Daily ESG Briefing: Total writes down billions in assets as it quits lobby group over climate

The latest developments in sustainable finance

Total has announced a major write down of assets as a result of changing prospects for fossil fuels. The French giant said it was writing off $7bn worth of oil sands assets in Canada, as well as assets in Australia. It will also leave the Canadian Association of Petroleum Producers, citing a “misalignment” between the lobby body’s public positions and the climate commitments Total made back in May. Shell has also revealed a net loss of more than $18bn for the second quarter of 2020.

Federated Hermes EOS opposed pay at 50% of UK firms and 80% in the US, according to its latest public engagement report. In ‘The Distance Between Us, Crisis Management for a global pandemic’, the stewardship advisor explained its concerns in the UK about excessive variable pay (as at GSK, AstraZeneca, and Royal Dutch Shell) and insufficient share ownership guidelines (Intercontinental Hotels Group). In the US, it challenged the ‘excessive’ severance package awarded to MacDonald’s former CEO and the lack of a robust ‘clawback’ policy; the high pay and use of short-term stock options at Tyson Foods; and high pay and lack of shareholding rules for executives at Facebook..

ESG criteria are not yet fully integrated into banks’ strategies and more responsible practices can be achieved if banks incorporate criteria into risk management frameworks and measure this more effectively, according to audit and advisory firm Mazars. ‘Responsible banking practices: benchmark study 2020’ reveals only three out of the 30 banks assessed demonstrate best practice across a wide range of sustainability factors, with 10 showing a sustainable approach across some factors, and more than half (17) showing limited evidence of a sustainable approach across most factors.

The European Commission is seeking what it describes as a facility to support the “upgrade and implementation” of Nationally Determined Contributions (NDCs), the original emissions reductions targets pledged by the signatories to the Paris Agreement. According to the notice issued this month, the EU Global Support Facility will provide “high level technical assistance and policy advice at country, regional and global level to support the upgrade and implementation of the nationally determined contributions under the Paris Agreement and other relevant regional, national and local climate strategies and action plans”. Expertise in ESG measures and standards, carbon markets, carbon footprinting and natural capital accounting are included among the selection criteria for the €14m contract, which is expected to run for five years. The deadline for applications is 20 August. 

77 global stocks stand to benefit from the growing adoption of clean hydrogen, according to Morgan Stanley Research. In a recent report, ‘Sustainability: Decarbonisation: The Race to Net Zero’, analysts said clean hydrogen is one of five technologies needed to halt climate change and achieve the Paris Agreement. The stocks are exposed to different parts of the hydrogen value chain, from production to distribution and end use, in addition to power generation companies with a material exposure to renewable electricity. Additionally, over the last three months their share price has risen by 34% on average, outperforming their market indices by 18%.

Northvolt has raised $1.6bn from commercial banks, pension funds and public financial institutions to build two gigafactories for lithium ion battery production. Societe Generale acted as technical bank and lead arranger on the financing of the Swedish battery manufacturer.

The UK Work and Pensions Committee is to investigate pension scams in the first strand of a three-part inquiry. Transparency Task Force had campaigned, along with hundreds of victims of pension scams, for MPs to take action. Andy Agathangelou, Founder of Transparency Task Force said: “The news gives pension scam victims hope: hope that reforms will be made to make it hard for innocent people to have their pension savings stolen from them.” The Financial Conduct Authority (FCA) and The Pensions Regulator say that 180 people reported to Action Fraud that they had been the victim of a pension scam in 2018, losing on average £82,000 each. They also believe that only a minority of pension scams are ever reported.

Impact Lens and Liontrust Asset Management have backed a new film shining a light on why electronic waste is a serious risk for investors. The film, E-LIFE, highlights the need for investors to consider environmental and health issues, and throw their weight behind creating a circular economy.

Think tank Preventable Surprises will host an online roundtable on climate lobbying and corporate political capture in the transportation sector on 28 August. Register interest using this form.