Daily ESG Briefing: Westpac and Allianz make new moves on coal

The latest developments in sustainable finance

Westpac has committed to exit coal mining by 2030, in its updated climate strategy. Its emissions-intensity target for lending to power generation has been reduced to a level which is likely to also make it difficult to finance new gas plants. 

Allianz has also updated its coal insurance restrictions so that it will no longer offer property and casualty insurance for coal-heavy companies that do not have a clear exit path from 2023.

Los Angeles Capital has joined Climate Action 100+ as part of its efforts to step up on its active shareholder engagement efforts, it has announced. The $20.5bn investment firm did not disclose if it would be leading on any target companies as part of its involvement in the initiative. 

New research from the Transition Pathway Initiative (TPI) has revealed just two of the ten largest mining companies, Freeport and Grupo Mexico, are aligned with limiting climate change to 2°C. TPI’s research shows that Glencore and Anglo American are currently aligned, but their emissions pathways are too flat to keep them in alignment by 2050, while stated net zero ambitions from BHP, Rio Tinto and Vale only cover operational emissions. Fortescue and South32 have yet to set credible long-term targets and need to cut their overall carbon intensity by nearly 80% by 2050 to claim alignment, the report said.  

The Italian Sustainable Investment Forum has highlighted seven sectors where responsible investors can play a crucial role in enabling economic recovery after COVID-19. The plan’s pillars include encouraging investments in renewable energy, enhancing the value of services and impact investment in the social and healthcare spheres, fostering green digital innovation, enhancing financial education, and boosting international collaboration among financial players.

The Climate Bonds Initiative (CBI) has launched a new public consultation on its Shipping Criteria. Due to close on June 26, the consultation is open to experts and stakeholders from the shipping sector.

Moody’s has published its Q1 update on sustainable finance, revising down its $400bn forecast for 2020 sustainable bond issuance on the back of COVID-19. It expects $100bn of social and sustainability bonds in response to coronavirus. 

Citi Bank has released its first ESG report, in which it claims to have smashed through its $100bn Environmental Finance Goal four years ahead of schedule, having already facilitated $164bn of green finance. As well as highlighting existing products and lending programmes that support its ESG objectives, the bank outlines plans for loans for affordable housing projects, improvements to company diversity and increased investment in ethical AI. The full report is available here

CGLytics’ third FTSE 100 proxy research report highlights how proxy advisors have updated their voting guidelines in response to COVID-19, and identifies key issues likely to impact 2020 AGMs. It looks at the executive compensation practices of FTSE 100 companies in 2019 and reactions from shareholders, and addresses how the new Corporate Governance Code and EU Shareholder Rights Directive will impact listed companies.