Daily ESG Briefing: UniSuper says 26% of portfolio will be Net Zero by 2022

The latest developments in sustainable finance

Aussie super fund UniSuper, which manages A$100bn (€60bn) on behalf of academics, has revealed that it has halved its fossil fuel exposure since last year. In its fourth annual climate risk report, the fund said that its overall fossil fuel exposure is down to 2.5% from 5% in 2020. “We’ve achieved this progress by divesting some positions, eliminating holdings in companies that generate more than 10% of revenue from mining thermal coal, and not adding to existing positions as the portfolio has grown,” the fund, which has pledged to become Net Zero by 2050, said. It added that 26% of its portfolio will be carbon neutral or ‘net-zero’ by 2022 – including its A$2.6bn direct unlisted property portfolio. Meanwhile, Japan’s Government Pension Investment Fund (GPIF) has revealed that its real estate portfolio is aligned with a 2.78°C temperature score based on an analysis by MSCI ESG Research. The fund estimates that it will need to reduce emissions by 32.8 of carbon dioxide per square metre over the next 10 years to reach its 1.5°C target. GPIF said the portfolio was also exposed to sea level rise and high heat but the likelihood of physical risks remained “low”.

 Nasdaq is facing a legal challenge to its plans for corporate board diversity quotas, which received the nod from the US Securities and Exchange Commission last week. The stock exchange is moving to introduce comply-or-explain diversity targets requiring boards to have at least two “diverse” board members; but Texan non-profit the Alliance for Fair Board Recruitment – led by conservative strategist Edward Blum – has filed a challenge at the US Court of Appeals alleging that the rule oversteps Nasdaq’s authority under federal securities law and violates civil rights legislation. 

Canada’s Responsible Investment Association (RIA) has called on the country’s financial conduct regulator to include sustainability preferences in suitability tests. In its response to the Investment Industry Regulatory Organization’s consultation on ‘Know-Your-Client and Suitability Determination guidance’, RIA pointed to similar work done in Australia and the EU, stating: “We submit that the idea that sustainability preferences fall within the scope of ‘investment objectives’ is not novel, and reflects a desire by investors in Canada and across the world to invest according to their values or sustainability preferences”.

US companies whose CEOs signed the Business Roundtable’s 2019 statement on corporate purpose have since attempted to exclude more than 40 shareholder proposals asking them to outline how they intend to honour the commitment, according to research by Harvard academics. The finding “casts serious doubt” on the credibility of the commitment to stakeholder capitalism, the authors write. 

US-based climate risk specialist Four Twenty Seven, which was acquired by financial giant Moody’s in 2019, has announced that it is to retire its name and replace it with Moody’s ESG Solutions 

Chile’s securities regulator CMF is reportedly preparing to unveil draft ESG disclosure rules for publicly-traded companies in the next 10 weeks. According to a blog on digital intelligence firm bnamericas, the rules will be based on the Sustainability Accounting Standards Board disclosure standards.

Korea’s top financial regulator, the Financial Services Commission has joined the central banking body the Network for Greening the Financial System.