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Daily ESG Briefing: Nest and UBS divest ‘unresponsive’ energy companies  

The latest developments in sustainable finance

UBS Asset Management has dropped five energy companies from its suite of Climate Aware funds, including the one it manages for UK pension giant Nest. It attributed its decision to sell its shares in Exxon Mobil, Imperial Oil, Kepco, Marathon Oil and Power Assets to a lack of progress in managing climate risk. UBS AM said the move followed a three-year engagement programme with 49 oil and gas companies identified as lagging on climate change performance. Nest said its share ownership in the five companies through the UBS funds represented £40m as of the end of June 2021. The companies will not return to Nest’s main portfolio until they “demonstrate clear progress in preparing for the low carbon economy”, it said.   

Meanwhile, Nest has also introduced a new carbon reduction target committing to reduce carbon emissions by 30% in public equities and fixed income by 2025, baselined against Nest’s 2019 portfolio.  

The Sustainability Accounting Standards Board (SASB) has kicked off a standard-setting project to evaluate the addition or revision of disclosure topics and metrics to better account for the impact on diversity, equity and inclusion on enterprise value across a range of industries. It is working to refine its methodology for industry selection and will launch market consultations on the topic in early 2022.   

The Centre for International Corporate Tax Accountability and Research (CICTAR) and Pensions and Investments Research Consultants (PIRC) have partnered to launch a new initiative on responsible corporate tax. They will call on corporations in sectors with a history of aggressive tax avoidance to adopt and report using the GRI's tax standard, including the provision of country-by-country reporting of taxes and other financial information. As the first action in the joint initiative, PIRC is supporting the filing of a shareholder proposal at Amazon calling on the company to disclose global tax practices and risks to investors.   

Schroders has confirmed it is in "advanced talks" to acquire a significant stake in Greencoat Capital, a European renewables infrastructure manager managing about £6bn assets under management.