Daily ESG Briefing: Norway Council of Ethics issues ESG data tender

The latest developments in sustainable finance

The Norwegian Council of Ethics, which advises the $1trn Norwegian Government Pension Fund Global on the companies it should monitor or exclude on ESG grounds, has put out a tender for access to an ESG database, including accusations against companies, to inform its assessment of companies held by the giant fund. The value of the contract, which runs for two years – with the option to extend twice by a further year – is NOK5m (€485K). The deadline for proposals is 18 August. 

168 investors with $17trn in assets collectively, including Legal and General Investment Management and Amundi, have urged over 1,300 companies to disclose environmental data to the CDP. Netflix, Alibaba Group and Rio Tinto are among the companies engaged as part of CDP’s 2021 non-disclosure campaign.

Aviva and the WWF have announced a partnership which aims to lobby the UK government to introduce mandatory Paris-aligned transition plans for regulated financial institutions. In a joint policy paper titled Transition Plans for a Net Zero Future, the partnership sets out four further recommendations for the government including creating a clear policy framework to drive net zero across the real economy and using its position in multilateral groups including the G7 and G20 to encourage other countries to mandate transition plans.

The International Monetary Fund (IMF) is due to propose a Paris-aligned minimum global carbon price for the largest global emitters ahead of the COP26 summit. The draft arrangement, which is still being discussed by the IMF board and membership, will be launched by G20 countries initially, with potential to be expanded to other countries.

Pensions risk and investment management specialists Cardano have published their default net zero position, which they will apply to all their fiduciary management mandates in the future. The group has committed to a net zero investment portfolio by 2050, with a 50% reduction by 2030. Cardano also plans to increase its investment in green bonds, and says it will favour engagement over divestment in its equity portfolio.

The value of sustainability-themed investment products grew by 80% between 2019 and 2020, amounting to $3.2trn globally, according to a new report by the United Nations Conference on Trade and Development (UNCTAD). Separately, the UNCTAD has announced the launch of the forthcoming UN Global Sustainable Finance Observatory, which will seek to integrate the SDGs into “all aspects of the global financial ecosystem”.  The observatory will be launched during UNCTAD’s World Investment Forum in October 2021.

ESG is high on the agenda for more than half of UK pension trustees, according to research from the Pensions Management Institute and BMO Global Asset Management, but confidence in their ability to implement policies is low. Almost half of trustees surveyed said their trustee board was only set up to deal with “some aspects” of ESG, and 73% rely on consultants for adherence to ESG rules. A further 61% said there were material obstacles to implementing ESG policies, with a fifth saying they were not confident in understanding new TCFD reporting rules.

The proportion of women on the boards of NASDAQ Stockholm-listed companies has risen to 34.5%, up from 33.7% last year, according to figures from AP2. While the proportion of female Chairs stayed static at 8.6%, down from a high of 10.2% in 2019, there was greater gender diversity on the boards of large-cap listed companies, whose boards were 40.7% female.

The Australian government has rejected an application to build the world’s largest renewables project in the Pilbara region of Western Australia, citing concerns over sensitive wetland areas and the impact on migratory birds. The A$50bn (€32bn) project would have seen the construction of a large solar and wind farm providing energy to produce green hydrogen for export to Asia. Junior coalition partner the National Party today also ousted its leader, the Deputy Prime Minister, in favour of Barnaby Joyce, a noted climate change sceptic.

The Joint Study Group on Biodiversity and Financial Stability has published a vision paper exploring the case for action on biodiversity. The paper says that around half of global GDP is dependent on nature and ecosystem services, and that applying a double materiality approach to biodiversity loss could be particularly useful.