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Daily ESG Briefing: Dutch pension funds to engage on sustainability in real estate portfolios

The latest developments in sustainable finance

A €70bn alliance of Dutch pension funds has established a global engagement network to address sustainability issues and climate risks in their real estate portfolios. The Global Real Estate Engagement Network includes the pension funds for Detailhandel, Philips, Nedlloyd and Schilders.

Sustainable finance academics Andreas Hoepner and Theodor Cojoianu have teamed up with 14 others, including Irish politician and former president of the European Parliament, Pat Cox, to create a tool to root out greenwashing. GreenWatch claims to use artificial intelligence to identify ‘green’ corporate statements and compare them with publicly-reported emissions data to “determine whether the quantitative data supports the entity’s qualitative claims”. 

Brazil’s central bank announced new rules yesterday requiring the country’s banks to incorporate physical climate risks, such as droughts, floods and forest fires, into their stress tests, as of July next year. The new rules do not alter capital requirements for banks. The Banco Central Do Brasil also revealed yesterday in its first Report on Social, Environmental and Climate-related Risks and Opportunities that it plans to launch its own stress tests for climate-related risks next April. 

Staying with banks, US financial regulators are working on climate guidance for large lenders. Acting Comptroller of the Currency Michael Hsu told Reuters that his agency was working with other banking supervisors to assist lenders to get to grips with the risks that climate change poses to the financial system.

A group of UK lawmakers has written to the Bank of England urging it to use its policy tools to support green investment, and push for Paris-aligned financial regulation on an international level. Among the 51 signatories to the letter, who are mostly opposition MPs, are the leader of the Liberal Democrat party Ed Davey and former Pensions Minister Baroness Ros Altmann. The group also calls for the Bank to “introduce measures to ensure that the high risk of fossil fuel lending is reflected in regulation”.

Investors are moving from simply asking companies to disclose climate information to voting against directors they perceive as having failed on climate risk mitigation, according to the latest analysis of voting trends at US annual general meetings from ISS.

The Global Reporting Initiative has announced plans to develop a sustainability impact standard for the mining sector. The Initiative is now recruiting a working group for the standard, which it said would primarily be based around the environmental impacts of the sector, but would also include social and economic impacts as well. It expects the standard to be released by the end of 2023.