Daily ESG Briefing: Mercer, Willis Towers Watson and 10 more set up Consultants Sustainability Working Group

The latest developments in sustainable finance

12 firms, including Mercer, Aon, Willis Towers Watson and Redington, have launched the Investment Consultants Sustainability Working Group in the UK. Other members include Barnett Waddingham, Cambridge Associates, Cardano, Hymans Robertson, ISIO, LCP, MJ Hudson Allenbridge and SEI. The new body says it will work together on engagement with asset owners, asset managers and regulators; genuine sustainable investment outcomes beyond box-ticking; alignment with existing initiatives; and creating good practices principles for the industry. 

Nestle and Cargill have asked for child slavery cases against them to be thrown out of court, claiming corporations cannot be held liable for child slavery in their supply chains. Last week, the food giants submitted briefs to the US Supreme Court arguing they have immunity from responsibility for human rights abuses alleged by former child slave labourers on cocoa farms on the Ivory Coast of Africa, according to NGO Earthrights. It’s the latest twist in cases brought against Nestle and Cargill in 2005, when anonymous plaintiffs alleged they were trafficked to Mali where they were forced to work as slaves on plantations that supply cocoa to the agriculture giants, enduring torture and work without pay. 

The City of London and Macquarie Green Investment Group have published a roadmap for using sustainable finance to fund Indonesia's waste infrastructure, which they said represents a £19bn investment opportunity over the next 20 years. Drawing on interviews with development banks, international infrastructure investors and government bodies, the report recommended the creation of a Waste Management Development Fund to support municipalities in developing waste infrastructure, and for development finance body UK Export Finance to explore how to support UK investment in the area. 

The European Central Bank (ECB)’s current quantitative easing programme risks fueling fossil gas expansion, Reclaim Finance has warned, pointing out that the asset purchases made under the emergency programme, which seeks to enable an economic recovery from Covid-19, support 11 companies planning 62 gas infrastructure projects. In May, the NGO warned the bond-buying programme supported 38 fossil fuel companies – including 10 coal companies. In response to criticism, the ECB said it would consider integrating environmental and ethical criteria into asset purchases, but the review process is expected to end mid-2021 at the earliest. In 2020-2021, it plans on buying up €1,470bn worth of assets – more than 50% of its holdings as of June 2020.

Sasol’s climate plans are not aligned with the Paris Agreement, according to shareholder activism organisation Just Share. Analysis of the South African energy giant’s second TCFD disclosure, shows that its 2030 target – to reduce emissions from its South African operations by at least 10% – is reliant on natural gas. Sasol’s refusal to accept shareholder resolutions on climate “undermines its commitment to play a leadership role in South Africa’s energy transition”, Just Share added. The full briefing note can be accessed here

Planet Tracker has published a new blog describing a “broken supply chain” in the seafood industry, which it says looks set to shrink in 2020. Seafood is the most traded food commodity in the world and trade saw an annual growth rate of 4% between 1976 and 2018, but supply chains have been “dramatically” hit by the Covid-19 pandemic, says the blog. It also looks at falling demand and price declines for commodities including salmon, shrimp, crab, lobster and catfish, which has the industry set to send vast quantities of edible seafood to landfill. “An opportunity exists to use this ‘unwanted’ fish protein for aquaculture feed, but logistics appear to be frustrating even this option,” it said.