Daily ESG Briefing: US SIF launches report on effectiveness of passive ESG

The latest developments in sustainable finance

The US Sustainable Investment Forum (SIF) Foundation has released research on passive investment trends, exploring concerns around the ability of passive strategies to be as effective in managing sustainability as active approaches. It looks at four different examples of passive investments with an ESG focus. To read the report, click here

Law firm Robbins Geller Rudman & Dowd has filed a class action seeking to represent shareholders in FirstEnergy Corp. The legal complaint accuses FirstEnergy of making “materially false and misleading statements”. “Specifically, defendants touted FirstEnergy’s legislative ‘solutions’ to problems with its nuclear facilities, but failed to disclose that these ‘solutions’ centered on an illicit campaign to corrupt high-profile state legislators in order to secure legislation favoring the Company,” the law firm alleges in a statement, referring to "a $1.3bn ratepayer-funded bailout to keep the company’s failing nuclear facilities in operation”.

Moody’s has made new environmental sustainability commitments and progress milestones for its own operations, including an expansion of its carbon neutrality plans and the procurement of all its electricity from renewables.

Conservation charity ZSL has found that only 13% of the world's 100 most significant forestry companies operating in tropical forests actively monitor for deforestation in the areas they manage. According to the analysis, over half have not publicly committed to protect biodiversity and only 37% provide evidence of conservation such as restoring river habitats or planting native species in degraded areas. More detail is available here.

New research from MSCI into corporate bond performance shows that ESG corporate bond indexes showed greater resilience when compared with their non-ESG parent indexes, helping to mitigate drawdowns during the first quarter of 2020. Despite increased issuance and economic uncertainty, corporate bonds staged a significant recovery from the lows of March, the research said.

Brunei Darussalam has announced a new carbon pricing mechanism which will be introduced by 2025. The mechanism will be the main pillar of its strategy to cut greenhouse gas emissions by 50-60% by 2035. 

Divest Parliament has published an open letter to Pension Minister Guy Opperman, rebutting his advice to investors to engage with fossil fuel companies instead of divesting them. The letter, signed by more than 60 civil society leaders, criticises Opperman’s decision to ignore the “clear moral, scientific and financial arguments for fossil fuel divestment”. The full letter can be read here.

Morgan Stanley has published new research on sustainable consumption trends. The sixth consumption report details evidence of a switch from meat to plant-based proteins, a trend towards reducing personal food waste, and a growing interest in sustainable or eco-friendly packaging.