Daily ESG Briefing: Climate-tardy banks to face tougher measures, says EU regulator

The latest developments in sustainable finance

The worst climate laggards among Europe’s banks will be hit with a “qualitative supervisory measure”, the European Central Bank (ECB) has said in a blog, which also revealed the preliminary findings of a self-assessment undertaken by banks on their management of climate and environmental risks. The blog’s authors noted that, while almost all banks have developed implementation plans in line with ECB guidance from last November, just a third of those plans “are at least broadly adequate”. They urge banks to take “swifter action”, adding that “where banks are extreme outliers, the ECB will impose a qualitative supervisory measure as part of the 2021 Supervisory Review and Evaluation Process”. Qualitative requirements cover items such as risk and data management. 

Investors have accused the management of US conglomerate Johnson & Johnson (J&J) of being “stubbornly dismissive” of their requests for the firm to ensure fair access to its Covid vaccine. The claims, made in a statement coordinated by the Interfaith Center on Corporate Responsibility (ICCR), come after it was revealed this week that J&J had exported Covid vaccines from South Africa to Europe. Critics say the exports undermine the company’s commitment to support inoculation in South Africa, where only some 7% of adults have been vaccinated – compared with 70% in Europe. “Investors say they began warning companies as early as March 2020 that they needed to prioritise distribution of Covid-19 vaccines to low- and middle-income countries where the need would be greatest or they would be complicit in fostering a ‘vaccine apartheid’ that would endanger lives and create serious brand risk,” said ICCR, which represents 300 members including faith-based investors, pension funds, trade unions, NGOs and dedicated SRI investment managers. J&J did not respond to a request for comment. 

Dutch pension investor APG has partnered with US pension giant CalSTRS and a subsidiary of the Abu Dhabi Investment Authority (ADIA) to buy a newly-formed renewable energy firm. The trio are long-term investors in clean energy funds run by asset manager Capital Dynamics, which has merged its US-based clean energy infrastructure team with its energy affiliate Arevon Asset Management to form Arevon Energy Inc. $2.4bn of assets that APG, CalSTRS and ADIA had invested in Capital Dynamics’ funds will be moved over to Arevon, giving the asset owners 100% ownership of the new company. Subject to regulatory approval, the deal will close by early 2022. 

$1.5bn investment house ThomasLloyd has become a member of the Swiss Sustainable Finance body. The firm, which is based out of London and Zurich, invests exclusively in sustainable infrastructure, agriculture and property businesses in Asia. 

Climate law firm ClientEarth has filed two complaints at the UK’s Financial Conduct Authority, accusing food delivery service Just Eat and travel company Carnival of failing to disclose climate risks to investors. A Just Eat Takeaway.com spokesperson told RI: “We do not recognise the allegations made by ClientEarth. We have disclosed all information that we considered material up until 31 December 2020 in our Annual Report and we continue to adequately inform the market about all material information as needed". Carnival had not replied to a request for comment at the time of publication.