Daily ESG Briefing: ECB board member warns central banks could face climate-related legal action

The latest developments in sustainable finance

Frank Elderson, executive board member of the European Central Bank, has warned central banks could face legal action for not acting on climate change. Speaking at the Green Swan conference this week, Elderson said that in recent years there had been a “steep increase” in climate-related and environmental litigation targeted at corporates and governments. He said: “The implications of these legal risks for the conduct of policy and for the stability of the financial system also need to be considered by central banks and supervisors.” In April, law firm Client Earth announced landmark legal action against the Belgian National Bank over “carbon bias” in its corporate asset purchases.

US Treasury Secretary Janet Yellen has called for standardised measurements for green investments. At a meeting of G20 member states to discuss infrastructure investment, Yellen said that “poor quality or availability of ESG data and lack of standardised ESG metrics are often cited as barriers to further deployment of sustainable finance”. She warned that unclear measurement could lead to greenwashing, and urged greater collaboration between governments and private sector initiatives. 

The Singapore Stock Exchange will consult on whether it should incorporate TCFD recommendations into its rules, placing greater emphasis on climate-related disclosures in reporting. In a speech at the ASIFMA ESG and Sustainable Finance Week, CEO Loh Boon Chye said that “by guiding the distillation of key information, we hope that challenges in sustainability reporting – namely, quantification, comparability and harmonisation – can be addressed”.

Blackrock, Vanguard and State Street collectively hold $46bn in investment in oil companies which operate in the Amazon rainforest such as ENAP and Petroamazonas, according to a report from Amazon Watch. According to the report, the lion’s share of these investments are Blackrock’s, which holds $1.5bn of investment in companies investigated by Amazon Watch for failures relating to indigenous rights and biodiversity, as well as $30.2bn of investment in oil companies which operate in the Amazon more generally. Vanguard holds $301.7m and $12.2bn in the two categories respectively, while State Street holds $19.5m and $3.25bn.