Daily ESG Briefing: UK to issue green gilts as part of new climate finance pledges

The latest developments in sustainable finance

The UK government has announced a raft of green finance initiatives including plans for its first sovereign green issuance, in addition to confirming the introduction of mandatory TCFD-aligned climate disclosures for large companies and financial institutions by 2025, the first major economy in the world to do so. The UK will also develop its own sustainable finance taxonomy, using the EU’s framework as a starting point. However, the latest statement appears to be a departure from earlier government announcements which suggested that climate reporting would be made mandatory as soon as 2022.   

NGO’s JustShare, ShareAction and the Australasian Centre for Corporate Responsibility, are asking the signatories of Climate Action 100+ (CA100+) to push back against South African energy and chemicals company Sasol over its rejection of a climate-related shareholder resolution. JustShare has written to the investor coalition after Sasol – a CA100+ target company – refused to accept the resolution on its ballot. The proposal asks the firm to report its Scope 1, 2 and 3 emissions, outline its plan to align with the Paris Agreement and explain how it will address climate in its executive remuneration packages. 

J.P Morgan will use ESG data from RepRisk on its flagship multi-asset data and analytics platform, DataQuery, as part of a new partnership announced this week. 

The Hong Kong Monetary Authority has inked a partnership with the IFC to help develop green commercial banks and encourage more green finance. Under the initiative, the city-state’s de facto central bank will serve as a hub for green finance among commercial banks in Asia by providing research, training and practical guidance.

San Francisco voters have approved the introduction of a new tax on companies with overpaid executives, a measure which is expected to raise between $60m and $140m annually. According to reports, the new law adds a 0.1% surcharge onto the annual tax bill of firms that pay their executives more than 100 times the salary of their median worker.

TD Bank Group has created a climate action plan, which includes a target to achieve net-zero greenhouse gas emissions associated with its operations and financing activities by 2050. Alongside this, the bank has established dedicated climate transition teams to advise and support clients.

Scottish Widows will axe £440m of investments that do not meet its ESG standards, warning of further divestment if companies do not take action to improve the sustainability of their business practices. The UK insurer’s new policy targets firms that derive more than 10% of revenues from thermal coal and tar sands, manufacturers of controversial weapons, and violators of the UN Global Compact on human rights, labour environment and corruption.

UK Pensions Minister Guy Opperman has backed a recommendation from the Association of Member Nominated Trustees (AMNT) to set up an industry working group, led by the UK Department for Work and Pensions, to develop solutions to challenges around shareholder voting – especially in relation to allowing trustees’ voting policies to be implemented by fund managers in pooled fund arrangements. AMNT made the recommendations in Bringing shareholder voting into the 21st century, which evaluated various obstacles for trustees.