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Daily ESG Briefing: UK pension scheme exits 150 companies over ESG issues

The latest developments in sustainable finance

UK pension fund The People’s Pension has sold £226m of investments in a mass divestment of around 150 companies. The £16bn scheme declined to name the companies, which it said included controversial weapons companies as well as firms linked to severe controversies involving human rights, labour, the environment and corruption, and said it had decided to divest from the companies rather than engaging further through State Street Global Advisors, due to the severity of the controversies.

The Responsible Investment Association Australasia, UN Global Compact Network Australia and the First Nations Heritage Protection Alliance have launched an investor and business initiative to strengthen laws and private-sector standards for the protection of the human rights of First Peoples and their cultural heritage. Estelle Parker, Executive Manager of Programmes at RIAA, said the global investor backlash over the destruction of two culturally significant Aboriginal sites at Juukan Gorge by Rio Tinto last year demonstrated that “First Nations’ cultural heritage is both a moral issue as well as a material financial risk”. 

Hannover Re, the world’s third largest reinsurer, has joined the Net-Zero Insurance Alliance alongside the Alliance’s first members from Africa and Asia – Kenya’s ICEA LION and South Korea’s Shinhan Life Insurance. They are joined by Cyprus-based maritime insurer American Hellenic Hull and NN Group, one of the Netherlands’ largest insurers.

BMO Real Estate Partners has committed to net zero, and announced a phased pathway to decarbonising its portfolio. The firm, which has some £6.7bn invested in property, said it would set interim targets, with the goal of becoming third-party certified as carbon neutral by 2032, and reaching net zero by 2050. As part of its strategy, it will “bring new property assets in line with a net zero carbon trajectory” within two years and reduce operational emissions from existing assets. Carbon offsetting will be considered “as a last resort” after all other options to cut emissions have been explored. The news comes as Moody’s Analytics announced it has added climate risk scores to its commercial real estate analytics platform.

CSR Europe and Moody’s affiliate VE have published a ‘sustainable industry barometer’, measuring the ESG performance of European industry sectors and federations. While most industry federations performed relatively well in the assessment, which focused on the integration of sustainability with federations’ policy, organisation, roadmaps and activities, only 30% reported any activity around direct impact projects, focusing instead on knowledge sharing and training for their members. The barometer also looked at sector performance based on VE’s ESG scores. Of the 1,590 companies assessed on their management of physical climate risk, 876 received a score of 0 out of 100.