Daily ESG Briefing: UK govt to look at social factors in pension investments

UK Pensions Minister Guy Opperman has written to 40 large pension schemes in the country to ask them how they integrate financially-material social factors into investment and stewardship activities. Speaking at a pensions conference held by the Trades Union Congress, Opperman said that he also plans to launch a public call for evidence to understand how effective trustee practice is in relation to social factors.

Swiss Re has announced interim targets for its Net Zero goal, aiming to reduce the carbon intensity of its portfolio by 35% by 2025, exit thermal coal by 2030 in the OECD and 2040 elsewhere, increase renewables and social infrastructure investments by $750m and exposure to green social and sustainability bonds by $1.6bn by the end of 2024. It will report against these targets annually. Last week, it was reported that fellow insurance giant Axa would drop RWE as a client by the end of 2022 because of its coal operations and slow response to climate risk. Spanish insurer Mapfre also said on Friday that it would no longer provide cover for infrastructure projects linked to coal mines or thermal power plants, and will stop underwriting risks linked to Arctic oil and gas projects or sites associated with tar sands. 

The Church Investors Group has announced plans to engage with UK companies to encourage them to guarantee minimum working hours for their employees. The £21bn investor alliance is working with the Living Hours Initiative on the project. The initiative aims to guarantee a minimum of 16 hours of work a week and four weeks notice for shifts. The group has not disclosed the companies it will be engaging with but said it will initially target the finance and insurance sectors, expanding to construction and utilities later in 2021.

2º Investing Initiative is consulting on a tool to help financial institutions get to grips with the difference between portfolio decarbonisation and real world impact. The Climate Action Guide allows users to simulate different climate strategies and review evidence of real world impact, as well as identify potential partners and peers. A beta version is available for feedback until March 21. The think tank has also updated its Paris Agreement Capital Transition Assessment (PACTA) tool in a bid to help investors comply with the recommendations of the Taskforce on Climate-related Financial Disclosures and EU’s new Sustainable Finance Disclosure Regulation.

France-based firm Linedata, which offers software and data services to asset managers globally, will include ESG data from Arabesque as part of a new agreement. Arabesque’s data arm, S-Ray, will provide Linedata’s 450+ asset management clients with information to help them “adapt to evolving requirements under Europe’s new Sustainable Finance Disclosure Regulation and the US’ new ESG agenda” and make ESG-informed decisions, Linedata said in a statement. The new offering includes “basic” ESG and UN Global Compact scores and access to ‘pay as you go’ premium data.

Asia-based non-profit the Mekong Club has teamed up with consultancy the Research and Communications Group and PR firm Ashbury Communications to launch a paper on tackling forced labour in the private sector. COVID, ESG and Going to the Moon: How Business Can Unite to Eliminate Forced Labour challenges businesses to eliminate forced labour from their supply chains by the end of the decade, and outlines a plan for doing so without hurting profits.