Daily ESG Briefing: MSCI opens up funds and index data

The latest developments in sustainable finance

MSCI has launched two open-source search tools for its ESG data, in addition to the one it released last year. The data titan will now allow the public to access 36,000 ESG ratings for funds, and ESG metrics for hundreds-of-thousands of MSCI equity and blended indices. It will extend the indices search tool to cover fixed income in coming weeks. In November, MSCI opened up its ESG ratings for nearly 3,000 companies. Exploring the data will be free, but investors seeking to use it to make investment decisions will still require a license. MSCI described the latest move as “part of a wider transparency initiative to provide consistent and comparable ESG metrics”.

The UN has released a stocktake of advancement on the Sustainable Development Goals, revealing an uneven level of progress so far. The assessment, published by the UN Economics and Social Council, says that up to the end of last year, “global poverty continued to decline, albeit at a slower pace; maternal and child mortality rates were reduced; more people gained access to electricity; and countries were developing national policies to support sustainable development and signing international environmental protection agreements”. “In other areas, however, progress had either stalled or been reversed: the number of people suffering from hunger was on the rise; climate change was occurring much faster than anticipated; and inequality continued to increase within and among countries.”

Polish companies Enea and Energa have announced a total write-down of a controversial new coal-fired power project following a legal campaign by Client Earth, in a move that has wiped around PLN0.5bn off each company’s profits. The announcement that the Ostrolęka C plant would now only be viable as a gas plant and would be suspended mid-construction, rendered the project a “stranded asset” according to Client Earth. Last year, Enea lost a legal case brought by the climate-focused law firm, which bought shares in the company and then challenged the “indefensible” financial risks of the investment in view of rising EU carbon prices, the plummeting cost of renewables and a flight of global capital away from coal.

The Investor Alliance for Human Rights has published a new Investor Toolkit on Human Rights for asset owners and managers to address risks to people posed by their investments. In the context of the COVID-19 crisis, the toolkit offers practical guidance on how institutional investors can positively contribute to moving human rights up the agenda, including how to apply the UN Guiding Principles. 

The Foundation for a Smoke-Free World (FSFW), which claims to be an independent, non-profit organisation “committed to reducing deaths and diseases caused by smoking”, remains solely funded by Philip Morris International (PMI), according to the campaign group Stop Tobacco Organisations and Products (STOP). PMI’s annual tax return reveals it has failed to secure other funders, despite saying it would do so more than two years ago. Almost a third of the foundation’s $80m budget in 2019 was spent on salaries, PR, legal and other fees as opposed to funding scientific research, STOP alleges. 

Pension giant the California State Teachers’ Retirement System (CalSTRS) has lost over $1.63bn since July 2019 from investments in fossil fuel companies, according to Fossil Free California. CalSTRS board has pushed back against high profile calls for fossil fuel divestment over recent years and, as of June 30 2019, had invested more than $6bn in fossil fuel companies including $2.2bn in 22 fracking and tar sands majors. 

Invesco has published its third annual Global Fixed Income Study, revealing that investors are increasingly allocating to country-specific emerging market strategies and leveraging ESG factors to mitigate risk in volatile markets. According to the firm’s report, 72% of investors now have an allocation to emerging market debt, compared to 49% recorded in its previous study, and most respondents (54%) believe ESG analysis can unlock “hidden value” in such portfolios.