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Daily ESG Briefing: European firms still falling short on climate disclosure, finds study

The latest developments in sustainable finance

78% of Europe's biggest firms fail to report sufficient climate and environmental information to investors, according to the latest research from the Climate Disclosure Standards Board. Just over half of the companies assessed in the study disclosed details on both transition and physical climate risks, as required by the Taskforce on Climate-related Financial Disclosures recommendations.

The PRI has published a new guide providing a suggested framework for fund managers and asset owners to incorporate ESG factors into hedge fund strategies. The paper identifies client demand, materiality and regulation as key drivers to the increasing interest in RI in hedge funds.

S&P Global has launched ESG Scores based on the SAM Corporate Sustainability Assessment (CSA), an annual evaluation of companies' sustainability practices that has been used to underpin the Dow Jones Sustainability Index. Users can access corporate ESG Data for over 7,300 entities and the scores will be made available through Xpressfeed, S&P Global Market Intelligence’s flagship data feed management solution. The scores also serve as analytical tools for S&P Dow Jones Indices’ core ESG index offerings including the S&P 500 ESG Index.

Rainforest Action Network has called the ESG financing policy of Japan’s largest bank, Mitsubishi UFJ Financial Group (MUFG), “disappointing”, saying it falls short of peers including Mizuho Financial Group and Sumitomo Mitsui Financial Group. This year’s Banking on Climate Change Report found MUFG was the 6th largest global lender and underwriter to fossil fuels since the Paris Agreement, with $119bn in financing between 2016 and 2019. It has also been under pressure from NGOs over its financing of palm oil operations. 

The Australasian Centre for Corporate Responsibility (ACCR) has published a new report focusing on how labour hire and contracting is being used in the mining, construction, and commercial cleaning sectors. The report reveals that ASX100 companies are only reporting to shareholders and the public about their direct employees, while information about their indirect workforces remains unknown. ACCR recommends that investors use their ownership rights to engage companies on their entire workforce. 

Robeco has been appointed by the Wales Pension Partnership (WPP) as its voting and engagement provider. WPP is the “pool” for the eight Local Government Pension Scheme funds in Wales. Robeco will assist in developing and framing a voting policy which will be implemented across WPP’s £5bn active equity portfolio. It will also work with WPP on structuring engagement principles and assist with integrating industry best practice into the WPP’s investment process and decision-making framework, it said in a statement. 

The International Securities Lending Associations Council for Sustainable Securities Finance has published a position paper titled Reinforcing Global Sustainable Finance by Improving Guidance on Securities Lending, which aims to establish a “consistent global approach” to measures that may impact upon sustainable securities lending. 

A new report published by ShareAction claims top asset managers are failing to address modern slavery issues at companies they own.Major investment managers including Fidelity, BlackRock and Vanguard are among those ranked for their performance on mitigating human rights and labour abuses. The full report is available here.

The US Federal Reserve faces political pressure to join the Network for Greening the Financial System, with 42 members of Congress writing a letter to Fed Chair Jay Powell warning on climate change.

In related news, NGO Reclaim Finance has published a report exploring the climate impact of the European Central Bank’s new Quantitative Easing programme, as the World Resources Institute says QE for economic recovery must consider climate change.