Daily ESG Briefing: Norway’s election winner wants Net Zero goal for $1.4trn SWF

The latest developments in sustainable finance

Norges Bank Investment Management, the manager of Norway’s $1.4trn sovereign wealth fund, has reportedly been told that the giant fund should set a 2050 Net Zero target by the country’s newly elected Labor Party. Speaking to Bloomberg, Labor’s climate spokesperson, Espen Barth Eide said: “We want the fund to use active ownership strategies to achieve Net Zero across the companies in the portfolio.” It follows various calls for the fund giant to commit to Net Zero, for example by a group of experts led by Christiana Figueres, the former head of the UN’s Framework Convention on Climate Change.

The Council of Institutional Investors (CII), the influential US association of investors, has filed an amicus brief in support of a lawsuit brought against the US Securities and Exchange Commission (SEC) over Trump-era rules designed to make it harder for smaller investors to file resolutions at companies.  Earlier this year, the Interfaith Center on Corporate Responsibility (ICCR) teamed up with shareholder advocacy group As You Sow and corporate governance specialist James McRitchie to lodge their challenge at the US District Court in Columbia. CII, whose members include the world’s largest asset managers such as BlackRock, Vanguard and State Street Global Advisors, give concrete examples in its filing on how shareholder proposals have been “valuable in promoting good corporate governance and long-term shareholder value”. 

The Social Democratic Party of Germany emerged from yesterday’s election as the largest party, followed closely by the Christian Democrats and their Bavarian sister party the Christian Social Union. Both the Green and Free Democrat parties performed well, and will likely act as kingmakers in future coalition negotiations, which are expected to last several months. Read RI’s analysis of what the election might mean for German sustainable finance here.

ASEAN Exchanges, a group of seven South East Asian exchanges, has launched a working group on sustainability which will start work on identifying core ESG metrics in sustainability reports among member exchanges. The group includes exchanges from Malaysia, Indonesia, Vietnam, Philippines and Singapore.

Members of a working group on ESG corporate disclosure formed by Japanese security regulator the Financial Services Agency discussed various proposals for sustainability and governance-related disclosures, such as human capital, diversity, board activities and cross-shareholdings, at its first meeting according to recently issued minutes (in Japanese). The group’s second meeting will take place on October 1.

Class-leading ESG funds demonstrated “persistent outperformance” in Europe – by as high as 12% – compared to the broader market, while gains by ESG funds in the US were attributable to sector allocation – mainly to tech – rather than their sustainability performance, according to research from analytics provider Investment Metrics. Researchers suggested that “regional differences in investor preference” was driving up the prices of ESG stocks in Europe.

Global standards setter ISO has launched the London Declaration which commits signatories to embed climate considerations into every new standard that is created, including retrospectively adding these requirements into existing standards as they are revised. An action plan is to be subsequently developed which will establish tangible initiatives and reporting mechanisms. The Declaration was developed by ISO member the British Standards Institute, and was signed at a meeting of all 163 national standards bodies in London last week.