Daily ESG Briefing: JPMorgan to acquire impact specialist

The latest developments in sustainable finance

JP Morgan Chase is set to acquire San Francisco-based impact investment specialist OpenInvest. The terms of the deal, which is expected to close in the third quarter, were not disclosed. OpenInvest will retain its own brand and be integrated into JP Morgan’s Private Bank and Wealth Management client offerings.

Global equity valuations could fall by as much as 20% if companies are suddenly hit with a $75 per tonne price on carbon, according to new analysis by Dutch wealth manager Van Lanschot Kempen, which suggests that investors are failing to account for climate risks in equity pricing. The 20% figure is based on companies’ direct and indirect emissions being counted – but if applied to direct emissions (not including Scope 3) alone markets would fall by around 4%, it was found.

Insurance industry group ClimateWise, which includes Aviva, Lloyds and Zurich, has called for better collaboration in the insurance industry in order to accelerate the path to net zero. In a new white paper, Climate Wise sets out nine priority areas for the industry, including supporting the sustainable decommissioning of carbon intensive assets, and developing solutions for increasing climate-related legal liabilities and environmental litigation. 

Ireland’s sovereign wealth fund has ditched €6m in shares it held in companies which manufacture or test nuclear weapons after tightening its exclusion rules. The €5.4bn fund, which divested from fossil fuels in 2018 and also excludes manufacturers of cluster munitions and anti-personnel mines, said that it held the shares through passive index funds rather than as direct investments.

The Pensions and Lifetime Savings Association has launched a consultation on its proposed Responsible Investment Quality Mark (RIQM) for pension schemes. The mark is intended to recognise UK schemes which achieve the highest standards for incorporating ESG factors into their operations, and an RIQM Plus accreditation will be available for industry leaders. The PLSA says that the assessment approach will allow for the size and resources of a scheme to be taken into account so the mark will be available to schemes regardless of size.

Ten times as many UK financial institutions’ portfolios are misaligned with the Paris Climate Accord as are aligned, according to a new interactive tool developed by think tank Climate Policy Initiative. The Net Zero Finance Tracker monitors the climate change response of more than 1200 UK based institutions, representing more than $25trn in assets. The think tank found that despite the proliferation of climate commitments financial flows have yet to significantly shift away from carbon intensive investments and towards green ones.

The world requires 1.2gt of negative emissions annually by 2025 in order to meet the targets of the Paris agreement, according to a new study by the Coalition for Negative Emissions. According to the newly-formed Coalition, whose members include Bank of America, Drax and the International Airlines Group, the current pipeline for negative emissions solutions will miss this target by 80%, and thirty times the current investment in negative emissions technologies is needed to meet a 1.5C trajectory. 

Multilateral development banks (MDBs) committed $66bn to climate finance in 2020, 58% of which went to low and middle income economies, according to the European Bank for Reconstruction and Development. Of the sum, which was $4.4bn larger than in 2019, three quarters went to reducing GHG emissions and slowing global warming while the remainder was spent on mitigating the impacts of global warming, mostly in emerging markets.