ESG Briefing, March 29: Finnish pension fund Keva seeks support with ESG analysis

The round-up of the latest ESG developments

Environmental

Keva, Finland’s €51.9bn local government pension institution, is seeking an “integrated ESG analysis system” to “supplement” its current portfolio tools, according to a tender document. The new system, which will be used to analyse ESG data for both equities and fixed-income instruments globally, will include the ability to analyse carbon footprints at company level and portfolio level. The value of the contract was not disclosed. The deadline for applications is May 4.
C40 Cities Climate Leadership Group (C40), the climate focused NGO representing over 90 cities, has put out a £6m tender document for “environmental issues consultancy services”, to support its city-focused “climate action plans”. It plans initially to target 15-20 cities located across South America and South East Asia. According to the tender document C40 is expecting to receive funding from both the UK Government’s Department for Business, Energy, and Industrial Strategy (BEIS) and the Danish Government’s Ministry of Foreign Affairs to support its work.
European NGOs challenged Santander’s climate policy at the bank’s AGM last week (23 March), calling for an end to its financing of projects and companies in the coal sector. The demand came from the International Institute for Law and the Environment, BankTrack, ShareAction and the “Development YES – Open-Pit Mines NO” Foundation. With Santander lagging behind the majority of its European competitors in terms of climate policy, the NGOs asked that the bank commit to coal divestment, banning both direct financing of projects and those made through Polish bank BZ WBK, of which Santander is the main shareholder.
Pimco has published its first annual report detailing its integration of ESG factors in its investment process and its engagement work. The report provides case studies on how the fixed-income giant incorporates ESG into its corporate and sovereign bond research. The issue of measuring carbon risk in fixed income portfolios is also discussed.
Atlanta has become the first US municipality to be awarded a publicly-offered Environmental Impact Bond (EIB) for green infrastructure projects, which will be used to improve the resilience of infrastructure in neighbourhoods prone to flooding. The deal is structured by impact investment advisory firm Quantified Ventures in partnership with Neighbourly, an online investment platform for civic projects, and supported by the Rockefeller Foundation. It will be led by the Department of Watershed Management, which has identified eight projects to help improve wastewater and stormwater management, at an estimated cost of $12.9m.h6. Social

The Global Impact Investing Network (GIIN), the US non-profit, has published a roadmap to a “more inclusive and sustainable financial markets”. The Roadmap for the Future of Impact Investing: Reshaping Financial Markets identifies six categories of action required and for each describes the specific actions needed, which stakeholders should take the lead, and a timeframe.
Women in banking face not one but two ‘glass ceilings’, research from the SKEMA Business School Observatory on the Feminisation of Companies has found. The first comes when being promoted to management, it says, while the second comes when trying to reach executive roles. While women represent 52% of banking sector employees globally, just 38% of middle managers and 16% of executive committee members are female. The report analysed employees in 71 banks across 20 countries.
Low-income households will work with the Big Lottery Fund and the Department for Digital, Culture, Media and Sport (DCMS) to conceive a £55m scheme to improve access to financial services and products. The financial inclusion fund is financed out of the £330m released recently by the Government from dormant accounts to put towards good causes. Tracey Crouch, Minister for Sport and Civil Society, said: “This funding will benefit some of the most vulnerable in society by helping them access the right financial services when they need it most.”

Governance

ESG research house Vigeo Eiris has downgraded Facebook’s ESG scores amid recent allegations relating to political consulting firm Cambridge Analytica. Accused of failing to protect users’ private data and inform them of Cambridge Analytica’s access to the data, Facebook has seen its already weak overall ESG score (25/100) downgraded further, according to Vigeo Eiris’ methodology. The score was docked 19 points on ‘Respect of Fundamental Human Rights’ and 10 points on ‘Audit & Internal Controls’. It continued to score 0 on ‘Information to Clients’ – a section of ‘Business Behaviour’ in the methodology.
A survey aimed at delivering the “ultimate report on professionals working in the corporate responsibility and sustainability field” is inviting employees in the sector to share their experiences. The 2018 Corporate Responsibility & Sustainability Salary Survey asks contributors to share their salaries and benefits, responsibilities and backgrounds, in efforts to monitor aspects such as diversity and the gender pay gap. The five-minute survey can be found here.