Daily ESG Briefing: Vanguard, BlackRock, American Funds among least supportive of diversity and social justice resolutions, says Morningstar

The latest developments in sustainable finance

Vanguard, BlackRock and American Funds were amongst the five least supportive shareholders when it comes to resolutions on diversity, equity & inclusion (DEI) and social justice issues, according to a new report by Morningstar’s Director of Sustainability Stewardship Research, Jackie Cook. In How Did Fund Companies Use Their Proxy Votes to Tackle Racial Inequality in 2020? Cook found that across the board, the 20 largest US fund providers voted for 40% of the 48 key resolutions that had a strong bearing on racial inequality. The strongest support came from TIAA Funds, the 16th largest fund company in the US, which supported 35 of the 47 resolutions.

Fitch Ratings has assigned a further 380 ESG Relevance Scores, assessing the extent to which ESG risks affect issuer credit ratings, to financial institutions. The new scores are in addition to more than 1,000 the ratings agency has already assigned to banks, insurance companies and non-bank financial institutions.

The Food Foundation is calling on investors to introduce expectations for food businesses to set targets for, and report on, sales of healthy and sustainable food. The recommendations follow the charity’s recent report Plating Up Progress, which found that out of 11 supermarkets assessed, only four have set targets to report on percentage sale of healthier options, fruit and veg or plant-based products. Of the major restaurants and caterers analysed, only 20% have published targets or data on either the percentage of food sales that are healthy or increases in fruit and veg sales.

A group of 13 development banks has committed to strengthen investments in food and agriculture in the context of a global pandemic and climate change. The banks cover a number of countries and regions, including Mexico, Africa, Nepal, Afghanistan, El Salvidor and Samoa. “We need to act now and step up financing if we want to free the world from hunger and poverty by 2030,” said Gilbert F. Houngbo, President of the UN’s International Fund for Agricultural Development. 

Meanwhile, a study shows that no Multilateral Development Banks are fully aligned with the Paris Agreement, despite their commitments. A new tool from UK-based think tank E3G uses 15 metrics to assess the degree of Paris alignment each bank has achieved.

Solactive has acquired a minority stake in green financial technology platform Spark Change as part of a $4.5m funding round led by Barclays. Other investors included FinLab, one of Germany’s largest FinTech-focused VCs. Solactive is a German index provider with a growing number of climate- and sustainability-focused products. 

Green banks have invested over $24bn into low-carbon technologies to date. The are currently 27 operational green banks in the world, with  further 25 potentially in the pipeline, according to research by the Rocky Mountain Institute, UK Green Finance Institute and the Natural Resources Defense Council. The report, State of Green Banks 2020, will help guide the development of the Green Bank Design Platform to support governments and institutions in the establishment of green banks and other green financing vehicles. The report comes as the UN’s Green Climate Fund approved funding for the creation of the Mongolia Green Finance Corporation – a $47.7m green bank that will comply with the recommendations of the TCFD.