Daily ESG Briefing: Union Investment commits to Net Zero

The latest developments in sustainable finance

Union Investment, the €427bn investment arm of Germany’s DZ Bank, has made a commitment to reaching Net Zero by 2050, and will join the Net Zero Asset Managers initiative. The asset manager, which said it had already reduced its financed emissions by 20% from 2019, recently introduced exclusion criteria for coal, and plans to exit coal mining by 2025, and coal power generation by 2035.

The UK government has banned the purchase of transferable securities and money-market instruments issued by the government of Belarus and state-owned banks, as part of its latest round of sanctions. On the anniversary of last year’s presidential election, which is widely considered to have been illegitimate, the government also banned the provision of loans to the Belarusian government and state-owned banks, as well as the provision of insurance and reinsurance services to state bodies. It comes as activists and opposition groups have stepped up their bond divestment campaign in recent months, urging asset managers to ditch their holdings in a $1.25bn bond issued by the Belarusian government in June 2020. 

The Central Bank of Chile has joined the Natural Capital Committee, a group created by the country’s Environment Ministry to provide recommendations for the measurement of its “stock of natural capital”. The committee aims to build on the work of its UK equivalent, which motivated the Dasgupta Review on the economics of biodiversity.

The Intergovernmental Panel on Climate Change report on global warming is likely to drive US regulation litigation, Bloomberg Law has reported. IPCC reports have been cited in more than 50 state and federal court opinions over the last 15 years – the most recent report could bolster defenses of regulations cutting emissions, as well as be used in cases against energy companies, according to one lawyer. 

The public consultation on the framework for a proposed global Sustainable Infrastructure Label (SI Label) has been extended to 31 August to allow extra time to submit feedback. The consultation kicked off in June on a framework developed under the finance industry-led initiative Finance to Accelerate the Sustainable Transition: Infrastructure (FAST-Infra), launched in early 2020 by the Climate Policy Initiative, HSBC, IFC, OECD and the World Bank Global Infrastructure Facility (GIF). The SI Label working group is led by Macquarie, HSBC and the World Bank GIF. 

Almost half of unregulated electricity and gas utilities across Asia, Latin and North America and the Middle East have a moderate or poor positioning for the carbon transition, according to a new report from Moody’s. Of the 51 utilities assessed by Moody’s, 22 received a carbon transition assessment of six or lower, indicating a poor or moderate positioning. Only 11 received the highest score of one or two on the scale, indicating an ‘advanced’ positioning.