ESG Daily Briefing: Investment into SDGs falling short, says UN report

The latest developments in sustainable finance

There has been progress on just six investment themes within the 17 Sustainable Development Goals, according to a report by the UN Conference on Trade and Development. The study identifies 10 themes altogether, but says only infrastructure, climate change mitigation, food & agriculture, health, telecommunication and ecosystems & biodiversity have seen progress. The boom in sustainability funds is heavily skewed towards developed countries, it added, especially in areas like renewable energy.

The European Investment Bank has released the second draft of its Climate Bank Roadmap – a guiding framework for its activities on climate action for the next five years. The bank is specifically inviting feedback on the criteria for eligible projects and definitions used to assess environmental and climate performance. In a statement, WWF described the draft as “making a mockery of the EU's Green Deal” for not ruling out new investments in “polluting transport infrastructure” such as motorways and airports.

BlackRock and Australian superannuation fund CBUS are facing scrutiny over their investments in a Chinese firm which could destroy Aboriginal artefacts. China Shenhua Energy, the world's largest thermal coal miner, hopes to construct a mine in New South Wales, but local indigenous owners of the land have filed a submission in the Federal Court to counter its 2015 approval. BlackRock has confirmed it holds around $474m of China Shenhua Energy stock, while CBUS has $4.5m worth of shares through a passive index fund. The latter said it is considering divestment and asking investment managers to incorporate First Nations heritage issues into their engagement.

The Race To Zero campaign has been launched by a worldwide coalition of corporations, investors, and universities to rally leadership and support for a resilient, zero carbon recovery that prevents future threats and creates decent jobs. In the run up to COP26 in November 2021, the campaign joins 120 countries in what it claims is the largest ever alliance committed to achieving net zero carbon emissions by 2050 at the latest.

DWS Research has investigated the climate risk and corporate capex of nearly 900 of the largest global companies, with mixed results. Although only 12% of market capitalization is from companies with high or excessive climate transition risk, these high-risk companies account for 36% of corporate capex. Approximately $650bn of annual capex from carbon intensive companies might need to be reoriented to avoid catastrophic climate change, the research concluded.