ESG round-up: Caisse des Dépôts puts out €4m tender for ESG data

The latest developments in sustainable finance: No common companies in climate funds aligned with 1.5C, says Morningstar; Estonian government approves adoption of ESRS.

Caisse des Dépôts, the investment arm of the French state, has put out a €4.2 million tender for ESG data. The tender comprises seven tranches, including for biodiversity and taxonomy information. Each of the seven contracts, published on Friday, will run for four years and is worth €600,000.

None of the companies mostly commonly included in climate funds is aligned to 1.5C, according to the latest edition of Morningstar’s Investing in times of climate change report. The most popular stocks in broad market climate portfolios are more misaligned than those in portfolios that target climate solutions, with average implied temperature rises of 3.3C versus 2.4C.

The Estonian government has approved the adoption of the European Commission delegated regulation to establish the European Sustainability Reporting Standards. The Ministry of Finance is due to hold an event in October to support companies with the standards and reporting requirements, with the aim of rolling out sustainability reporting standards training and an online tool to understand sustainability issues and collect data by the end of 2025. Around 350 Estonian companies will be in scope for reporting under the Corporate Sustainability Reporting Directive.

Asian asset owners are being invited to join a new net zero working group being set up by the Asia Investor Group on Climate Change (AIGCC). The group, which is set to launch in January, will seek to accelerate the net-zero efforts of investors in the region “in any stage of their climate journey”. AIGCC is one of the partners behind the Paris Aligned Asset Owners (PAAO) initiative. A spokesperson for AIGCC told Responsible Investor that participants in the working group will not be required to join the PAAO but that the capacity building it intends to offer will make them more ready to do so if they choose.

Investors including Local Authority Pension Fund Forum, CCLA Investment Management, La Banque Postale Asset Management and Nordea Asset Management have written to the chairs of 35 high-emitting FTSE350 companies calling for an AGM vote on climate transition plans. The letter, signed by 18 investors representing $1.8 trillion in AUM, urges the firms to arrange a vote so shareholders can “express their view on transition plans through a specific resolution”, rather than voting against the chair or another board member. The French parliament in July passed a Say on Climate law that will require listed companies to put their transition plans to an advisory vote every three years, with an annual vote on the implementation of the strategy. The UK Transition Plan Taskforce has proposed that companies should produce transition plans every three years.

The Global Reporting Initiative has launched an open call for members to join its Global Sustainability Standards Board (GSSB). There are four vacancies starting in January next year for a three-year term. The GSSB is seeking candidates from business and investment institutions, as well as mediating institutions and civil society organisations. Applications close on 3 November.

A group of UK asset owners convened by the Church of England Pensions Board and Brunel Pension Partnership, in partnership with the High Pay Centre, has launched a consultation on the Fair Reward Framework. The group is particularly looking for feedback from those directly involved in shaping pay practices, such as remuneration committee members and chairs, remuneration consultants, shareholders and trade unions. The draft framework is divided into three main sections: company characteristics, pay scrutiny process and reward outcomes. It has been developed over the past year in response to long-standing debates around corporate pay. The consultation is open until 27 October and the final framework will be applied to assess corporate annual reports from December. The draft received input from 11 asset owners including Friends Provident Foundation, Local Pensions Partnership Investments, Nest, Pension Protection Fund, People’s Partnership, Railpen, Scottish Widows and USS.

More than 75 percent of investors surveyed by McKinsey & Co are willing to pay a premium for a company with a better ESG profile than one with similar characteristics but a lower ESG rating. The research found that, while 95 percent of S&P 500 companies issue a sustainability report, very few fully integrate ESG into their equity stories. Eighty-five percent of chief investment officers surveyed stated that ESG is an important factor in their investment decisions, with 60 percent of respondents reviewing their overall portfolio for ESG considerations, and around 80 percent assessing individual company positions in the context of how ESG affects forecasted cashflows.

The Brazilian financial and capital markets association (ANBIMA) has launched a sustainability network to promote the ESG agenda across the country’s capital markets. The forum aims to bring together market professionals, ESG experts and academics to discuss sustainable finance and practical tools for implementing an ESG agenda. The initiative is in response to demand from ANBIMA members for sustainable action to be included in the association’s 2023/24 strategy. The network will focus on four topics: climate change and biodiversity, human rights and Just Transition, financial mechanisms and instruments, and governance and leadership.