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ESG round-up: CofE Pensions Board excluded 28 companies on climate change grounds in 2021

The latest developments in sustainable finance: CDP and Planet Tracker call on financial institutions to do more on water crisis, Pictet Asset Management gets involved in biodiversity research programme.

The Church of England Pensions Board excluded 467 companies on ethical/responsible investment grounds – including 28 related to climate change – in 2021, according to its annual stewardship report. The board also reduced the carbon intensity of its portfolio of investments from 93.6tCO2/$m in 2020 to 74.3 tCO2/$m in 2021, in line with its commitment to achieve net zero by 2050. 

One-third of the 377 listed financial institutions investigated by CDP and Planet Tracker are not assessing how much of their investment portfolios are at risk from the global water crisis, despite $13.5 billion in assets allegedly already stranded in projects that may never be completed. Alongside the need to identify risk, the two organisations recommended that financial institutions create engagement strategies that communicate the need for companies to address the water crisis, as well as put pressure on portfolio companies to support enhanced water disclosures and measure the impact of engagement. 

Pictet Asset Management has been selected as an “impact partner” for a four-year global research programme to help the financial industry develop strategies to protect natural capital and halt biodiversity loss. As part of its role, the investor will “contribute to transdisciplinary research that can help bring about nature-positive changes in the financial system”. The Principles for Responsible Investment and Finance for Biodiversity Foundation have also been chosen as impact partners for the Biodiversity Finance (BIOFIN) programme. 

Mercer has announced a collaboration with risk and return management technology and solutions provider Ortec Finance regarding climate crisis portfolio modelling. Through the partnership, the asset manager will provide its investors with analysis to compare the risks and opportunities of their current allocations with potential allocations to other sectors and asset classes.

T Rowe Price Group has become the latest investor to join the Net Zero Asset Managers initiative. Launched in December 2020, the NZAMI requires signatories to commit to supporting the goal of net zero greenhouse gas emissions by 2050.

The European Securities and Markets Authority (ESMA) has extended the deadline for candidates to express interest in becoming a member of its Consultative Working Group (CWG). The group will support ESMA’s cross-sectoral work in the area of sustainable finance under the auspices of its Coordination Network on Sustainability. Individuals now have until 11 May to apply.

At the end of April, the Financial Stability Board (FSB) launched a consultation on supervisory and regulatory approaches to climate-related risks. The consultation closes on 30 June, with final recommendations set to be published in Q4 2022.