Daily ESG Briefing: SEB axes fossil fuels, gambling, tobacco from all funds

The latest developments in sustainable finance

The asset management arm of Sweden’s SEB will ditch fossil fuels, tobacco and gambling companies from all its funds by the end of the quarter, it has said. The new rules will cover firms involved in the extraction and production of fossil fuels, as well as fossil fuel-related power generation and distribution, with the aim of making all funds carbon neutral by 2040. The firm will also improve its in-house analysis to help it give “greater consideration” to the long-term sustainability of companies being included in portfolios. Following the divestment, SEB will drop the words 'sustainable' and 'sustainability' from fund names, as it claims that all its funds will be sustainable. 

National Australia Bank (NAB) has reportedly stepped in to help finance the largest thermal coal terminal in the world after fellow Aussie banking giant ANZ divested the project over climate concerns. Local media reports state that ANZ made the decision to exit Australia’s port of Newcastle during its A$950m (€605m) refinancing in November, in accordance with its current climate commitments. News outlet ABC wrote that NAB, “among several others”, had agreed to fill the shortfall. "We are working with responsible lenders who are interested in helping businesses like Port of Newcastle become more sustainable and diversify," the bank is quoted as saying. Last year, 160m tonnes of coal left the port, accounting for 99.2% of its exports by volume. 

The Irish Central Bank has announced that it will increase scrutiny of ‘eco-friendly’ investments, as it warned that greenwashing could threaten the credibility of green finance. In a report on securities market risk, the bank said that it would be “closely scrutinising applications for authorisation of ‘green’ funds or securities offerings where prospectus approval is required”.

More than 30% of the largest institutional investors think climate change will be the factor with the biggest impact on the way they invest in the next three to five years, according to MSCI’s 2021 Global Institutional Investor Survey. Three quarters of the 200 investors surveyed said that they had increased their ESG investments in response to the Covid crisis, with the figure rising to 90% for the largest institutions.

The Intercontinental Exchange has announced that it will be moving its trading of European carbon futures and options from London to Amsterdam. The exchange, which is one of the largest exchanges trading EU carbon allowances, already has its trading index for natural gas futures and options in Amsterdam.

Investors including Dutch asset manager Robeco, have co-filed a proposal at Tesco calling on the UK’s largest supermarket chain to ramp up disclosure and set targets on healthier product sales. It is the first ever health-based shareholder proposal to be put to a FTSE100 company and marks an escalation in engagement by shareholders, who are increasingly concerned about reputational and regulatory risks unhealthy products pose to businesses.