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ESG round-up: BlackRock teams up with UN to promote gender lens investing

The latest developments in sustainable finance: Japanese regulator establishes taskforce for sustainability reporting; California's Fossil Fuel Divestment bill passes Senate; Vanguard stays close to fossil fuel industry.

BlackRock has signed a memorandum of understanding with UN Women to cooperate in promoting the growth of gender lens investing. The agreement was signed at the World Economic Forum’s 2022 annual meeting in Davos and will see BlackRock develop and launch an initial set of funds over the coming quarters that will be available to a global investor base. UN Women will serve as a knowledge partner and collaborate on data and research. Gender lens investing is defined as the intentional allocation of capital to achieve positive outcomes for women’s empowerment objectives, while also aiming to generate a financial return.

Details of the first meeting of the ISSB’s multi-jurisdictional working group have been published by the global sustainability standards body. The Jurisdictional Working Group, which includes representatives from the US, EU and China, met on 16 May to update on work going on in their regions. The representative for the Financial Services Agency of Japan (FSA), for instance, revealed that it has established a taskforce within the regulator to discuss sustainability reporting. The FSA member also reported that a “preparation committee” had also been formed to “prepare for the creation of the Sustainability Standards Board of Japan”.

California’s Fossil Fuel Divestment Act has passed the Senate and is headed to the Assembly. The bill was put forward by Senator Lena Gonzalez and would require the state’s two major pension funds – CalPERS and CalSTRS – to divest from the 200 largest fossil fuel companies by 2030. Responsible Investor recently reported on multiple attempts by US lawmakers to introduce anti-ESG legislation and threats to divest state assets from companies that boycott oil and gas.

In other US news, Vanguard has rejected calls to end new commitments to fossil fuel industries. In an interview with the Financial Times, chief executive Tim Buckley said Vanguard “does not seek to direct company strategy” and that climate change “is only one factor in an investment decision”. Vanguard is the largest investor in coal companies globally and manages $8.1 trillion for more than 30 million investors. The group has signed up to the Net Zero Asset Managers initiative whose members are committed to reaching net-zero greenhouse gas emissions by 2050 or sooner. So far, Vanguard has only aligned its actively managed assets with net zero by 2050.

The pension schemes of M&S, Royal Mail and Co-op have committed to net-zero targets in line with the Paris Climate Agreement, aiming to halve the emissions of their investments by 2030 at the latest. The British companies have defined benefit pension schemes, whereby the amount paid is based on the years an individual has been a member of the scheme and the salary earned when leaving or retiring.

The UN-convened Net-Zero Asset Owner Alliance has announced a collaboration with the Anthropocene Fixed Income Institute to promote net-zero alignment in global fixed income markets. AFII was founded with the aim to influence the investment decisions made by bond portfolio managers and traders to redirect cost-of-capital in favour of sustainable investments. The collaboration between the two entities is seen as a “timely step in addressing the blind spots in fixed-income”, according to the announcement.