Daily ESG Briefing: KPMG launches ‘climate accounting infrastructure’

The latest developments in sustainable finance

KPMG has announced a new patent-pending blockchain-based capability, Climate Accounting Infrastructure (CAI), which is intended to help organisations more accurately measure, mitigate, report and offset greenhouse gas emissions. CAI will integrate an organisation's existing systems with external data sources to establish a verifiable trail of emissions and offsets recorded on blockchain, according to a statement. It will also use real-time environmental data and analytics to model the impact of climate risks on business operations and financial performance.

HSBC has committed to “align its financed emissions – the carbon emissions of its portfolio of customers – to the Paris Agreement goal to achieve net zero by 2050 or sooner”. As part of the pledge, the firm has said it will provide support to clients on transitioning to low-carbon and work more closely with the industry, regulators and governments. It has also said that, along with the recent launch of its natural capital manager Pollination Climate Asset Management, it will set up a $100m venture debt fund for cleantech innovations and donate $100m to bringing new solutions to scale. NGOs including ShareAction and Market Forces welcomed the announcement, but said it was inadequate because of the absence of “immediate exclusions of coal, oil and gas companies, and those most responsible for deforestation”.

UK pensions minister Guy Opperman has said that asset managers “have been lagging behind” on ESG and climate change despite efforts by the government. The remarks were made in a debate over a landmark bill which will make the UK the first jurisdiction to legally require major pension schemes to report and address climate risks once passed. Environmental legal charity Client Earth said it provided input to the draft legislation last month. Opperman said in earlier remarks that he expected the bill to enter into force by the end of the year.

The European Insurance and Occupational Pensions Authority (EIOPA) has proposed that insurers incorporate climate change risk scenarios within their long term solvency assessments in the next two years. Insurers which conclude that climate change “is not a material risk” will be expected to justify their reasoning, EIOPA said. Stakeholders can provide feedback to the proposals here.

Sustainability rating firm Standard Ethics has released a new category of rating dedicated for conventional bonds, claiming that “all debt must be sustainable”. The London-based agency has published an initial rating benchmark of 60 ‘general purpose’ corporate bonds with a maturity of at least 10 years, and an outstanding amount equal to or greater than $2bn.

The Association of British Insurers and 32 of its members have become the first in the industry to sign up to UK Business in the Community’s Race at Work Charter, committing to improving opportunities for Black, Asian and minority ethnic colleagues. Signatories to the charter commit to: Appoint an Executive Sponsor for race; Capture data and publice progress; Ensure zero tolerance of harassment and bullying; Make equality in the workplace the responsibility of all leaders and managers; and take action that supports ethnic minority career progression. Alongside signing up to the Charter, the ABI has launched a new internal inclusion strategy and set new targets for gender diversity within the organisation.