Daily ESG Briefing: EU proposes US partnership to create ‘the right price signals’ for green economy

The latest developments in sustainable finance

The EU has today proposed “a comprehensive transatlantic green agenda” in partnership with US President-elect, Joe Biden, beginning mid-2021. The proposals include “a joint trade and climate initiative, measures to avoid carbon leakage, a green technology alliance, a global regulatory framework for sustainable finance, joint leadership in the fight against deforestation, and stepping up ocean protection,” the bloc said in a statement, adding that a sustainable economy relies on “the right price signals”, which can be achieved by coordinating on carbon taxes and markets. “As major financial hubs and regulators, the EU and the US are best placed to lead this work. Transatlantic cooperation on the design of a regulatory framework for sustainable finance would greatly support the private sector to know what counts as a green investment – much in the same vein as EU taxonomy,” it said. 

BlackRock has launched a new software application that allows investors to quantify climate risk within their portfolios via its flagship investment operations platform, Aladdin. Known as Aladdin Climate, the tool will provide investors with adjusted security valuations and risk metrics based on the transition to a low-carbon economy. It is initially available as an add-on for existing Aladdin clients, with asset class coverage set to be rolled out over the course of 2021. BlackRock has also expanded access to ESG data on the platform through new partnerships with data providers, Sustainalytics and Refinitiv.

Nasdaq is seeking to bring in rules requiring more than 3,000 of the firms listed on its US exchange to disclose the split of employees by race, gender and sexual orientation. It also wants to introduce a ‘comply or explain’ requirement to have at least two “diverse” directors at the bulk of firms. Nasdaq is pursuing the change via a proposal filed yesterday at the US Securities and Exchange Commission.

C$144.5bn asset manager Mackenzie Financial Corporation has announced it will acquire one of Canada’s oldest green investment houses, Greenchip Financial, for an undisclosed sum. Greenchip, which launched in 2007, invests in renewables, energy efficiency, clean technology, water, sustainable agriculture, and transportation. It runs a single, C$170m green equity strategy for endowments, foundations and high net worth individuals, as well as sub-advising Mackenzie’s own C$315m Global Environmental Equity Fund. 

DWS, the asset management spin-off of Deutsche Bank, has launched A transformational framework for Water Risk, stressing the need for investors to adopt a water charter covering their own operations and their investment activities, possibly in collaboration with other asset management companies.

Bank of America has reportedly confirmed a formal ban on financing oil and gas exploration in the Arctic. According to a company spokesperson Larry Di Rita, while the bank had not historically provided project financing for such projects, it will now “codify” the practice into its policies.

Shell is being sued by a coalition of civil societies led by Friends of the Earth Netherlands for allegedly expanding its oil and gas operations despite knowing the harmful impact of climate change for decades, according to The Guardian. If successful, the company could be forced to reduce its carbon emissions and adopt a greener business model such as the renewables-focused approach of Danish utility Ørsted.