Daily ESG Briefing: Norway’s sovereign wealth fund to ramp up climate engagement

Norway’s sovereign wealth fund plans to step up its engagement with portfolio companies on climate change, according to its Head of Governance and Compliance. In an interview with Reuters, Carine Smith Ihenacho said that the fund has “for a long time focused on better company disclosure … now we are focusing more on actions”. The fund will step up its engagement with climate laggards, especially in exposed sectors such as food and the extractive sector, with the possibility of voting against company or committee Chairs where they are not addressing climate in “an adequate manner”. Smith Ihenacho also said that the fund was considering expanding its policy of voting against company nomination committees at companies with one or no women on the board beyond Europe and the US for the 2022 proxy season.  

The UK Financial Conduct Authority has confirmed a series of rule changes which will allow premium listed companies in the UK to establish dual class shares. The FCA said that the changes would “encourage innovative, often founder-led, companies onto public markets, and so broaden the listed investment landscape for investors”. Other changes include reducing the free float threshold from 25% to 10% and increasing the minimum market cap for the premium and standard segments.

ING, La Banque Postale and UniCredit are among 27 Principles for Responsible Banking (PRB) signatories to sign a new ‘Commitment to Financial Health and Inclusion’. Signatories to the initiative, which is run by the PRB, commit to promote financial inclusion and “foster a banking sector that supports the financial health of customers”. The signatory banks will set targets on financial inclusion within 18 months, reporting annually on their progress against them, with example improvement measures given by the PRB including affordable bank accounts and accessible payment methods. 

Investments in ESG funds could grow to $30tn by 2030 from $8tn today, a new report from Broadridge has said. According to the report, ESG strategies accounted for just 11% of mutual fund and ETF assets but gained 30% of inflows in the 12 months to September, with net flows rising to $577bn in the first nine months of this year, compared with $355bn for the whole of 2020. The report noted competition for new net flows is increasing as “the complexity and costs of ESG implementation have risen, and fund selectors have begun to ask harder questions”.  

The UK’s infrastructure bank has made its first private sector investment, committing £250m to NextEnergy Capital’s UK solar infrastructure fund, which is targeting a £500m raise. The 10-year fund will invest in subsidy-free solar plants across the UK, with an expected generation capacity of 1GW. The infrastructure bank is also providing financing for the fund’s seed assets.