Daily ESG Briefing: PRI adds 262 new signatories, including 43 asset owners

The latest developments in sustainable finance

The Principles for Responsible Investment has added 262 new signatories, including 43 asset owners, it said in its fourth quarter signatory update. “As of 31 March 2020 the PRI had 3,038 signatories, representing US$103.4trn,” it said.

The PRI has published a briefing on Sustainable Finance Policy in Japan; this aims to act as a primer for both Japanese and overseas investors to understand current sustainable finance policy frameworks in the country. The UN-supported network recommended further reforms to accelerate development in the following areas: sustainable finance strategy, stewardship and corporate governance codes, asset owner regulations, corporate ESG disclosure, and climate policy.

The EU Technical Expert Group (TEG) on Sustainable Finance has won the annual Climate Finance Week Ireland Sustainable Finance Leadership Award for having “played a key role in assisting the Commission to design new sustainable finance policies, the development of the taxonomy for climate change mitigation and adoption, the EU green bond standard, and climate benchmarks and guidance for climate relevant disclosures for corporates”. The award was presented to the four rapporteurs of the TEG: Nathan Fabian (PRI), Aila Aha (Nordea), Elena Philipova (Refinitiv) and Jose Luis Blasco (Acciona). 

It comes as Ireland’s Sustainable & Responsible Investment Forum (SIF) has announced it will be joining the European Sustainable and Responsible Investment (Eurosif) network as a full member. 

Consulting firm Willis Towers Watson, in a call to trustees, has said just eight additional hours a year focused on climate action and long-term stewardship would begin driving much-needed results; in particular, it recommended clearer policy, a renewed focus on engagement with regards to long-term stewardship, and that reviewing investment managers' voting records on key ESG issues and guiding voting behaviour to be consistent with trustees' investment objectives is vital. WTW based its conclusion on an analysis of typical trustee investment meetings.

Eugene Scalia, the US Labor Secretary, has said that new rules introduced by the Trump administration as part of a crackdown on ESG investing will help to ensure “that the interests of ordinary Americans are not sacrificed for the au courant views of global elites”. His comments were made as the Department of Labor introduced new rules which would make it harder to include socially-minded investments in plans covered by the Employee Retirement Income Security Act.

Increasing index fund activism on ESG issues is a result of asset managers being locked in competition for the assets of the millennial generation – who, more than their forebearers, integrate social values into their economic decisions – according to a forthcoming report. In Shareholder Value(s): Index Fund ESG Activism and the New Millennial Corporate Governance, Michal Barzuza and Quinn Curtis from the University of Virginia School of Law and David H. Webber at the Boston University School of Law will explain the growing role of the big three index fund managers, BlackRock, Vanguard, and State Street, in promoting ESG issues at major companies.

Square Mile Investment Consulting and Research has expanded its range of responsible investment ratings, ESG assessments, and impact accreditations to five individual metrics. Within the expanded suite, intended to aid financial advisers meet client expectations and requirements, are in-depth qualitative insights brought by Square Mile, and evidence-based audit approaches by 3D Investing, a ratings software powered by Square Mile subsidiary, Ethical Money Limited.

The Bank of China has issued Asia’s first blue bond; it is a dual currency bond raising the equivalent of $942m. The proceeds will go towards 25 projects aiming to protect the ocean. Societe Generale was a joint global coordinator for the $500m three-year tranche of the deal, which was combined with a ¥3bn (US$442 million) two-year offshore renminbi offering by Bank of China’s Paris and Macau branches.