Daily ESG Briefing: UK pension funds to assess diversity in asset manager selection

The latest developments in sustainable finance

A £1tn coalition of asset owners in the UK, including Nest, Railpen and the Church of England Pension Board, has pledged to take account of asset manager diversity and disclosure when choosing new partners. Under the new Asset Owner Diversity Charter, diversity questions will form part of overall assessment scores for fund managers, who will be provided an annual diversity questionnaire covering industry perception, recruitment, culture, promotion and leadership. 

Australian oil & gas producer Santos has been criticised for acquiring oil fields operator Oil Search, despite its commitment to become Net Zero by 2040. The Australasian Centre for Corporate Responsibility called the A$21bn (€13bn) deal, which will create one of the 20 largest oil and gas companies in the world, “climate vandalism of the highest order”. Dan Gocher, the NGO’s Director of Climate & Environment, said the merger “demonstrates that neither company is serious about taking climate action”.

Around 60% of countries signed up to the Paris Agreement have not issued new or updated climate targets, known as Nationally Determined Contributions (NDCs), by last week’s cut-off date. 110 new or updated NDCs were sent to the UN Framework Convention on Climate Change, out of 197 parties. The cut-off date for submissions allows the UNFCCC to review, quantify and summarize the content of the new or updated NDCs ahead of COP26 later this year.

The UK’s Science Museum reportedly rejected a partnership with the Oil & Gas Climate Initiative (OGCI) after one of its members “fell short” of the Transition Pathway Initiative’s (TPI) assessment. OGCI comprises the CEOs of 12 oil companies, including Exxon, Chevron, Saudi Aramco and China National Petroleum Company. According to leaked documents and media reports, “the OGCI was offered a range of promotional opportunities and contact with the exhibition's curatorial team as part of the deal”, but these opportunities were taken off the table when one member failed to align with the expectations of the TPI. “Climate campaigners have criticised the [Science Museum’s] reliance on the tool, saying its standard is far lower than the institution's own target to reduce its emissions in line with the 1.5°C set out in the 2015 Paris Agreement,” reported the Museums Association. The TPI was created by asset owners to assess “companies’ preparedness for the transition to a low-carbon economy”. 

Energy company Ignitis Group has created a Group Supplier Code of Ethics for its suppliers and subsidiaries. The Code includes provisions on human rights, environmental protection and employee health and safety meeting best international guidelines.

The Big Exchange, a retail platform for ESG and impact funds, has launched a crowdfunding campaign allowing the public to invest directly in the platform. Since its launch eight months ago, the Big Exchange has attracted £58bn under management spread across 46 independently rated ESG funds from 15 asset managers.