ESG round-up: Barclays commits to halting oil sands financing

Barclays has updated its energy policy to halt financing for oil sands exploration and production companies, as well as for the construction of new oil sands exploration or pipelines. The bank has also expanded its commitment to phasing out financing to clients engaged in coal-fired power generation by 2030 to include the OECD regions. The previous policy was for the UK and EU countries only.

Senior Indian Congress leader Jairam Ramesh has written to the Reserve Bank of India governor Shaktikanta Das and chair of the Securities and Exchange Board of India Madhabi Puri Buch requesting an investigation into allegations of financial irregularities and stock manipulation against Adani Group. Ramesh asked the RBI and SEBI “to ensure that excessive debt exposure by the Adani group does not destabilise India’s banking system”. He called on them to examine the true exposure of the Indian banking system to the Adani group, including explicit and implicit guarantees that the group will be bailed out by local banks if foreign funding is cut off.

Staying with Adani, MSCI has delayed the index weightings assessment update for Adani Total Gas and Adani Transmission to its May benchmark review. In an announcement, the index provider said the decision had been made “in light of potential replicability issues due to impact from price limit mechanisms in specific securities associated with the Adani group”. The reversal of the updates is due to be shown in the MSCI Index Product files starting from 16 February.

Florida governor Ron DeSantis has proposed legislation to prevent ESG investing in order to “protect Floridians from the woke ESG movement” in the financial sector. In an announcement this week, he said: “By applying arbitrary ESG financial metrics that serve no one except the companies that created them, elites are circumventing the ballot box to implement a radical ideological agenda. Through this legislation, we will protect the investments of Floridians and the ability of Floridians to participate in the economy.”

The legislation will prohibit large financial institutions from “discriminating against customers for their religious, political or social beliefs – including their support for securing the border, owning a firearm, and increasing our energy independence”. It will also ban the use of ESG in all investment decisions at state and local level, stop all state and local entities “from giving preference to or requesting information about ESG as part of the procurement and contracting process”, and prohibit “the use of ESG factors by state and local governments” when issuing bonds.

Utah attorney general Sean Reyes has led a 27-state letter asking the US Senate to exercise Congressional Review Act authority to stop ESG investing with Americans’ retirement savings. Reyes wrote: “Not only are these practices problematic for using people’s retirement savings to advance causes they disagree with, but ‘multiple studies’ have found that ‘ESG investing’ reduces returns. [The Employee Retirement Income Security Act] protects the retirement savings of over 152 million workers and $12 trillion in assets – the rule instead threatens the financial security of Americans.”

The attorneys general filed a lawsuit in January asking Congress leaders to oppose a 2022 Department of Labor rule that allows asset managers to consider ESG factors when making investment decisions and exercising shareholder rights.

Fifty investors with $10 trillion in assets have launched an initiative to tackle chemical pollution. The group – which includes Aviva Investors, Storebrand, AXA Investment Managers, EOS at Federated Hermes and Robeco – has launched the Investor Initiative on Hazardous Chemicals to engage with major chemical companies on the management of hazardous chemicals and transparency.

AXA Investment Managers has aligned the remuneration of senior executives to its ESG ambitions. From this year, the compensation of around 400 people will relate to ESG metrics, including the weighted average carbon intensity to reach the target of a 25 percent reduction in carbon intensity for the corporate portfolio by 2025; an AUM target for 50 percent of the real estate portfolio to be aligned to the carbon risk real estate monitor trajectories by 2025; and the reduction of the corporate operational CO2 footprint, to reach the interim target to reduce it by 26 percent by 2025. Progress on these targets will be reported annually from 2023.

The European Banking Authority has launched an industry survey to elicit input from credit institutions on their green loan and mortgages, as well as market practices related to these loans. The results of the survey will be used to advise the European Commission for its strategy for financing the transition to a sustainable economy. The deadline for responses is 7 April.

ESG risk management software firm Datamaran has renewed its agreement with the IFRS Foundation for the use of strategic infrastructure software. The firm has signed a two-year deal.

Fidelity International has outlined its key priorities for sustainable investing for 2023. The investment manager has highlighted active ownership, natural capital and the Just Transition as focus areas.