Daily ESG Briefing: Export Finance group commissions sustainability study

The latest developments in sustainable finance

International Financial Consulting and Acre Impact Capital have been commissioned by the International Chamber of Commerce Global Export Finance Committee’s Sustainability Working Group to develop a white paper reviewing the state of sustainable finance across the export finance industry. The paper, set to be published in June 2021, will propose both product and policy recommendations aimed at increasing the flow of export financing towards sustainable activity. The ICC-SWG, whose 16 bank members include BNP Paribas, Citi, Deutsche Bank, and HSBC, was established in 2018 with the objective of promoting discussion and exploring the potential for the export finance industry to be more proactive in supporting the global sustainability agenda.

Capital flow into ESG-themed exchange-trade funds in China increased 464% between 2018 and 2019, according to the Ping An Digital Research Center, part of insurance giant Ping An. The organisation’s new report also found that ESG funds had outperformed the China market average so far in 2020. Chenxi Yu, Deputy Director of the Center, said: “With the rapid growth in ESG-linked investments, we are seeing an increase in the quantity and quality of ESG disclosures from Chinese companies.” The report recommends further improvements in ESG data and ratings coverage, greater use of alternative data and technology, the establishment of ESG ratings and data for bonds and issuers and the development of more diversified ESG products.

Robeco has announced its ambition to achieve net-zero greenhouse gas emissions by 2050 across all its assets under management. To do so the asset manager will develop a roadmap and set interim targets, which will include the reduction of portfolio emissions, investment in climate solutions, and engagement with investee companies to drive emission reductions.

Between $100trn and $150trn of investment is needed over the next three decades to transition to a low carbon economy, according to a new report by Global Financial Markets Association and Boston Consulting Group.

The number of the UK’s top 100 businesses reporting on sustainability has dropped from 99 in 2017 to 94, according to KPMG International’s Survey of Sustainability Reporting. While the fall means the UK has slipped behind Sweden, Spain, and France, it still remains one of only 14 nations around the world with reporting rates above 90%. In addition, it remains significantly higher than the European average of 77%.

Despite 68% of the 50 largest companies in the EU referencing the recommendations of the Taskforce on Climate-related Financial Disclosures, only 18% adequately disclosed their resilience to different climate scenarios, according to the Climate Disclosure Standards Board. The state of EU environmental disclosures in 2020 study also found that, although all companies provided GHG emissions disclosures, just 10% disclosed metrics on biodiversity. The report concluded that investors’ freedom to integrate information disclosed under the EU’s rules into their decision-making irelies on further improvements to the Non-Financial Reporting Directive on TCFD, risk and materiality.