Daily ESG Briefing: Vale agrees $7bn Brumadinho settlement, McKinsey to pay $596m over US opioids

The latest developments in sustainable finance

Mining firm Vale has agreed a $7bn settlement with the Brazilian government two years after the Brumadinho tailings dam disaster which killed 270 people. The Minas Gerais Court of Justice, which acted as a mediator, described the agreement as “historic and with global repercussions”. However, campaign groups criticised the figure, which was lower than the $10bn which the authorities were initially seeking, claiming that “Vale comes out winning” in the agreement.

Meanwhile, consulting firm McKinsey & Company will pay $596.5m in compensation over its role in the US opioid epidemic. The firm helped a number of opioid manufacturers including Purdue and Johnson & Johnson to market their painkillers. It is believed 130 Americans die every day from an opioid overdose, and over two million are addicted to opioids.

Research by the EU’s Joint Research Centre has found that the emissions of green bond issuers are reduced by an average of 4% compared to similar non-issuers. When refinancing is excluded, this rises to 8%. Green bonds that were subject to external review led to a reduction of just over 10%.

Moody’s has released its 2021 sustainable finance forecast, which predicts that sustainable bond issuance will top $650bn this year, a 32% increase on 2020. The issuance will be composed of approximately $375bn of green bonds, $150bn of social bonds and $125bn of sustainability bonds. This is expected to represent 8-10% of total bond issuance.

The CEO of the UK’s Pensions Regulator has said that trustee consideration of climate change factors in their investment strategies is “frankly not good enough.” Speaking at a Q&A event, Charles Counsell was responding to figures released by TPR which found that 21% of the country’s defined contribution schemes said climate change wasn’t relevant to their strategies, while only 43% said they were considering climate change.

Canadian climate consultancy Mantle314 has rebranded itself as Manifest Climate. Its construction division will operate as a standalone company called Mantle Developments.