ESG round-up: Chile adds social target to new SLB issuance

Bank of England to publish transition plan next week; Columbia Threadneedle, Algebris launch sustainable bond funds.

Chile added a social target to its second sustainability-linked bond on Tuesday, as well as launching an offer to swap existing bonds for SLBs. The country, which was the first to issue a sovereign SLB last year, raised $2.25 billion from a dual tranche deal which was tied to the percentage of women on the boards of companies which report to the Financial Market Commission as well as a GHG and renewable energy target. High demand allowed the country to cut 37 basis points off initial price thoughts on both tranches, with more than 250 investors taking part. In an unusual move, the Finance Ministry also launched an offer to exchange bonds maturing in 2025, 2026, 2028 and 2031 for the new sustainability-linked notes.

The Bank of England has announced plans to publish its transition plan next week. The plan, which draws on the work of the UK’s Transition Plan Taskforce, will see the BoE look to cut its Scope 1, 2 and 3 emissions by 90 percent by 2040. It has already eliminated emissions from electricity generation.

Columbia Threadneedle has launched a global social bond fund for UK investors. The fund, which will be managed by CT’s social bond team led by Tammie Tang, will invest in labelled social bonds as well as issuers which make a positive social impact across seven key social development fields.

Staying with bond funds, Algebris Investments has launched an Article 9 sustainable bond fund. The fund, which will invest in “high quality, resilient companies”, will give investors access to “a wide range of opportunities across several areas critical to sustainable development”, the firm said.

Government ministers held a discussion with UK defence firms and the Investment Association about the impact of ESG investing on the defence industry on Wednesday, according to reports by Sky News. One source cited by Sky said the meeting would look to discuss whether ESG factors are acting as a barrier to defence investment and how these barriers could be overcome. However, Responsible Investor understands the meeting was part of regular industry engagement and was not a “summons”, as Sky claimed.

A spokesperson for BAE Systems said: “We welcome the opportunity to be part of discussions with industry peers and representatives from government on ESG investing in defence.” The IA did not respond to a request for comment.

Only a quarter of the world’s most influential oil and gas firms report their CapEx allocations to low carbon technologies, according to the latest edition of the World Benchmarking Alliance’s oil and gas benchmark. The report found that just 12 of the companies on the list had cut Scope 1 and 2 intensity in line with a 1.5C pathway, with 93 receiving a score of zero on their Just Transition planning.

Schroders subsidiary BlueOrchard has partnered with Global Affairs Canada and the investment arm of the Inter-American Development Bank to launch an impact strategy focused on gender equality in LatAm and the Caribbean. The Article 9 strategy will look to close funding gaps for MSMEs led or owned by underserved groups using a blended finance approach.

Societe Generale has signed an agreement with UNI Global Union covering its entire employee base which sets a new minimum base of entitlements for employees, including 14 weeks of maternity leave and death benefits. SocGen’s group head of HR, Anne-Sophie Chauveau-Galas, said the pair had had a “continuous, positive and fruitful relationship” since 2015. This four-year agreement is the third signed between them.