Daily ESG Briefing: Singapore state fund and HSBC partner on ‘marginally bankable’ sustainable infra in Asia

The latest developments in sustainable finance

HSBC and Singapore’s $282bn sovereign fund Temasek have set up a debt financing platform to fund “marginally bankable” sustainable infrastructure projects in Asia. The platform will invest $150m of equity to fund loans in its initial phase, focusing on clean transport, renewable energy and storage, and water and waste management. It aims to issue a total of $1bn debt funding within five years. The platform is supported by strategic partners the Asian Development Bank and Singapore government-backed Clifford Capital.

Wells Fargo shareholders have demanded that an ongoing Human Rights Impact Assessment (HRIA) undertaken by the bank includes a review of how its operations “may negatively impact vulnerable groups such as the LGBTQ community, people of color, the disabled, and low-income communities”. The bank previously rejected shareholder requests to conduct a racial equity audit on the basis of the ongoing HRIA. The shareholders include Schroders, Legal & General Investment Management, the state of Illonois, Zevin, Domini and Trillium. In August, the bank agreed to pay $7.8m to settle allegations that it discriminated against Black and female job applicants.

The $1.4trn Norwegian Government Pension Fund Global has excluded four pharmaceutical companies that manufacture traditional Chinese medicine over the use of animal parts from globally threatened species such as horns from the saiga antelope, leopard bone and pangolin scales. Separately, the fund revoked an earlier ban on Japan metals producer Hanwha Corp after it ceased production of cluster munitions.

The German sustainable finance campaign group Bürgerbewegung Finanzwende (Finance Watch Germany) is calling for more transparency and a new investment strategy at the €38.5bn German Federal and State Government Employees' Retirement Fund (VBL) – the largest public sector pension fund in Germany. According to the group, 85% of the fund holdings are not disclosed and it does not yet have exclusions in place for coal, arms and child labour. VBL has confirmed that it is yet to divest any holdings on sustainability grounds.

Sustainability disclosures by EU companies “remain too focused on general information and lack specific and meaningful data on risks, targets and key indicators”, according to research from public interest law firm Frank Bold. Only half the companies surveyed reported climate-related risks, while 85% did not provide disclosures of human rights impacts within their value chain. The findings are based on climate and human rights disclosures from 250 companies operating in high risk sectors in Germany, Spain, Poland, and the Czech Republic.