Daily ESG Briefing: “ESG 1.0 requires you to vote for climate resolutions” UK asset owners warn managers

The latest developments in sustainable finance

A group of UK asset owners has penned a letter to asset managers saying “ESG 1.0 for beginners requires you to vote for [climate] resolutions”. Foundations including Friends Provident, Lankelly Chase and the Polden-Puckham Charitable Foundation partnered with PensionsBee and Jesuits in Britain to write: “How can any asset manager claim to support the Paris climate agreement and be engaging high risk sectors like oil and gas to align, and then vote against what they are engaging for?” and warning that “asset manager ESG claims are not always aligned with basic ESG practice”. “Following all the hype of the past year, with some of the world’s largest publicly listed investment banks entering the ESG market and astonishing AUMs being reported as having integrated ESG, we asset owners are watching this year’s AGM season with great interest,” the investors said.

The UK University Superannuation Scheme – the pension fund for university employees – will exit selected tobacco and thermal coal mining companies, as well as those involved in the production of cluster munitions, white phosphorus and landmines. USS, which has more than 400,000 members and manages more than £68bn, will divest over the next two years, after years of pressure from members and campaign groups.  

Tokio Marine HCC has completed the acquisition of GCube, a leading provider of insurance services for renewable energy projects in the wind, solar, wave, hydro and tidal sectors, for an undisclosed sum. The deal will “create a new ‘centre of excellence’ in renewable energy insurance”, the paid said in a statement. 

Guernsey has launched its first set of voluntary green private equity principles. Private equity funds domiciled or administered in Guernsey have a net asset value of more than £120bn. The principles are guided by TCFD recommendations and aim to address climate risk and resilience. 

China has removed coal from its green bond eligibility list, meaning Chinese companies will no longer be allowed to use the green bond market to finance efficient coal power plants – known as “clean coal”. The controversial inclusion of coal in the country's Green Catalogue had been thought to put off some green investors, and its removal has been anticipated for a number of years. 

Norges Bank Investment Management is among those to have joined the International Securities Lending Association’s Council for Sustainable Finance. Other new members include the Canadian Securities Lending Association, the South African Securities Lending Association, EquiLend, FIS Global, and IHS Markit.