ESG round-up: CDP to incorporate ISSB climate disclosure standard

The latest developments in sustainable finance: InfluenceMap ranks 'obstructive' firms; ECB says climate work 'crucial' for pricing stability.

The Carbon Disclosure Project has announced plans to incorporate the ISSB‘s climate-related disclosure standard into its disclosure platform. The standard, currently being finalised, will be incorporated into CDP’s existing questionnaires, against which 18,700 companies, representing roughly half of global market cap, disclose. CDP said the move would rapidly accelerate adoption of the standard.

InfluenceMap has published its annual corporate climate policy footprint report ranking the world’s most obstructive companies on climate policy engagement. The research outlines how companies sought to capitalise by pushing for oil and gas expansion amidst the Ukraine invasion. The 10 companies named as having the most negative influence on climate policy are Chevron, ExxonMobil, BASF, ConocoPhillips, Sempra Energy, America Electric Power, Southern Company, Nippon Steel, Gazprom and Toyota.

In response to the findings, a spokesperson from BASF said: “BASF has reduced its emissions of greenhouse gases by 50 percent since 1990 while doubling its production. We support the Paris Climate Agreement and have set ourselves ambitious goals. We want to reduce our CO2 emissions worldwide (Scope 1 and 2) by 25 percent by 2030 compared with 2018, and our 2050 target is net-zero emissions. We have engaged with InfluenceMap in the past and hosted a visit to our site in Ludwigshafen, Germany, in 2019, during which we provided information on our carbon management and our new strategy.” Responsible Investor has reached out to the other companies for comment.

ECB president Christine Lagarde has described the bank’s work on climate change as a crucial part of keeping prices stable. Lagarde said: “Extreme weather events can damage infrastructure, ravage harvests and disrupt supply chains. This can push up prices for key products and thereby fuel inflation, making it tougher for us to keep prices stable. By contrast, reinforced efforts to shift our energy supply towards more economical renewables should ultimately help to slow inflation.” Ultimately, said Lagarde, monetary policy needs to account for climate change. The ECB recently announced plans to green other areas of its operations, including its asset purchase programme and collateral framework, and has warned that EU banks may see their minimum capital requirements increase if they do not adequately manage climate risk.

Eurosif, Europe’s sustainable investment body, has added two new members: Sweden’s Sustainable Investment Forum (Swesif) and Finland’s Sustainable Investment Forum (FINSIF). The two countries will join seven other sustainable investment forums across Europe.

A majority of S&P 500 companies are reporting that more than one third of their board positions are filled by women, according to ISS ESG research. Women were also found to occupy key leadership roles on the boards of more than 75 percent of the S&P 500. Ethnic diversity on boards has also improved from 95 percent to 99 percent of firms which have at least one ethnically diverse board member. However, voluntarily disclosed Equal Employment Opportunity Commission data suggests that the pipeline of underrepresented individuals in executive and senior-level positions across gender and racial and ethnic diversity may be limited.

Almost half of financing for construction and hospitality companies in Qatar has been provided be European banks, pension funds and insurance companies, according to a report by Fair Finance. In the build-up to the World Cup, there have been multiple reports of human rights violations and abuses in the construction of the stadiums, but the report says no questions have been asked by European investors. Of the total $85.7 billion loaned by European companies, Deutsche Bank accounts for 42 percent of the financing.

Moody’s Investors Service has published a request for feedback on a proposed framework for providing net-zero assessments for non-financial corporates’ carbon transition plans. The suggested initiative would be scored on a five-point scale ranging from the highest score NZ-1 to the lowest NZ-5. The results will reflect the strength of a carbon transition plan relative to a global net-zero 2050 pathway, consistent with the Paris 1.5C goal. Companies will be rated on two factors: an ambition score which assesses the amount of emissions cuts targeted by the entity, and an implementation score which measures the likelihood of targets being achieved based on the company’s governance and plans. The RFF period will close on 31 January.

Aviva has launched its first Climate-Ready Index, ranking G7 economies on their contributions to climate action. The framework measures how influential G7 nations and Ireland are progressing on climate mitigation, environment and adaptation, economy and business, and social. The index found that Germany, France and the UK ranked in the top three for climate action, followed by Japan, Ireland, Italy, the US and Canada. Aviva has called on the UK government and financial institutions to increase action on climate by ensuring countries have binding net-zero commitments, guaranteeing regulators incorporate climate risks, building climate resilience, protecting nature, and enhancing international cooperation.