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Daily ESG Briefing: UN chief tells GFANZ members to adopt asset owner approach, provides update on Net Zero scrutiny body

The latest developments in sustainable finance

UN Secretary General Antonio Guterres has called on members of the Glasgow Financial Alliance for Net Zero (GFANZ) to adopt the UN’s Net-Zero Asset Owners Alliance framework when it comes to commitments and transparent targets. Speaking at COP26 yesterday, he said the alliance, which was launched at the UN Secretary General’s Climate Action Summit in 2019, was “the gold standard for credible commitments and transparent targets”. The Alliance is one of the initiatives that makes up the larger GFANZ group, alongside similar coalitions for asset managers, consultants, banks and insurers. Last week, Guterres  revealed that the UN will set up a body to scrutinise private sector climate pledges. He has now confirmed that a High-Level Expert Group will “propose clear standards to measure and analyze net zero commitments from non-state actors” in 2022. “They will work in a transparent and inclusive manner, and I invite you all to cooperate fully in their establishment and then with them,” he added.  

The $36bn San Francisco public pension fund has pledged to halve the carbon footprint of its public equity and bonds portfolios by 2025 and reduce it by 65% by the end of the decade. The intensity-based reductions are based on a 2017 baseline and cover the fund’s Scope 1 and 2 emissions, the San Francisco Employees' Retirement System (SFERS) revealed in an update on its climate action plan. The fund also acknowledged that there is “significant uncertainty” over whether carbon capture technologies, which are required under nearly all 2050 Net Zero scenarios, will “emerge and, should they, whether they will be investable for SFERS”. SFERS added that, without “institutional quality, carbon negative investment opportunities, it may be challenging for SFERS to ‘net out’ any remaining carbon in the portfolio as we near 2050”.   

The Governor of the Ireland’s central bank has reportedly said that he is “particularly” concerned about the practice of greenwashing. Gabriel Makhlouf is quoted in the country’s press as saying that, "Green market practices are currently almost exclusively based on voluntary principles and standards, which leaves a lot of room for different interpretations". "There is a spectrum of risks here from the accidental error to the deliberate misdeed," he added.   

Banking giant Mizuho Financial Group has been appointed chair of a new Japanese arm of the Partnership for Carbon Accounting Financials (PCAF), which seeks to standardise carbon calculations by financial institutions. Mizuho was the first Japanese financial institution to join PCAF in the summer, shortly followed by Nissay Asset Management. There are now six members from Japan in the partnership, which seeks to develop methods to assess the climate impact of lending books and investments.  

US proxy advisor Glass Lewis has entered into an agreement with Alembeeks, a corporate governance and technology company based in Spain, to provide global proxy voting and stewardship solutions to its clients.