Daily ESG Briefing: Two Japanese financial institutions join PCAF

The latest developments in sustainable finance

Nissay Asset Management has joined the Partnership for Carbon Accounting Financials (PCAF), which seeks to develop methods to assess the climate impact of lending books and investments. The $120bn asset manager is the second Japanese financial institution to join the partnership, after Mizuho Financial Group became a member at the start of July. More than 130 institutions from over 40 countries are PCAF members.

BlackRock voted against a proposal at Mitsubishi UFJ which would force the firm to align its strategy with the Paris Agreement because it was “concerned about the potential consequences that could result from the legally binding nature of the shareholder proposal”, according to its latest voting bulletin. While BlackRock said it agreed with the proposal’s “general intent to enhance Mitsubishi’s reporting of its climate action plan” and wanted better performance on climate initiatives and sustainability disclosures, it said that a legally binding resolution “could pose significant risks” to the business.

MarketForces has said that reported discussions between Barclays, Standard Chartered and Adani Airport Holdings over a $1bn financing package “go against the spirit” of their climate policies. The campaign group said that providing the financing to Adani Airport Holdings would free up money within the group which could potentially be spent on the Carmichael coal mine, and that providing any financing to Adani Enterprises would amount to “essentially supporting the Carmichael coal mine”.

The Saudi sovereign wealth fund has asked four unnamed banks to help it develop an ESG framework, according to Reuters. The fund has taken out tens of billions of dollars in loans in recent years, and the development of an ESG framework may pave the way for its first bond issuance, according to the article. The Red Sea Development Company, which is owned by the fund, took out a $3.8bn green loan earlier this year to build renewables-powered hotels.

The European Commission and the European External Action Service have published guidance on due diligence to help EU companies to address the risk of forced labour in their operations and supply chains, they have announced. The guidance claims to support companies seeking to eradicate forced labour from their value chains by providing "concrete, practical advice on how to identify, prevent, mitigate and address its risk".