ESG round-up: ‘Broad consensus’ for Aussie taxonomy

The latest developments in sustainable finance: ShareAction launches Say On Climate framework; Californian climate bill passes first hurdle.

The Australian Sustainable Finance Initiative (ASFI), Australia’s industry-led sustainable finance body, published on Monday an update on its sustainable finance taxonomy work. The new “framing paper” reveals that draft recommendations put out for consultation by the ASFI in December attracted a “broad consensus” of support among the 56 written submissions received. AFSI expects to kick off the development phase of the taxonomy this year, according to Monday’s update.

Staying in Australia, last week saw the launch of a non-partisan parliamentary group tasked with engaging with investors and companies on transition efforts, including identifying “legislative and regulatory opportunities to accelerate investment in cleaner technology and infrastructure”. The Parliament House of the Parliamentary Friends of Sustainable Finance was launched with the support of Australian standard setter FSC and the Investor Group on Climate Change.

ShareAction has published a Say On Climate assessment framework in response to the lack of standard methodology for assessing banks’ transition plans. The guidance draws on the NGO’s biennial banking survey, which ranks the largest European banks on their climate performance. ShareAction has suggested engaging with banks directly on their climate and biodiversity strategies, ranking banks on their climate change and biodiversity performance, publishing research on specific aspects of banks’ climate strategies, and partnering with stakeholders. The framework would see banks assessed on net-zero targets, carbon-related disclosures, fossil fuel policies, oil and gas policies, integration of climate-related risks, executive remuneration and lobbying transparency.

Staying on ShareAction, the NGO has called on investors to engage with the pesticides industry, which it says is “fuelling the global biodiversity crisis”. It has urged the industry to significantly reduce the volume and impact of pesticides produced and move towards a more sustainable food system. Katie Leach, head of biodiversity at ShareAction, said the NGO plans to create a collaborative investor engagement campaign to challenge the impact of pesticide companies. She added that ShareAction will start by developing a briefing as to why investors should apply pressure to these companies, and then apply its existing toolkit to co-ordinate groups of investors on engagement.

The Climate Corporate Data Accountability Act has passed the California Senate’s environmental quality committee. The bill – which would impose some of the widest ESG reporting requirements in the US – is being presented to the judiciary committee for a second hearing. If passed, it will require companies with revenues in excess of $1 billion and based in California to track and report their Scope 1, 2 and 3 carbon emissions, impacting around 5,400 companies.

Nordic investors including Storebrand, KLP and Danske Bank have called on Norwegian prime minister Jonas Gahr Støre to engage with energy company Equinor on its climate plans, according to a local press report. The investors said they expect the company to adhere to the same climate reduction targets as the Norwegian government, namely to cut 55 percent of emissions by 2030 and contribute to the Paris 1.5C goal. The Norwegian government owns 67 percent of Equinor. Storebrand, KLP and DNB AM each have a holding of around 0.5 percent.

Planet Tracker has launched a roadmap on global food systems, calling for urgent transformation that the NGO says would cut global emissions by 20 percent and deliver $1.5 trillion in economic benefits. It has recommended six actions for financial institutions including fully traceable supply chains, halving food loss and waste, halting deforestation funding, cutting agri-methane emissions by 45 percent, encouraging regenerative agricultural systems and investing in alternative proteins.

Rathbones has launched its fourth votes against slavery engagement, securing support from a record 132 investors with total assets of £8.17 trillion ($10 trillion, €9.28 trillion). Last year Rathbones – on behalf of the Votes Against Slavery investor grouping – contacted 44 FTSE 350 companies that had fallen short of the reporting requirements, and 41 have now become compliant. The 2023 engagement, led by the Rathbones stewardship team and co-ordinated through the PRI Collaboration Platform, will target 29 FTSE 350 companies.

The French SIF has convened a coalition of investors to tackle forced child labour across the world. The €3 billion investor group – which includes Amundi, AXA Investment Managers and La Banque Postale Asset Management – has been created to ensure greater vigilance around populations exposed to these risks across company value chains in accordance with the French duty of vigilance law.

BNY Mellon has collaborated with Arjuna Capital to accelerate the bank’s climate strategy. For the past 15 years, BNY Mellon has reported annually through its Enterprise ESG Report, using standards and frameworks such as the Global Reporting Initiative Standards, the TCFD and the UN Global Compact.

Fintech start-up Tulipshare has launched a global platform to boost retail investor AGM turnout. “Pledge your share” will enable any investors with exposure to US stocks to exercise their shareholder rights, even if Tulipshare is not their primary broker. Data from Tulipshare shows that 71 percent of US retail investors think companies should be held accountable for the damage they cause to the environment and society, yet only 40 percent have voted at a company’s AGM.

LCP has launched a new responsible investment strategy to help focus industry action on systemic risks posed by climate change and inequality. The UK consultancy has asked managers to use specific company case studies where possible and contribute to principles for assessing responsible investment. It has also asked for asset owners to be open to making “real changes” to investments, see a wider range of managers, and allocate more time to discussing responsible investment.