Daily ESG Briefing: NY State Common requests transition plan details from 42 shale oil and gas companies

The latest developments in sustainable finance

The New York State Common Retirement Fund is evaluating 42 shale oil and gas companies, including Marathon Oil Corp and ConocoPhillips. The fund has requested the companies provide additional information, within 60 days, to demonstrate how they are developing, adopting, or implementing low-carbon transition strategies. The fund also said it will divest five additional coal companies, in which it holds shares worth $1.8m. The companies are: New Hope Corp., PT Indo Tambangraya Megah Tbk, Semirara Mining and Power Corp., Shanxi Coking Coal Energy Group Co. and Whitehaven Coal Ltd.

Japanese banking giant Mitsubishi UFJ Financial Group has joined the Partnership for Carbon Accounting Financials (PCAF), the increasingly influential group which seeks to develop methods to assess the climate impact of lending books and investments. Mitsubishi is the third Japanese financial institution to join PCAF after both Nissay Asset Management and Mizuho Financial Group became members last month. Mitsubishi, which saw 23% of its shareholders back a proposal calling on it to align its financing with the Paris climate agreement in June, also announced today that it had been elected as member of the UN-convened Net Zero Banking Alliance’s Steering Group.

The Canada Pension Plan Investment Board (CPPIB), the country’s largest public pension plan, has increased its shares in fossil fuel companies by 7.7% since 2016, according to a new report from the Corporate Mapping Project. The research finds that CPPIB has also increased its investment in renewables and that while fellow major Canadian public pension plan Caisse de dépôt et placement du Québec has slightly decreased its fossil fuel shares since 2016, it still has more than 52% more fossil fuel shares than CPPIB. 

A number of Japanese companies are investigating human rights violations in their supply chains, according to news reports. Cosmetic maker Kao will engage directly with 5,000 palm oil plantations in Southeast Asia and has plans to install a digital human rights record by 2025 to make it easier to identify abuses. Pharmaceutical company Shionogi, Asahi Group Holdings, Suntory, Japan Tobacco, materials maker Teijin and Sekisui Chemical are also poised to start human rights assessments.

Only 5% of UK defined benefit pension (DB) schemes are aiming for a market leading approach to climate change regulations. Research from adviser LCP finds 29% are aiming for minimum compliance with new regulations on climate governance. Also some 40% of DB schemes do not allow for climate change risks on the employer covenant, as they feel it is not relevant for them.

A research paper from the Federal Reserve has warned that climate change could hold back economic growth. The paper, by Fed Economist Michael Kiley, examined over 30 years of data covering real GDP per capita and temperature changes across 124 countries. It found “very strong” impacts of rising temperatures on downside risk to GDP growth.