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Daily ESG Briefing: Impax sees record inflows

The latest developments in sustainable finance

Impax Asset Management saw £1.8bn of net inflows from clients in the six months to 31 March 2020 – its highest ever level. As of the end of April, assets under management were valued at £15.8bn, 4.6% higher than at 1 October 2019. The company has increased its interim dividend by 20%.

The European Central Bank (ECB) injected €7.6bn into fossil fuel corporate bonds between mid-March and mid-May this year, as part of its response to coronavirus, according to analysis conducted by Greenpeace. The bonds were purchased from seven companies associated with high pollution, including Shell and Total.

The Swedish government is preparing to issue its debut green bond. It has developed a framework that has been awarded the highest environmental grade by an independent reviewer and has created a possible expenditure portfolio that sets a hard cap of SEK30bn on the size of the bond. The next stage is for the Swedish National Debt Office to determine the exact size, tenor and timing of the bond issue.

The first ever syndicated multi-currency Shariah-compliant sustainability-linked loan has been launched by Axiata Group. The Malaysian telecommunications corporation’s loan is valued at $800m and is being coordinated by OCBC Al-Amin Bank, alongside Oversea-Chinese Banking Corporation, Labuan Branch, Maybank Islamic Bank and MUFG Bank Malaysia.

Client Earth has called on the UK government to include environmental conditions for companies seeking financial assistance in the fall-out from coronavirus. The environmental law charity has said companies have to make climate-related disclosures and align their businesses with the goals of the Paris Agreement. Client Earth also calls for other ESG components to be considered, including the prioritisation of workers’ interests and restrictions on executive pay and dividends.

Carbon Tracker has released a report calculating the size and vulnerability of different parts of the fossil fuel system, finding cheaper renewable technologies and government policies are the cause of driving peak demand and leading to lower profits and stranded assets. The report warns investors to increase discount rates, reduce expected prices, curtail terminal values and account for the clean-up costs; whilst policymakers must put in place an orderly wind-down of assets.