Daily ESG Briefing: Investors help lay down the law on transition finance with new handbook

Issuers should have science-based, publicly available climate transition strategies and targets if they want to sell bonds aligned with the Green and Social Bond Principles or the Sustainability-Linked Bond Principles, according to a new report from the organisations’ Executive Committee. In a much-anticipated move, the Climate Transition Finance Working Group, which is made up of representatives from more than 80 entities participating in the capital markets, has issued a Climate Transition Finance Handbook, laying down expectations for credible green and social issuance.

Macquarie Asset Management has pledged to achieve Net Zero portfolios by 2040. In a letter to investors, Martin Stanley, Head of Macquarie Asset Management, explained that in alternative investment portfolios where the asset manager exercises control or significant influence over the underlying investments, its goal is to have Paris-aligned/net zero business plans in place by the end of 2022; while, in its managed portfolios of public securities and alternative investments, where it does not have significant influence, it will “support the goals of the Paris Agreement in a manner consistent with its client-guided fiduciary and regulatory responsibilities”. 

The Church Commissioners for England has joined CalSTRS in throwing its weight behind efforts by a new activist investment firm to take on ExxonMobil. Engine No.1 is proposing a slew of new independent board members at the oil giant, which has been accused of being dismissive of climate change issues, to help it better address the energy transition. Bess Joffe, Head of Responsible Investment for the Church Commissioners for England, said: “Calls for the company to address shareholders’ concerns about strategy, governance, and climate mitigation in order to stop the destruction of shareholder value have gone unheeded…  We support the proposed alternate slate of directors and believe they will provide more relevant experience in energy, technology and transformation to drive the necessary changes at the company.”

ABN AMRO, Federated Hermes, Lombard Odier, SCOR SE, Rathbone Greenbank Investments and Swedbank Robur are among 11 new financial institutions to have signed the Finance for Biodiversity Pledge. The pledge, launched in September, now boasts 37 members, representing €4.8trn in assets under management. Members commit to protecting and restoring biodiversity through their investments and political advocacy.

Starting next year, the Dutch central bank DNB will make climate-related and environmental risks part of its fit and proper assessments for board members of banks, insurers and pension funds. The regulator said the changes could involve it asking a proposed management or supervisory board member about their knowledge in the area of climate-related and environmental risks, relevant legislation and its impact on the institution. Organisations will also be expected to provide information of board candidate’s knowledge and experience in the area. 

Mirova has altered its Articles of Association to become an accredited ‘Mission-led Company’ under the France's Pacte Law. In doing so, the sustainability-focused investment manager and affiliate of Natixis, will commit to preserving and restoring ecosystems and the climate, supporting social inclusion, health, and well-being – beyond profit. Mirova has created a Mission Committee to help it achieve its mission. Members include Monique Barbut, ex- Secretary General of the UN Convention to Combat Desertification and board member of WWF France; Fella Imalhayene, Managing Director of Global Compact France; Stéphanie Pfeifer, Executive Director of the Institutional Investors Group on Climate Change; and Jean Raby, CEO of Natixis Investment Managers. Mirova has also registered as a B Corp after receiving an “excellent” evaluation score under framework.