Daily ESG Briefing: Oil and gas firms commit to ‘gold standard’ methane reporting

The latest developments in sustainable finance

The UN Environment Programme, the European Commission, and the Environmental Defense Fund have launched an initiative to improve the reporting of methane emissions, supported by 62 companies representing 30% of the world’s oil and gas producers. At the core of the initiatives is a new ‘gold standard’ methane reporting framework which accounts for the entire oil and gas value chain.

An analyst note from Fitch Ratings has suggested that the transition to a low-carbon economy will be “moderately credit-negative for banks and non-bank financial institutions (NBFIs) but less significant for insurers and funds”. The ratings agency said that banks may be saddled with higher capital and liquidity requirements for non-green assets, while NBFIs face risks from polluting assets.

In 2021, the Association of International Certified Professional Accountants will develop a resource for US auditors to support the assurance of ESG information in SEC filings, publish research tools which reflect the evolving relationship between business and sustainability, and deliver educational briefs on the role of accounting on sustainability issues. The Association’s plans for next year were published ahead of the International Integrated Reporting Council and SASB conferences.

Top Glove, the world’s largest rubber and latex glove producer, was forced to shut down operations after 43.8% of its factory workers were found to be Covid-19 positive. This comes on the same day the company announced its inclusion on the ESG-focused Dow Jones Sustainability Indices for the second year running; it is also a constituent of the FTSE4Good Malaysia index. Top Glove has faced repeated allegations of exploitative labour practices   

The Financial Stability Board, which consists of supervisors from G20 economies, has published research showing how the physical and transition risks of climate change could impact financial system resilience by causing a reduction in bank lending and insurance provision. It will conduct further work on the availability of climate risk data.

The Monetary Authority of Singapore has launched a subsidy scheme to encourage the take-up of green and sustainability-linked loans in the island state, offering up to S$100,000 (€62,692) to defray costs incurred by corporates to commission third-party sustainability assessments, up to S$120,00 for banks to develop green and sustainability loan frameworks and up to S$180,000 to develop the same frameworks for SMEs and individuals.