Daily ESG Briefing: Less than half of European investors understand SFDR, says survey

The latest developments in sustainable finance

Less than half of European asset owners and managers understand the EU’s Sustainable Finance Disclosure Regulation and what it means for their organisation, according to BNP Paribas’ annual survey of investor attitudes to ESG. The bank said that this low level of understanding reflected the fact that institutional investors are awaiting details of the final requirements, which are still under development. In other findings, 59% of investors said that data remained the primary barrier to ESG integration, with conflicting ESG ratings and challenges around quality and consistency among the most common reasons given. However, the number of investors who said that ineffective data for scenario analysis was an issue has fallen from 22% in 2019 to 7%.

The Children’s Investment Fund’s founder Sir Chris Hohn has called on asset owners to sack managers failing on climate change. In his keynote address at the Climate Bonds Initiative’s annual conference last week, he said: "Asset owners should fire asset managers who fail to take into account and engage on climate risks". He also added that “most asset managers are passive and ineffective and [are] not protecting their investors”.

A BBC Panorama investigation has reportedly found evidence that British American Tobacco (BAT) paid a six-figure bribe to former Zimbabwean leader Robert Mugabe. Documents uncovered allegedly reveal evidence that BAT also paid bribes in South Africa and used illegal surveillance to gain competitive advantages over rivals. Earlier this year, RI reported that BAT was ranked in the ‘Top 5’ ESG performers among constituents of the FTSE100 by Refinitiv. 

A spokesperson for BAT stated on its website that it "emphatically" rejects "the mischaracterisation of our conduct by some media outlets."  

More than £1trn (€1.2trn) held by UK institutional investors is exposed to “significant” climate risks, according to research by UK-based consultant Lane Clark & Peacock. Its report The Tip of the Iceberg, which assessed more than 300 investors, found that 50% “have significant climate risks in their portfolios”. It also revealed that just one in 10 asset owners have portfolios with low levels of climate risk.

Hong Kong-based advisor Vistra has announced plans to buy Australian accounting firm and corporate governance specialist Leydin Freyer – a deal that will double the size of its operations in Australia. Details of the proposed acquisition were not disclosed but it was announced that Leydin Freyer will be rebranded to Vistra upon completion. 

Envestnet, a provider of software and services for the wealth management industry, has introduced a new investment screen for the prison industry, based on data from non-profit Worth Rises.