Daily ESG Briefing: Glencore to review lobbying links after pressure from CA100+

The latest developments in sustainable finance

Glencore is to review its links with trade associations to identify lobbying activities that could undermine the miner’s support for the Paris Agreement – one of a raft of climate-related pledges made, it said, off the back of engagement with Climate Action 100+. The company did not specify Scope 3 emissions or intensity reduction targets, but said it would start disclosing “the intensity reduction of Scope 3 emissions, including mitigation efforts” in 2020. It said the intensity of Scope 3 emissions is expected to decrease “as Glencore rebalances its portfolio towards commodities that support the transition to a low-carbon economy”. The firm said it would report annually on the extent to which, “in the Board’s opinion”, the company’s capital expenditure and investments were aligned with Paris, and that it would “give consideration to” how climate change objectives could be reflected in executive management schemes.

The Asia Investor Group on Climate Change (AIGCC) has urged Japan to ratchet up its Nationally Determined Contributions (NDCs) in the run up to COP26, in a letter sent on behalf of six international investor organisations. Co-signed by the Institutional Investors Group on Climate Change (IIGCC), the Principles for Responsible Investment (PRI), Ceres, CDP, and the Investor Group on Climate Change (IGCC), the letter asked Japanese Prime Minister Shinzo Abe to increase the ambition of Japan’s current targets – which are to reduce emissions by 26% by 2030 and reach net-zero emissions “as early as possible during the second half of the 21st century”. The letter also asks for more clarity on short-term targets, as well as guidance on the transition to net-zero emissions by 2050 to “send a strong and positive signal to investors”. The investors invited further engagement with the Japanese government to discuss the demands.

Companies should monitor coronavirus developments to ensure they are providing up-to-date disclosures to shareholders in year-end reports, the UK’s Financial Reporting Council (FRC) has said in new guidance. UK law requires companies to disclose principal risks to their business. The guidance is particularly relevant for companies either operating in or having close trading associations with China, the FRC said, adding that required disclosures would likely change over time, depending on the spread of the virus. The regulator is also discussing with audit firms to assess potentially impact to their audits of UK listed groups with Chinese subsidiaries.

S&P Global Market Intelligence has integrated Trucost’s ESG data into its portfolio analysis and quantitative research tools, including climate data on 15,000 companies which can be used to assess the carbon footprint of a portfolio, identify high carbon-related risk investments and develop portfolio construction. The data was used in a recent report that found carbon-sensitive portfolios have similar returns and significantly better climate characteristics than portfolios constructed without carbon emission considerations.

Nearly half (43%) of Nordic institutional investors allocate to impact strategies, according to an NN Investment Partners survey, while an additional 22% plan to do so in the near future.

The survey, conducted by consultancy Kirstein A/S, found that nine in every 10 Nordic investors are interested in impact investing. Investing to support the environment came out on top of the list of priorities for investors, with 97% describing it as “very important”, compared to 81% and 73% who cite governance and social factors, respectively. In terms of SDGs, Goal 13 (Climate Action) was the single most important SDG for all investors by a significant margin. Click here for a report detailing the full survey.