ESG Round-up: Californian ESG pension option may be axed after low uptake

The latest developments in sustainable finance: NN IP subscribes to asset owner SDG platform and MSCI downgrades Russia to lowest ESG score

California’s pioneering auto-enrolment workplace pension scheme, CalSavers, has stated that it may have to remove its ESG option “[i]f a suitable replacement option is not identified.” The state-backed scheme made the comment in a Q&A document published yesterday, put out as part of its search for a new manager for the option. CalSavers failed in its attempt to renew with current provider Newton Investment Management, following low uptake among members.

Investors are calling on the US Securities and Exchange Commission’s (SEC) to mandate reporting of Scope 1-3 emissions in its climate disclosure rule for listed US companies, which is expected to be published next week. 75 investors, representing $4.7trn in assets under management, signed US non-profit As You Sow’s letter to the powerful financial regulator.

The ESG research arm of MSCI has downgraded the Russian Government’s ESG rating to CCC, the lowest possible. It follows the research and index giant’s downgrading of Russia from BBB to B at the end of February. According to MSCI, the fresh downgrading was prompted by a “further heightening of Russia’s ‘Economic Environment’ and ‘Financial Governance’ risks based on the widening domestic impact of international sanctions and financial isolation on Russia’s economy.”

Dutch investment manager NN IP has subscribed to Sustainable Development Investments Asset Owner Platform (SDI AOP) data, sold by index provider Qontigo, in a bid to enhance its “ESG data and analytics models” – particularly in the context of the EU’s Sustainable Finance Disclosure Regulation requirements. The SDI AOP platform was founded in 2020 by investor heavyweights APG, AustralianSuper, British Colombia Investment Management and PGGM to advance the standard for investing into the SDGs.

London-based infrastructure investment firm Actis has announced a portfolio-wide 2050 Net Zero target and membership to the Net Zero Asset Managers Initiative. To aid its ambition, the firm has developed a transition tool to identify green investment opportunities as well as “Smart Olive” assets “that have a clear path to decarbonisation”.