Daily ESG Briefing: Hong Kong regulator takes on fund managers’ greenwash

The latest developments in sustainable finance

Hong Kong’s Securities and Futures Commission (SFC) has launched a consultation on proposed updates to its Fund Manager Code of Conduct; if implemented managers will be required to take climate-related risks into consideration in their investment and risk management processes, and make appropriate disclosures to meet investors’ growing demands for climate risk information and combat greenwashing. The deadline for comments is January 15 2021.

As You Sow will be conducting a webinar on November 18 on corporate activity on racial justice and workplace equity. The shareholder advocacy organisation will also highlight an online scorecard tool.

The Swiss National Bank has invested $5.9bn in companies that produce fossil fuels, according to the Swiss Climate Alliance. Members of the network, composed of civil society organisations, have criticised the bank’s approach and argue it is violating its own investment guidelines.

Corporate boards continue to be “plagued by seemingly intractable problems”. That’s one of the findings of PwC’s latest Annual Corporate Directors Survey. “Directors continue to report dissatisfaction with the performance of some of their peers,” it says.

Defined contribution plan asset managers suggest the US Department of Labor 's proposed ESG regulation represents a significant barrier to adoption by DC plans, according to Cerulli Associates’ latest analysis (released ahead of the DOL publishing the final rule last week).

Active engagement and stewardship have leapt in importance as a way for asset managers to drive sustainable change; whilst greenwashing has emerged as a new challenge, Schroders’ Institutional Investor Study 2020 has found. The asset manager’s study engaged with 650 institutional investors encompassing $25.9trn in assets.

Deutsche Bank and Primetals Technologies have reached agreement on the world’s first hedging concept that links currency options to sustainability goals; this development will enable the engineering and plant construction company to hedge its currency risk with FX options with the bank over a period of four years.

The Caisse des Dépôts Group has announced it is redoubling its climate commitments in the oil, gas, and thermal coal sectors which are key to the transition. Additionally, the French public sector financial institution expects companies in the industries to put in place robust strategies to manage environmental risks, including transition risk, and to define policies to guide the development of activities linked to non-conventional energy sources.

The 50 top investment banks provided more than $2.6trn of financing to sectors which governments and scientists agree are the primary drivers of biodiversity destruction in 2019, according to a report by Portfolio Earth, a new initiative led by finance, economics, and environmental experts. Their report is called Bankrolling Extinction.