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Daily ESG Briefing: EU and EIB policy blamed for halting Poland’s last new coal plant

The latest developments in sustainable finance

EU climate policy and a shift away from fossil fuels by the European Investment Bank have forced two Polish state-run utilities to put the brakes on the country’s last new coal plant. Joint sponsors Enea and Energa said they needed more time to find investors to support the Ostrołęka C power station, due to the changing market for European coal. In a statement, the firms said the 1GW plant could halt construction despite already being underway. The decision follows legal action against the project by law firm, ClientEarth, which hailed the project’s suspension as “the end of new coal” in Europe. In August, a court ruled that the project had never been valid, ordering Enea to publish documents explaining how it would be profitable. ClientEarth’s Head of Central and Eastern Europe, Marcin Stoczkiewicz, said: “It was clear from the start that this plant was a stranded asset in the making and would destroy value for shareholders. This is transition risk in action.”

Frankfurt-based index provider Solactive has acquired a minority stake in Right.based on science, a German climate data start-up producing software called X-Degree Compatibility to measure a company or portfolio’s contribution to global warming and support scenario analysis, portfolio design and climate reporting. Ethical investment bank GLS in Germany recently used Right.based on science to assess its lending book against 2°C.

The £18bn (€22bn) Local Pensions Partnership (LPP), one of the eight UK local authority pension pools, has selected Robeco to provide engagement services for its global equities and fixed-income investment portfolios. The five-year agreement will see LPP partner with Robeco’s Active Ownership team to deliver an engagement strategy across its internally- and externally-managed equity and fixed-income assets.

Allianz Global Investors plans to push investee companies on TCFD-aligned climate risk assessment and disclosure in the run up to AGM season, it says in its updated Global Corporate Governance Guidelines. Eugenia Unanyants-Jackson, Global Head of ESG Research, said she expects to see more shareholder resolutions linked to climate change in 2020, with a broadening out from energy companies to other sectors such as financial services. "We will… show our support for proposals that seek to hold companies to account, through transparent information sharing, on climate-related financial, physical, transition and regulatory risks and how the company is managing those risks," she said.

Equity research provider Redburn is launching a new ESG framework for research analysts, part of a partnership with professional services firm OMS. The partnership will see Redburn use OMS’ ‘human capital rating system’ alongside SASB’s Materiality Map to produce “a complete, comprehensive and coherent set of ESG metrics and indicators [and] a fully integrated approach to corporate investment appraisal and valuation”. Redburn will also develop ESG products under the Redburn Purpose banner, it has said.

Boulder in Colorado has become the first US county to screen potential insurers of county assets based on their fossil-fuel phase-out plans. The Board of County Commissioners plans to examine insurers’ energy investments to see if they “fit” with Boulder County’s commitment to sustainability and climate action. Bill McKibben, founder of environmental group 350.org, hailed the news as “a great step forward” that “demonstrates to the financial industry that important customers are becoming uneasy with its inertia, and beginning to demand that the industry face its role in causing, and hopefully solving, the climate crisis”.