ESG round-up: Akademiker Pension divests Italian oil giant ENI

The latest developments in sustainable finance: ISS ESG launches inaugural ESG corporate rating survey; TPR issues first fine under TCFD regs.

Akademiker Pension has excluded ENI from its portfolio after several years of engaging with the Italian oil and gas giant. The €22 billion Danish pension fund first divested several oil companies in 2018 but kept ENI with the aim of changing its climate commitments through active ownership. Investment director Anders Schelde said in a LinkedIn post that ENI showed some “promising trends… but five years later, we just have to admit that it has not been followed up with action”. ENI is currently looking at expanding its production in the Arctic through one of its subsidiaries. Schelde added that the pension fund is ready to invest in an oil companies which is aligned with the Paris goals, but added that “such a company does not exist today”.

The OECD has published a four-step framework for central banks and financial supervisors to identify and prioritise, conceptualise, and assess nature-related financial risks. Published Thursday, the proposed methodological framework aligns with other developments including the work by the NGFS Nature Task Force and the Taskforce on Nature-related Financial Disclosures (TNFD) when it comes to definitions and understanding of the issues.

ISS ESG has launched an ESG corporate rating survey to collect market feedback as it is looking to adapt and align its methodology with evolving regulation. The questionnaire asks for opinions on ISS ESG’s global approach and foundation of drawing on international normative frameworks, voluntary disclosure standards, and regulatory regimes informing the methodology. It then moves on to seek feedback on materiality considerations, different use-cases for the ISS ESG corporate rating and the underlying scores and data which make-up the rating. It also asks about the relevance of existing and emerging ESG issues expected to shape the ESG management, research, investment and stewardship landscape over the months and years ahead. The deadline to respond to the survey is 20 October.

The UK’s pensions regulator (TPR) has issued its first fine under climate change reporting regulations, with Exxon’s pension scheme fined £5,000 for failing to publish its TCFD report. TPR contacted the scheme when it was unable to find the report, which must be made public, and it was published six days later. The scheme’s trustees said it had produced the report by the deadline but an administrative error meant it was not published. Nicola Parish, TPR’s executive director for frontline regulation said “In our role to protect savers, we take climate change requirements extremely seriously. Our case […] shows we will and must act by using the mandatory fining regime. The case serves as a warning to trustees about the importance of having proper governance and oversight where third parties are carrying out tasks on their behalf.”

The Green Finance Institute has expanded to Denmark and Spain with the appointment of two green finance experts, Signe Fosgaard, a former senior ESG manager at Denmark’s Green Building Council, and Eduardo Brunet, who was previously a senior counsel and green energy company Greenward Partners. Together with the UK, the three European GFI offices will collaborate to share key learnings to “tailor financial solutions to local markets, remove barriers to investment and channel more capital into greening buildings”. In Denmark, the GFI has partnered with the World Climate Foundation to work with investors and the wider Danish real estate sector to scale up green real estate investment, initially in Denmark, with a view to expanding into other Nordic and European countries. Over in Spain, the GFI is focusing on increasing the flow of private finance to decarbonise the economy, with an initial focus on the built environment.

Super fund Australian Retirement Trust (ART) has published its net-zero 2050 roadmap, targeting a 43 percent emission intensity reduction by 2030 across specified asset classes. The A$240 billion ($155 billion, €141 billion) super fund has also committed to engaging 100 percent of its priority companies – defined as those which together contribute 70 percent of financed emissions – within its listed equities portfolio by 2030, proposing formal objectives and escalation measures for direct engagements. As of 30 June 2022, ART had engaged 74 percent of its priority companies, either directly, through collaborative initiatives, or through service providers.

The Sustainable Agriculture Initiative Platform has launched a global framework for regenerative agriculture alongside 170 food and beverage companies, including Nestle, Unilever and PepsiCo. The framework – developed in consultation with farmers, academic and NGOs – will assess, monitor and verify farm practices to support the transition towards regenerative agriculture. Key areas of impact include water, soil, biodiversity and climate. More than 20 FMCG companies have already developed and tested the framework across their global supply chains.

The UN has launched a gender finance charter aimed at promoting gender equality in sustainable finance. The Financial Centres for Sustainability (FC4S) network has outlined ten objectives for signatories to factor gender into their decision-making, strategies and operations. The targets include setting representation goals and improving access to finance for women-led or owned companies. The charter also calls on regulators and stock exchanges to publicly share data on gender metrics within financial systems. A total of 21 networks have become signatories, including France’s Institut De La Finance Durable, the Hong Kong Green Finance Association, the City of London Corporation, and the Luxembourg Sustainable Finance Initiative.