Daily ESG Briefing: Key Aussie investors back new climate initiative

The Investor Group on Climate Change has launched a 10-year initiative in Australia with backing from 16 institutional investors. Climate League 2030 will see participants commit to one new climate pledge each year, covering: 1) Adopting Paris-aligned targets 2) Collaborating to delivering emissions reductions 3) Investing in technologies and companies that will reduce Australia’s emissions. The initial group of investors, which together manage more than A$850bn, include AustralianSuper, HESTA, CBUS, Aware Super, IFM Investors, the Queensland Investment Corporation, Aberdeen Standard Investments, Australian Ethical, Impact Investment Group, Lendlease Funds Management, Local Government Super, New Forests, Pendal Group, Pollination, UniSuper and the Victorian Funds Management Corporation. “Climate League 2030 will also be progressively opened to insurers, banks and companies,” IGCC said in a statement. 

The head of the International Monetary Fund (IMF), Kristalina Georgieva, has called for carbon pricing to be “at the heart” of countries' climate change strategies. Addressing the Coalition of Finance Ministers for Climate Action earlier this week, she also called upon the biggest emitters to “adopt a carbon price floor”, as she fears that without it the “current Paris framework is not going to deliver the needed reduction of emissions by 25-50 percent in the next 10 years”.

It comes as the IMF publishes its latest world economic outlook in which it states that attaining net-zero emissions by 2050 is still possible, but the window to do so is vanishing “rapidly”. The Washington-based body recommends that the best mechanism to achieve net-zero and protect economies in the long-term is through green stimulus packages and steadily rising carbon prices. 

The Monetary Authority of Singapore is backing a new partnership between the  UK’s Imperial College Business School and Singapore Management University which aims to build "a new ecosystem for sustainable investing in Asia" in addition to redirecting investment capital toward climate change solutions. The joint initiative, named the Singapore Green Finance Centre, is also supported by Schroders', BNP Paribas Asset Management, HSBC, Goldman Sachs and the Bank of China.

For 63% of respondents to a recent Morgan Stanley poll, the primary driver for offering SRI/ESG products was better investment returns, with just 5% attributing it to a belief in ethical companies. According to the 600 participants in How are Investors Approaching Sustainable Investing?, climate and carbon are the most important ESG themes and ESG integration is the most common approach investors take, followed by thematic allocations, impact investing, best-in-class, engagement and voting, and finally exclusions.

Banks in Indonesia need additional support to fall in line with global standards on ESG reporting, according to ESG research house Bumi Global Karbon. Just 24% of the ESG parameters used by the 15 banks that have submitted sustainability reports to the country’s Financial Services Authority, Otoritas Jasa Keuangan, are in line with global expectations, the research found. The submissions were made as part of the first phase in a new policy which requires all financial institutions and listed companies in Indonesia to file ESG reports annually by the end of 2025. Bumi Global Karbon believes the regulator needs to offer more technical guidance on data collection and reporting framework to improve the quality of ESG data, as well as provide incentives to encourage better reporting and performance.  

Paris Jordan, Head of Consulting at Murano Consulting, and Sophia Sednaoui, Business Development at Carmignac have co-launched Virtuvest, an ethical investing network for asset allocators, financial advisers and individuals to debate and learn about ESG issues and ethical investing.

Ethnic minorities only made up 6.7% of partner roles at the UK’s largest accountancy firms and none with under 200 employees reported that they had any BAME managers, according to data collected by the Financial Reporting Council. A new report from the UK regulator warned that the sector needs to increase diversity across gender and disability, as well as ethnicity, at the most senior levels of management. Women make up 56% of manager roles at smaller firms, but less than 20% at larger peers. 

MSCI’s ESG Ratings will now be available on Bloomberg Terminals. “With the shifting regulatory landscape and the demand for long-term sustainable returns, investors need the full picture of ESG data available to make informed decisions,” said Patricia Torres, Global Head of Sustainable Finance Solutions at Bloomberg. “That is why Bloomberg is expanding our ESG data coverage to include third-party data from providers like MSCI.