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Daily ESG Briefing: Green bonds break $1trn mark

The latest developments in sustainable finance

Green bond issuance smashed through the $1trn mark last quarter, according to figures from BloombergNEF. More than $200bn of labelled notes have been issued in 2020 so far – a 12% increase compared with the first nine months of 2019. Despite a sleepier first half of the year in light of the COVID crisis, September saw $50bn in deals, pushing the levels beyond last year’s. Sustainable debt instruments more broadly, including green loans, sustainability-linked debt, social bonds, now stand at more than $2trn. 

Allianz SE, AXA Investment Managers, Candriam Investors Group, Legal & General Investment Management, Robeco and State Street Global Advisors are among 36 investors to be named ‘leaders’ by the Principles for Responsible Investment this week. The ‘leaders group’ contains 16 asset owners and 20 investment managers – the lion’s share (23) coming from Europe, with eight from Oceania and five from North America. Members have been selected for demonstrating a "breadth of responsible investment excellence," particularly in this year's theme of climate reporting.

Moody's has upgraded mining company Vale from Ba1 to Baa3 because of improvements in its ESG practices. The firm has enhanced its risk management and governance oversight, supported reparation of communities and areas affected by the tailings dam accident in Brumadinho last year, and materially reduced the risk of a similar accident in the future, Moody’s said. Vale also changed its remuneration policy to include ESG targets as an important component of annual compensation.

Mark Lewis, BNP Paribas Asset Management’s Chief Sustainability Strategist has said that there is no plausible pathway to net zero by 2050 without the scaling-up of green hydrogen. In, ‘Deep Decarbonisation: Green Hydrogen, Net Zero and the Future of the EU-ETS’, he argues the technology must be made commercially viable as an industrial feedstock by 2030 and as an energy source thereafter. 

Dutch pension fund ABP is under pressure from some of its beneficiaries to divest fossil fuels. Teachers staged protests outside the Amsterdam office of the scheme, which represents government and educational workers’ and is estimated to have €17.4bn invested in fossil fuel corporations. 

Argo Group and Allied World are the latest in the growing number of insurers and reinsurers to rule out providing services to the controversial Adani Carmichael thermal coal mine in central Queensland, Australia.