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Daily ESG Briefing: CPPIB sets up European renewables investment arm

The latest developments in sustainable finance

Canada Pension Plan Investment Board (CPP Investments) has established a new, UK-based platform called Renewable Power Capital Limited (RPC) to invest in solar, onshore wind and battery storage, among other technologies, across Europe. The business will be a majority-owned, but independently operated portfolio company. It is headed up by Bob Psaradellis as CEO, formerly of GE Energy Financial Services, and chaired by Shaun Kingsbury, formerly Chief Executive of the UK Green Investment Bank.

Illinois State Treasurer Michael Frerichs has co-filed a shareholder proposal at Johnson & Johnson, calling on the pharma giant to report on measures introduced since 2012 to “more effectively monitor and manage financial and reputational risks related to the opioid crisis”. In September, CBS News reported that the New York State Department of Financial Services had filed civil charges against the company, accusing it of insurance fraud and downplaying the risks of opioid products, seeking to recover $2bn. Johnson & Johnson is seeking to block the proposal via the US Securities and Exchange Commissions ‘no action’ process.

Dutch financial sector regulator DNB will in 2021 make climate-related and environmental risks part of its fit and proper assessments for board members of banks, insurers and pension funds. In an announcement, the DNB said the changes will mean it may, for example, ask a proposed management or supervisory board member about their knowledge in the area of climate-related and environmental risks, relevant legislation and its impact on the institution. Organisations will also be expected to provide information of board candidate’s knowledge and experience in the area. 

Credit Suisse has launched its first structured notes to be allocated across eight green sectors, and with “exposure to the ‘MSCI ESG Rating Select Indices’ on either US or Eurozone equities”.

On behalf of AXA Group, AXA Investment Managers is investing in €100m of senior non-preferred transition bonds, contributing to the financing of energy transition assets. The bonds have a 10-year maturity and will pay a coupon of 0.55%. Issued by BPCE, they will be listed on the Paris stock exchange.

Aviva Investors Real Assets has commissioned Vigeo Eiris to provide a second party opinion on its new Sustainable Transition Loan Framework, which will lend to property companies for spending linked to energy efficiency, renewables, green buildings, the circular economy, clean transport or well being. Borrowers must comply with criteria to receive loans under the framework. 

The UK’s Minister of Climate Change and Corporate Responsibility and Norway government-funded body Orbitas have collaborated on a “pro-palm oil business” report focused on climate risk and opportunity in Indonesia, Colombia and Peru. The risks identified in the report include the loss of 10% of agricultural land globally by 2050, 50% higher commodities and 76% of plantations in Indonesia becoming ‘stranded assets’.  

New research from the investor-backed Transition Pathway Initiative (TPI) reveals that only 18% of plane, car and shipping firms have set carbon reduction plans in line with a path to keep global warming to 2°C or below by 2050. It said this means that the likes of British Airways parent IAG, General Motors and Ford are “not playing their part” in meeting the Paris Agreement. The Aviation sector is the worst performing sector on Carbon Performance of all assessed by TPI, with only 1 airline out of the 23 largest aligned with a pathway to keep global warming below 2°C. The sector's poor performance is partly due to an overreliance on offsetting.

Macquarie Asset Management has announced a plan to manage its portfolio in line with net zero emissions by 2040. The infrastructure firm said it is already measuring greenhouse gas emissions at its private portfolio companies and will identify pathways to reduce emissions and work with each company to produce Paris-aligned business plans by the end of 2022.