadinho, Brazil.  The Foundation praised the publication of the Global Industry Standard on Tailings Management but said the new Institute would encourage a more ambitious standard, and offer a chance to “rebuild trust in the industry, and use its independent status to foster inclusive international collaboration”. 

Big Issue Invest has teamed up with the University of Oxford’s Government Outcomes Lab to produce a report detailing their efforts to create shareable data on social outcomes contracts and impact bonds. As part of the initiative, the pair are urging all players in the social impact bonds space to share their data via the Indigo Impact Bond Dataset.