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Daily ESG Briefing: Vanguard named as ‘world’s largest coal investor’ in report

The latest developments in sustainable finance

Vanguard has been accused of being the “largest institutional investor in the coal industry” in a report by 29 NGOs including Urgewald, Reclaim Finance and Rainforest Action Network. The study analysed financial flows to 934 companies in the thermal coal value chain, finding that, in January 2021, 4,488 institutional investors held more than $1trn in such companies, combined. Vanguard allegedly had more than $86bn in the industry, with BlackRock coming in second with $84bn. Altogether, US investors hold 58% of investments in global coal, the NGOs say, followed by Japanese investors. Japan’s Government Pension Investment Fund was accused of having $29bn in shares and bonds in the 934 companies analysed. UK investors were also namechecked in the report for their high exposure, at $47bn collectively. The study found that commercial banks were also providing more money to the coal industry in 2021 than in 2016. Of the 381 banks lending $315bn to coal in the past two years, the biggest were named as Japan’s Mizuho ($22bn), Sumitomo Mitsui ($21bn) and Mitsubishi UFJ ($18bn). 

Dedicated ESG investor Calvert saw $1.6bn in inflows in the three months to January 31st, according to a report from its parent company Eaton Vance. The latest results show that the US-based firm finished January 2020 with just shy of $22bn of assets under management, and this grew to nearly $31bn within a year – representing a higher proportion of growth than any of Eaton Vance’s other three, non-ESG affiliates. 

Three quarters of emerging market countries have improved their ESG scores according to analysis by NN Investment Partners. The Dutch firm, which runs some €18bn in emerging markets strategies, looks at topics such as corruption, transparency and public health standards, to conduct the assessment. It found that 56 countries were improving their ESG scores, including Malaysia, Croatia, Kenya and Pakistan. 

Standard Ethics has downgraded its ratings of Siemens Gamesa, the renewable energy arm of Siemens, over corporate governance concerns and “a noticeable decline in the principle of gender equality” within the firm’s board of directors. “In view of Siemens Gamesa's growing importance internationally, as well as its market share and the presence of a controlling shareholder, any implementations in corporate governance would be welcome and would also improve independence within the Board of Directors,” Standard Ethics said in a note that outlined the downgrade from an EE rating to EE-. 

Power and gas companies that support the EU’s plans for science-based thresholds in its green taxonomy are “significantly outperforming their peers on stock markets”, claims a study from InfluenceMap. The think tank says a comparison of the share price performance of 15 major firms operating in the EU between 2019 and 2021 shows “supportive power and gas companies have recorded growth in their market capitalization of between 62% and 197%, whereas companies opposed to the recommended CO2 thresholds have recorded market cap changes of between -40% and 31%.”