Daily ESG Briefing: Texas passes bill banning pension investments in anti-fossil firms

The latest developments in sustainable finance

The Texas state legislature has passed a bill that would force the state’s pension funds to divest from companies that exclude fossil fuel companies. The funds named in the bill include the $155.2bn Texas Teacher Retirement System and $30.9bn Texas Employees Retirement System. Texas Governor Greg Abbott is still to sign the bill into law. 

The Banque de France’s supervisory arm, the ACPR, has conducted what it says is the world’s first climate-related stress test. The pilot test involved nine banks and 15 insurers and analysed their resilience to different climate risks to 2050. The work exposed uncertainties over how fast climate change will unfold and data gaps. A follow-up test is scheduled for 2023/2024.

Glass Lewis says there remains a dearth of female directors on the boards of public companies around the world despite the advancement of women to the highest level of governments and executive ranks in many countries. Its updated Board Gender Diversity report explores investor and state efforts to promote balance in the boardroom, and academic research on the benefits of diversity.

The central bank of Malaysia has finalised its ‘Climate Change and Principle-based Taxonomy’, which includes transition activities and a ‘no significant harm’ principle focused on pollution, biodiversity and resource efficiency. 

The Principles for Responsible Investment is calling on investors to feed into a “scoping study” on biodiversity data, in a bid to understand the extent to which existing data initiatives on the topic “meet investor requirements, and identify data challenges and potential solutions”. 

A guide for banks on how to have “meaningful conversations” with large corporate clients on their decarbonisation plans and associated financing has been published today by the University of Cambridge Institute for Sustainability Leadership and Banking Environment Initiative. Let’s Discuss Climate: The essential guide to bank-client engagement is available here.

The World Federation of Exchanges and UN’s Sustainable Stock Exchanges Initiative have published guidance for derivatives exchanges on how they can promote sustainable development. A group of 71 exchange representatives and other specialists have assessed current practices by derivatives exchanges when it comes to sustainability, and created an “action menu” – highlighting options and areas for future work.