Daily ESG Briefing: Investors call out Barclays on fossil fuel funding

The latest developments in sustainable finance

A $4.3tn investor coalition including Amundi and Nest has written to Barclays asking it to tighten its policies on financing coal and oil sands. Barclays policy currently prohibits financing for coal projects, but allows continued financing for coal companies and companies developing new coal mines and power plants. It has no restrictions on oil sands financing. The signatories, co-ordinated by ShareAction, highlighted Barclays’ net-zero goal but said they “remain concerned” about its exposure to fossil fuel. From 2019-2020, Barclays increased its financing of the world’s largest oil sands companies by 49%, and a report by Global Coal Exit List identified the bank as the fifth largest lender to the coal industry. 

Sustainability advisory firm ERM has acquired Sustainalise, its fifth acquisition since 2018. The Dutch consultancy, which advises firms on ESG disclosure and impact measurement, as well as strategy development, was founded in 2010. Co-founders Justus Koek and Nick de Ruiter will join ERM as partners.

Fashion retailer Boohoo has said it is looking into aligning executive remuneration to “ESG improvements”. In a letter to the UK’s Environmental Audit Committee, Chairman Mahmud Kamani confirmed that the retailer was looking into the suggestion, which was made at a virtual evidence session in December. In 2019, an inquiry by the EAC found Boohoo to be one of the UK fashion retailers “least engaged with ethical or sustainability concerns”, and in 2020 investigations by the Guardian revealed significant issues surrounding supply chain working conditions.

Revised criteria for buildings acquisition and ownership in the EU taxonomy will significantly increase the number of entities which can access green finance, according to a report by Moody’s. The proposed tightening of the criteria for energy efficiency in November 2020 raised concerns that the growth of the green bond market could be significantly slowed, as energy efficiency is the largest category for European issuance.

ICMA has published research on the opportunities and potential risks involved with integrating sustainable finance objectives in repo and collateral markets. The paper specifically addresses three case studies focusing on green collateral, use of proceeds and counterparty assessments. Stakeholders are invited to submit feedback on the document by May 28.