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ESG Round-Up: Asian banks more focused on green products than shifting away from fossil fuels, investor backed group finds

The latest developments in sustainable finance: vote against ‘greenwashing’ bank directors, say Sir Chris Hohn.

A $4.7 trillion investor-backed engagement body focused on Asian fossil fuel lenders has found that just nine out of 32 of the region’s biggest banks have set long-term Net Zero commitments for financed emissions. The Asia Transition Platform, which launched in September and includes big investors such as Legal & General, Dutch pension fund PGGM and Aviva Investors found that banks in China, Japan, Korea, Singapore and Indonesia have been “more proactive in launching green products than in implementing the policies and governance needed to direct capital away from carbon-intensive industries.”  

Meanwhile, billionaire hedge fund manager Chris Hohn has called on shareholders to vote against directors at banks undermining climate commitments through lobbying. “Any bank making a Net Zero promise whilst actively lobbying against necessary climate regulation – such as mandatory disclosure of borrowers’ emissions and climate action plans – is greenwashing,” he said. “Shareholders should vote against the directors of banks who are hiding their exposure to climate risk”. The founder of UK hedge fund The Children’s Investment Fund was responding to a report published today by thinktank InfluenceMap, which accused the world’s 30 largest listed financial institutions – including BlackRock, JP Morgan and HSBC – of undermining their Net Zero commitments with their lobbying activities. Only a third of the group have set “concrete 2030 climate targets”, yet all remain members of industry associations that InfluenceMap allege have “consistently lobbied to weaken key sustainable finance policies in the EU, UK and US”, according to the report. Only BNP Paribas, AXA and Allianz were found to “engaging positively on sustainable finance”.

Japan’s Mizuho Financial Group, one of the financial companies included in InfluenceMap’s study, has endorsed the principles of the Taskforce on Nature-related Financial Disclosures. Mizuho, which was the first Japanese recipient of climate proposal in 2020, said it supported the “TNFD’s objective of supporting a shift in global financial flows toward nature-positive outcome”.  

The £3.5 billion Church of England Pension Board (CEPB) has said it will vote against the chairs of 135 mining companies it claims have failed to review its new safety expectations for tailings dams. The standards were developed as part of the Mining and Tailings Safety Initiative, of which the board is a contributor, set up following the 2019 Brumadinho disaster. CEPB had already stated its intention to vote against the chairs of miners that had not confirmed their intention to meet the Global Industry Standard of Tailings Management, but it has now named those companies. The 135 include South Korea’s Posco.

Chicago has voted to ban the city’s public pension fund from investing fossil fuel assets, Bloomberg reports. The measure, which was put to the vote on Wednesday, was approved by the US city’s Mayor Lori Lightfoot and Treasurer Melissa Conyears-Ervin, manager of Chicago’s $9 billion pension portfolio. It is reported that the vote will not impact the porfolio as the fund’s fossil fuel holdings were divested over the last 18 months in anticipation of the measure being introduced.