Daily ESG Briefing: UK Export Credit Agency commits to Net Zero

The UK’s Export Credit Agency has committed to reaching Net Zero by 2050 across its £50bn financing capacity as part of its newly released climate strategy. The agency said that it would begin reporting on emissions from carbon intensive projects, establish climate stress testing and increase financing for green projects. It will establish interim targets and produce a second strategy in 2025 reporting on its progress.

China has confirmed that it will no longer fund the construction of coal-fired power plants abroad. At a speech made to the UN General Assembly, President Xi Jinping said that “China will step up support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power projects abroad”. More than 70% of coal plants built today rely on Chinese funding according to a July report from the International Institute of Green Finance, although no coal projects have received financing under China’s Belt and Road Initiative in the first half of 2021. 

The Taskforce on Scaling Voluntary Carbon Markets has announced a new independent governance body for voluntary carbon markets. The new body will take over leadership of the Taskforce, which was established by Mark Carney to help scale voluntary carbon markets. Its first priority will be the finalisation of the Core Carbon Principles, a set of international standards which will provide a benchmark for the quality of carbon credits. It will be led by a board composed of 22 representatives, including figures from the Climate Bonds Initiative, Standard Chartered, BP and the Children's Investment Fund Foundation, and three representatives from indigenous communities. 

A shareholder proposal at AGL calling on the company to set Paris-aligned decarbonisation targets received 52.56% support at its annual general meeting today, the highest support ever for a contested vote at an Australian company. Dan Gocher, Director of Climate and Environment at the Australasian Centre for Corporate Responsibility, which filed the resolution, said: “An overwhelming majority of shareholders in AGL has sent a resounding message to the board of AGL: align your business with the Paris Agreement.”  Vanguard has revealed that its funds supported the resolution. The US investment behemoth also revealed that it voted against the only director up for reelection, Jacqueline Hey, at the company over climate governance concerns.

The Mongolian Sustainable Finance Association (MSFA) has become the 36th member of the UN-convened International Network of Financial Centres for Sustainability. The MSFA was founded in 2017 by the Mongolian Bankers Association, and currently collaborates with 12 banks, two asset managers, an insurer and seven other financial institutions. The country developed its own green taxonomy in 2019 and is currently working on an SDG equivalent.

The utility sector faces the highest physical climate risk, with water stress the largest risk factor, according to a new report by S&P Global. According to the analysis, which looked at the physical risk posed by climate change to 15,000 companies, increasing droughts will cause significant difficulty for water utilities and hydropower producers, while nuclear and coal power plants which require significant quantities of water for cooling will also face issues. Other destructive events caused by climate change such as hurricanes and wildfires also rank among the highest risk factors. The materials, energy and real estate sectors are also among the sectors most at risk. 

Ninety One – formerly Investec Asset Management – and Imperial College London have announced the launch of a ‘Climate Risk Programme’ to educate the asset manager’s staff on climate-related risks and opportunities. Over a hundred of the firm’s employees have taken or are currently taking part in the course, which “builds on their ability to assess climate risk”, and improves knowledge of climate change mitigation and technological developments.