Daily ESG Briefing: Moody’s specialists assess corporate progress on TCFD

The latest developments in sustainable finance

Vigeo Eiris and Four Twenty Seven have partnered on a TCFD Climate Strategy Assessment, looking at how companies are integrating climate risk considerations into their governance, strategy and risk management processes. The report, which provides aggregated scores and ‘indicator level’ information, finds that most companies still lag on disclosures. The pair, which are both owned by Moody’s, have also examined how companies’ are working on physical risk. 

More than a third of asset managers surveyed by Redington’s Manager Research Team were unable to provide an example of a climate change-related engagement; while less than two thirds have an ESG engagement policy in place. The consultancy firm asked more than 100 managers globally, representing over $10trn, about their attitudes and approaches to climate risks. The report also found that despite three quarters of managers saying they consider climate, just 60% can provide an example of when these factors have actually influenced buying or selling decisions.

Only 40% of the investment industry incorporates climate change into investment decisions, according to a survey from the CFA Institute. The low figures come despite the survey’s findings that 75% of global C-level executives believe that climate change is an important issue. The association of investment professionals’ report, Climate Change Analysis in the Investment Process: 2020, made key recommendations to push the sector forward, including a price on carbon, increased transparency on climate metrics, and education within the profession.

Sompo has become the first Japanese insurance company to adopt a position on coal, saying it will "not insure and invest in new construction of coal-fired power plant in Japan, except for projects for which underwriting, investment and financing has already been expressed". However, civil society groups in the country have said the pledge isn’t strong enough and offers loopholes because it is limited to Japanese projects. 

The Swedish central bank has said it will measure the sustainability of corporate bonds bought through its QE programme. It also said that, as data becomes available, it will measure and report on the greenhouse gas emissions of the portfolio it creates via the programme.  

Private bank Brown Brothers Harriman has become the latest organisation to join the Principles for Responsible Investment. It also announced that it has signed up to the UN Global Compact as part of efforts to step up its collaborative work on ESG and sustainability. 

The UK should introduce more consistent carbon pricing across electricity, heating, aviation, shipping, industry, waste and agriculture, according to a white paper by the Zero Carbon Campaign called ‘How carbon pricing can Help Britain achieve Net Zero by 2050’.  The paper was led by the campaign’s commission, which includes Dr Rhian Mari Thomas (CEO, Green Finance Institute), and has been endorsed by Ian Parry (Principal Environment Fiscal Policy Expert, International Monetary Fund), Mike Barry (Trustee for Better Business), and Lord Nicholas Stern (Chair, Grantham Research Institute, London School of Economics).