Daily ESG Briefing: Federated Hermes to chair UK carbon accounting hub

The latest developments in sustainable finance

Investment manager Federated Hermes will chair a new UK-based hub for the Partnership for Carbon Accounting Financials (PCAF), the increasingly influential carbon accounting initiative that grew out of the Netherlands. Members of the UK coalition will include Triodos Bank UK, NatWest Group, Lloyds Banking Group, CDC Group, Investec and Nationwide Building Society. Last month, PCAF launched a consultation on the world’s first global carbon accounting standard.

The Central Bank of Malaysia will undertake a ‘pilot implementation’ of its green taxonomy this month with “selected financial institutions”, its Assistant Governor Fraziali Ismail said in a speech yesterday. He added that the regulator has also set a target of 2022 for climate risk to “be featured more visibly in the risk management practices of financial institutions”.

A new report from Imperial College Business School highlights the need for investment in companies which do not fit existing green definitions and calls for “transition finance”, targeted at companies that do not match existing guidelines, to play a more prominent role in order to achieve 2050 emissions targets. The report is available here.

European Commission President Ursula von der Leyen has confirmed a new 55% emission reduction target to ensure a pathway to climate neutrality by 2050 in her first State of the Union speech. The scale-up of the EU’s 2030 climate target is a central pillar of the flagship proposal of her Commission: the European Green Deal. Von der Leyen is pushing for 37% of the €750bn Recovery Fund to be spent directly on European Green Deal objectives.

New analysis from the Canada Climate Law Initiative reveals a ‘troubling incrementalism’ in the Canada Pension Plan’s (CPP) efforts to manage climate-related risks. The analysis finds that the CPP’s pattern of investing in oil & gas-related companies is not aligned with Canadian or global commitments to rapidly reduce carbon emissions and may not be consistent with pension trustees’ fiduciary obligations. The full report is available here.