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Daily ESG Briefing: NBIM’s divestments since 2012 have generated ‘relative returns over the period’

The latest developments in sustainable finance

Norges Bank Investment Management (NBIM), the manager of Norway’s $1trn sovereign wealth fund, divested more than 300 companies between 2012 and 2020. “This generated 41 basis points in relative returns over the period, cumulatively,” Christopher Wright, NBIM’s Head of ESG Risk Monitoring, said on LinkedIn. “We consider divestment as an option to address unacceptable ESG risk only if engaging a company has failed, or is unlikely to be effective or suitable. We believe they mitigate long-term financial risk in the fund,” he added. It follows an announcement earlier this week in which the fund revealed that its sustainability screening of 442 companies added to its equity index this year has resulted in the fund giant selling out of 43, refraining from investing in nine, and flagging a further 63 for further engagement. NBIM said that most of the companies flagged in the process are “small, and many are recently listed on the stock exchange”.  

Investors including Aviva and Macquarie have announced their support for a new initiative launched today by the G7 countries to promote a sustainable and resilient food system. The initiative has so far seen 22 companies pledge improvement as measured by the World Benchmarking Alliance’s Food and Agriculture Benchmark, which assesses companies on their environmental, nutritional and social impact in alignment with the Sustainable Development Goals (SDGs).

Swiss sustainability specialist Ethos has added stricter sustainability and diversity expectations to its 2022 proxy voting guidelines. The new guidelines include a precise definition of what’s required to approve a sustainability strategy or climate-alignment report, and confirms plans by Ethos to vote against the re-election of the nomination committee’s chairperson – or the chairperson of the board of directors if such a committee does not exist – if the board of directors of the company does not include at least 20% women.  

European supermarkets including  Lidl Netherlands, Carrefour Belgium and Sainsbury’s UK have stopped selling Brazilian beef over alleged deforestation linked to meat giant JBS, following an investigation by Repórter Brasil and Mighty Earth. JBS, the world’s largest producer of beef, said it had “no tolerance for illegal deforestation”.   

A  group of marine insurers has  launched an initiative to provide transparency on carbon emissions and support a green transition in the shipping industry. The signatories of The Poseidon Principles for Marina Insurance framework commit to assessing and disclosing the climate alignments of their hull and machinery portfolios, and to benchmarking them against two trajectories: one linked to a 50% reduction of annual CO2 emissions by 2050 compared to 2008 – in line with the International Maritime Organization’s Initial GHG Strategy; and one linked to a 100% reduction of emissions by 2050. A third trajectory will be introduced to align the full decarbonisation trajectory needed to meet the ambition of the Net Zero ambition of the Net Zero Insurance Alliance.