Daily ESG Briefing: Sumitomo to acquire stake in Affirmative as part of strategic partnership

The latest developments in sustainable finance

Sumitomo Mitsui Financial Group has thrown its weight behind fixed-income impact house Affirmative Investment Management, forming a “strategic alliance” which will see it distribute Affirmative’s funds to Japanese clients in return for an exchange of impact investing and sustainability expertise. According to a statement from Sumitomo, the deal includes an investment of up to $25m, representing 24.9% of total outstanding shares in Affirmative, although a statement from Affirmative says the capital investment is still just a proposal. Affirmative, which runs more than $750m, has offices in the UK, US and Australia. Its team includes former CEO of Nikko Asset Management Europe, Stuart Kinnersley; former Head of Goldman Sachs Asset Management International, Stephen Fitzgerald; and former Head of Corporate Responsibility at the World Bank, Judith Moore. 

Only 22% of German companies could show they meet the German National Action Plan on Business & Human Rights requirements, according to a survey presented by Germany’s Labour Minister Hubertus Heil and Development Minister Gerd Müller. The second of its kind, the survey asked 455 companies about their due diligence efforts. The Government previously said it will consider mandatory due diligence legislation if less than 50% of large German firms introduce human rights protections by 2020. These results mean that the coalition agreement now applies, the Ministers stressed.

Ikea, Unilever and Nestle are three of 18 European companies to form the European Clean Trucking Alliance in a bid to decarbonise road freight transport in the EU. The group has also released Europe’s Opportunity to Decarbonise the Road Freight Sector, outlining steps the European Commission could take to make the shift to zero-emissions trucks a priority.

Brazilian miner Vale has reached a non-binding agreement with Japanese steelmaker Kobe Steel and Mitsui & Co. to collaborate on providing low-CO2 iron metallics and steelmaking solutions for the global steel industry.

Human rights organisation ESG Transparency Initiative has updated its ‘High Risk, Low Reward: The Business Case for Divesting from For-Profit Prisons’ research – first released last year – so it can be better used as a resource for investors and stakeholders. The report led to CalPERS divesting from prison corporations CoreCivic and GEO Group when it was first released.

Ceres has released a “blueprint for responsible policy engagement on climate change”, explaining how large US companies should align their lobbying with science-based climate policy goals, and restructure to more appropriately handle climate risk.

West Berkshire Council in the UK has launched what is claims is the first municipal-level green bond to finance renewable energy in the country. Arranged by Abundance, the bond seeks to raise £1m for solar panels on public buildings by taking orders from local residents – with a minimum of £5. Private investors and residents outside West Berkshire are also invited to buy notes. Abundance plans to roll the model out across other local authorities in the UK saying it could raise up to £3bn for green projects. 

Galp Energia, the Portuguese Oil & Gas firm, announced this week that it had recorded a loss of €60m stemming from “unauthorised” carbon allowance transactions, according to Carbon Pulse.