Daily ESG Briefing: KfW office raided by police concerned about fiduciary duty

The latest developments in sustainable finance

Police have raided the headquarters of German development bank KfW due to a €100m loan its subsidiary made to Wirecard, the FT has reported. KfW Ipex Bank provided Wirecard with the unsecured loan two years ago and extended it last year; however, after Wirecard filed for bankruptcy protection in June, KfW sold the loan to a distressed-debt investor and took an undisclosed loss. There are questions about whether  the bank’s decision to provide and extend the loan may have been a breach of fiduciary duty, a spokesperson for the Frankfurt prosecutors’ office told the FT.

The Principles for Responsible Investment and UC Berkeley Law's Center for Law, Energy & the Environment have collaborated to provide Californian pension funds and policymakers with a roadmap for integrating climate change risk and other ESG considerations into their investment decisions. The California roadmap offers 40 recommendations in seven ESG categories, with a focus on climate change. Top recommendations include convening a state taskforce on ESG in investment and mandatory climate-risk stress testing for financial institutions.

Social and Sustainable Capital has acquired Leapfrog Bridge Finance, the financial arm of low-carbon investor Pure Leapfrog, to expand its community energy investment activity. The fund manager will continue to work with all LBF’s current and prospective clients and focus on growing its portfolio of social and sustainable renewable energy projects. The terms of the deal were not disclosed. 

ESG scores are not insightful when it comes to investment impacts, warns Tribe Impact Capital. Echoing similar comments from the OECD this week, Tribe pointed out the difference between ESG and impact, and said investors were being misled over the value of the former. 

Actiam, Aegon, NN IP and Robeco have led an investor statement by the IUCN NL and the Association of Investors for Sustainable Development calling for greater sustainability in the mining sector; specifically around improving water management with the underlying goal of preserving biodiversity. The statement, sent by 16 international institutional investors with over €900bn in assets under management, called on other parties in the financial sector to join the initiative and enter into discussions with mining companies to reduce their impact on water and biodiversity.

Commodity Future Trading Commissioner Rostin Behnam will today participate in a discussion on developments in ESG regulatory policy at ESG & Derivatives, an ISDA Virtual Conference. The event will be moderated by Steven Kennedy, Global Head of Public Policy, ISDA.

Research by Canada’s Institute for Sustainable Finance estimates that a 10-year investment of $128bn is necessary to set Canada on a carbon-competitive path. In ‘Capital Mobilization Plan for a Canadian Low Carbon Economy’ the research network provides a ‘capital blueprint’ for national transition, focused on four key sectors for public-private investment collaboration: buildings, transportation, electricity, and oil & gas.