Daily ESG Briefing: Investors continue to divest over climate

The latest developments in sustainable finance

Divestment continues to gain momentum, with Aviva Investors writing to 30 of the world’s biggest oil, gas, mining and utilities companies last week warning that it will exit their stocks if they don’t step up on climate. The news comes as Bloomberg reported on Friday that Norway’s sovereign wealth fund has divested its entire portfolio of oil exploration and production companies, worth around $6bn. The fund still holds shares in integrated oil companies – its seventh largest equity investment last year was in Shell. Meanwhile, Dutch pension investor APG dumped its stake in Korea Electric Power Corporation because of its plans to build new coal-fired power plants in Indonesia and Vietnam.

NGOs are accusing 10 scandinavian banks including Nordea and DNB of pumping $67bn into the fossil fuel industry since the Paris Climate Agreement was signed. As signatories to the Principles for Responsible Banking, the banks have committed to net-zero by 2050, but in June 2020 still held $7.1bn shares in fossil fuel companies, according to the report.

Macquarie’s Green Investment Group (GIG) has launched a new solar energy company. The company, named Cero Generation, will consolidate GIG’s existing and future solar projects in Europe. Its current 8GW portfolio is spread across 150 projects in seven countries.

The Chair of the European Securities and Markets Authority has written to Mairead McGuiness, the EU Commissioner in charge of Financial services, financial stability and Capital Markets Union, calling for greater regulation of ESG ratings and assessment tools. In the letter, Steven Maijoor called for a common legal definition for ESG ratings as well as for ratings issuers to be subject to regulation.

European energy giant Iberdrola will ensure that 70% of its 1,000 key suppliers are compliant with its ESG criteria by 2022, it has said. Suppliers will be required to submit a self-assessment to the company, and those with a low score will be required to take action to meet the requirements or risk being excluded from future tenders. 

UK master trust Smart Pension has pledged to halve its scheme emissions by 2030, with a goal to reach net zero well before the 2050 deadline. The trust will make allocations to a new ‘Social Impact Fund’, which will invest in companies tackling climate change.