Daily ESG Briefing: ESG risks ‘material’ in 85% of Moody’s private sector issuer rating actions in 2020

The latest developments in sustainable finance

ESG risks were material in 85% of Moody’s private sector debt issuers rating actions in 2020, the ratings agency has said in a new report. This is a notable increase up from 32% in 2019. Of the 8,700 ratings actions analysed, 71% referred to social risk factors, while 52% referred to governance issues and 13% environmental. Covid-related factors drove up the frequency of social risk materiality, with around 65% of ratings referring to it. The second most common social risk was demographic and societal trends, at 20%. 

MS&AD, one of Japan’s three largest non-life insurers, has adopted a policy of no longer insuring or investing in new coal power plants. MS&D is the first Japanese insurer to make this commitment, with climate campaigners now focusing their efforts on Tokio Marine, Japan’s largest insurer in the power sector.

The UK’s Business, Energy and Industrial Strategy Select Committee has launched an inquiry into net-zero governance. The inquiry will examine the role of the Department in delivering net zero, and how it can best engage with other public sector bodies and the general public to drive the push for net zero as well as the role and oversight of net-zero performance metrics. The Committee is inviting evidence submissions until the 27th of August.

Chevron has no plans to shrink its oil and gas business in favour of renewables, its Chief Financial Officer has said. Speaking at the Reuters Global Energy Transition Conference, Pierre Breber said that Chevron would invest $3bn in reducing emissions between now and 2028, including $750m in renewables. At its AGM in May, 61% of shareholders voted in favour of a FollowThis resolution asking Chevron to significantly reduce its Scope 3 emissions.

Half of Nordic companies operating as part of the ocean economy are not disclosing their impact and dependencies on ocean ecosystems, according to a report by the Green Digital Finance Alliance and Copenhagen Business School. The quality of reporting is lowered by a lack of common frameworks and standards, with only 22% of ocean disclosure from all Nordic companies – only 27% of which disclose on ocean factors – being classified as good. The report also found no correlation between company ESG scores and reporting quality. 

Jesus College has announced plans to become the first Cambridge college to fully divest from fossil fuels, aiming to ditch its final indirect investments by the end of 2022. The college is aiming to achieve net zero emissions from its investments by 2038 and will allocate at least £2m to funds focusing on environmental improvements and climate change. 

The Green for Growth Fund attracted €135m in new investments in 2020 and has lent €1.15bn to over 40,000 end borrowers since 2009, according to its 2020 impact report. The fund, established by the European Investment Bank and Germany’s Development Bank to invest in green projects across Eastern Europe, the Caucasus and MENA, estimates that its investments have supported more than 1GW of renewables capacity and resulted in a CO2 emissions reduction of 970,802 tonnes a year.