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Daily ESG Briefing: Minnesota pension funds to quit thermal coal

The latest developments in sustainable finance

Minnesota State Board of Investments will divest its public pension funds from companies that make more than 25% of their revenue from thermal coal mining. Relevant companies must be identified by the end of August, and holdings sold "in a prudent and expeditious manner, but no later than December 31, 2020," according to a resolution. As of March, $4bn was invested by Minnesota's public employee pension funds into fossil fuels. Campaigners say the next step is to evaluate the climate-related financial risks of all oil & gas companies in its portfolio.

Christine Lagarde, President of the European Central Bank (ECB), has said it needs to pay particular attention to climate change and biodiversity, in an interview with France2tv. Lagarde said the ECB will very likely use climate change as a parameter in asset purchases, work on climate stress tests for banks and re-examine whether collateral is correctly valued, taking climate risk into account.  

The Monetary Authority of Singapore will soon call a consultation over new governance, risk management, and disclosure standards for the financial sector to enhance its resilience to environmental risks, according to a recent speech by Deputy Managing Director Jacqueline Loh. The supervisor will also introduce a green and sustainability loan grant scheme to defray the costs of green issuances and loans.

More than a quarter of clients are currently considering, or are already engaged in, ESG and sustainable investing, according to a report from deVere Group. The financial advisory house says that since the start of May, “26% of clients around the world are eyeing exposure to or are now part of the environmental, social and governance (ESG) megatrend”. It attributes the rise to Covid-19, which it says “has shifted the values of our society”.

European sustainable finance labels took a leap forward in Q1, with more than a hundred additional labelled bond funds, according to French specialists Novethic. That brings the total to 935, with a value of €326bn. The update concluded the French SRI Label and the Belgian standard Towards Sustainability have the most, with more than 300 labels each. The research found a growing trend for double or triple labelling, with around fifty additional funds choosing this option. Additionally, already three label promoters have begun to integrate the upcoming EU taxonomy.