Daily ESG Briefing: Fewer than 1% of financial institutions achieve gender balance

The latest developments in sustainable finance

Just three of 540 global financial institutions have achieved gender balance in their senior leadership, according to the latest Gender Balance Index from think-tank OMFIF. Only the Federal Reserve Bank of Richmond, Victorian Funds Management and the Danish nurses pension fund, Pensionskassen For Sygeplejersker, received a perfect 100 on the index, which scores institutions based on how many women they have at different levels of their senior management teams. The report also found that just one of the 31 central bank governors appointed last year was a woman, and only six of 50 commercial banks in the index were headed by a woman. In another report launched to mark International Women’s Day today, Vigeo Eiris flagged the low take-up of ‘gender-lens’ investing – investment with the intention of addressing gender disparities. The study noted that, while such strategies used to be driven by development finance, now banks, asset managers and investment funds were fueling growth in the segment. 

The International Financial Reporting Standards (IFRS) Foundation is considering adopting a framework co-developed by CDP, the Climate Disclosure Standards Board, the Global Reporting Initiative, the Integrated Reporting council and the Sustainability Accounting Standards Board as the basis for its climate reporting standards. In its latest update, trustees for the IFRS Foundation said the board would take a ‘building blocks’ approach to developing reporting standards, providing a global baseline, while still allowing flexibility. Reflecting on feedback from a recent public consultation, the Foundation said it would prioritise climate change over social and governance factors, and would focus on enterprise value. “The Trustees intend to publish a feedback statement that summarises the responses received to their 2020 Consultation, and how that feedback informed the above decisions,” it continued, adding that a new board would be decided ahead of COP26. 

The boom in companies supporting the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) is mostly “cheap talk”, with firms cherry-picking non-material climate risk information for their reports, according to a study from a Swiss university. ETH Zürich used specially-developed AI to analyse the disclosures of TCFD-supporting firms, disputing the TCFD’s claims on the uptake of aligned disclosure by saying that “TCFD supporting firms might not have increased their level of disclosures […] they might simply have re-structured already existing information such that they comply with the TCFD recommendations”. It recommended that TCFD reporting be made mandatory.

Europe’s insurance association has urged EU regulators to prioritise prevention, risk reduction and resilience building over pricing when considering insurance and climate change. Responding to a discussion paper from the European Insurance and Occupational Pensions Authority, Insurance Europe said that “a more proactive approach to climate change, prioritising prevention, risk reduction and resilience building, [was] essential for maintaining insurability and affordability”.

US fintech firm Data Gumbo has launched a sustainability measurement tool that uses operational data from companies and their supply chains to calculate sustainability impact in real-time. The firm claims that its GumboNet ESG tool can determine GHG emissions down to a single gallon of diesel.