Daily ESG Briefing: Blackrock discloses financed emissions using PCAF standard

The latest developments in sustainable finance

BlackRock has published its first disclosure of financed Scope 1 and 2 emissions under the Partnership for Carbon Accounting Financials in its 2021 TCFD report. From 2019 to 2020, absolute emissions dropped from 344.3m tonnes of CO2 to 330.7m, while carbon intensity dropped from 73 tonnes of CO2 per million dollars of AUM to 58. Around 1,000 companies in BlackRock’s ‘climate focus universe’ of carbon-intensive companies, which account for around a quarter of its total AUM, were responsible for 86% of its financed emissions in 2020. The emissions analysis represents BlackRock’s corporate securities and real estate holdings, around 65% of its AUM, and it cautioned that some data quality and availability was limited.

ConocoPhillips has indicated it will not adopt a Scope 3 emissions target despite shareholders having passed a vote in favour of one last year. According to Bloomberg, company Vice President Dominic Macklon said on an analyst call yesterday that such targets would result in supply shifting to “less accountable sources”. Together with other US producers such as Exxon and Chevron, ConocoPhillips has pledged to decarbonise its own operations but has excluded customer emissions from these targets.

Large cap US companies in the top 20% of board ethnic diversity outperformed those in the bottom 20% by 1.76% from 2012 to 2020, according to new research from Calvert. Board diversity in the US is much higher than in Australia, Canada and the United Kingdom, and Calvert said that the relationship between board diversity and stock price was “less significant” in these three countries.

Within five years, all fund managers employed by the New Zealand Superannuation Fund (NZ Super) in Asia, or real assets that the fund intends to acquire, will be expected to meet best-in-class ESG standards or they will not be hired or bought, Asia Investor has reported. Head of Responsible Investment at NZ Super, Anne-Maree O’Connor, told the publication: “Too often managers are not ahead of the game. The difference is really obvious when you get a good one.”

Most of the 29 steelmakers assessed by Moody’s new Carbon Transition Assessment (CTA) scores for the industry are “moderately positioned for transition to a low-carbon future”. Frank Medrisch, AVP-Analyst at Moody’s Investors Service, said: ”While steel producers generally have limited options for mitigating carbon transition risk, their production method, and particularly their plant technology, is a critical factor in determining how well they are positioned for the transition to a low carbon future.” Moody’s has already published CTA scores for approximately 400 rated issuers to date across the most carbon-exposed sectors, including: oil & gas, utilities, automobiles and airlines.