Daily ESG Briefing: Transition Pathway Initiative to provide free data on 10,000 companies’ Net Zero alignment

The latest developments in sustainable finance

The Transition Pathway Initiative (TPI) has announced its plan to establish the TPI Global Climate Transition Centre, which will provide free and publicly available data on how 10,000 companies are aligning with a Net Zero pathway. Set to be launched in 2022, and based at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, the Centre will also expand to assess Government bonds and corporate debt issuers.

Leading proxy advisory firm Glass Lewis, through its affiliate Glass Lewis Corporate, has launched an equity compensation plan service for public companies. It seeks to help companies improve their understanding on how shareholders are likely to vote on remuneration packages. “By delivering clearly-defined guidance and an understanding of a company’s unique scenario, the Equity Plan Advisory service helps companies anticipate shareholder concerns and design equity plans that are likely to meet shareholder expectations,” said Lili Mehta, SVP, Global Head of Corporate Business.  

The European Central Bank (ECB) has confirmed it will be conducting a stress test on climate-related risks in 2022 and that banks will be required to conduct a bottom-up stress test targeting transition and physical risks. For this, the institutions will provide starting points and their own projections under a common scenario and methodology prepared by the ECB. Supervisors will then challenge banks’ starting points and projections. Dubbed the 2022 ECB Climate Risk Stress Test (CST), the scenarios of the exercise will be based on the ECB economy-wide climate stress test of 2021 and will also require banks to assess how they are building their climate stress test capabilities for use as a risk management tool and include a peer benchmark analysis to compare banks across a common set of climate risk metrics.   

The Network for Greening the Financial System (NGFS) said today that a growing number of its members, across all continents, are using climate scenarios to identify, assess and understand climate risks in their economies and financial systems. The new NGFS report, Scenarios in Action: a progress report on global supervisory and central bank climate scenario exercises, which features input from 30 members of the central bank and supervisor network, also found that the NGFS scenarios are a foundational component in almost all the climate scenario exercises.  The NGFS and the Financial Stability Board will publish a joint report in 2022 on the main implications of possible future climate scenarios for the financial system.   

Puro.earth, the voluntary ‘carbon removal’ marketplace that works with Microsoft and SwissRe, has launched a tool to match firms “early stage, high quality carbon removal projects”. There are 13 projects using four removal methods on the platform, and companies with Net Zero pledges can sign offtake agreements with them.