ESG Round-Up: Enel to exit Russia in “matter of months”, CEO says

The latest developments in sustainable finance: Central Bank of Singapore to partner with CDP, Finance for Biodiversity Pledge adds five signatories, Colorado state pension fund exits Unilever over Israel ban.

Enel, Italy’s largest utility, will exit its Russia operations in a “matter of months”, CEO Francesco Starace said today 21 March. The Italian company joins other large energy companies – including BP, Shell and Italy’s Eni – that announced plans to exit Russia following sanctions against the country after it invaded Ukraine. Finnish utility Fortum Oyj and French energy giant Total both stated earlier this month that they will halt all new investments in Russia without committing to a full exit. Enel is looking for a handover that won’t disrupt service and will safeguard the thousands of employees that work at its plants, its CEO said. Italy imports about 40 percent of its total gas consumption from Russia.

MAS, the central bank of Singapore, is looking at using carbon disclosure data from the CDP to underpin an upcoming sustainability database for financial institutions in the city-state. According to a newly-signed memorandum, the two will “explore the exchange of information between CDP’s disclosure system and MAS’ Project Greenprint” and implement local “capacity building” training programmes. MAS is planning a total of four digital platforms under Project Greenprint which will provide the Singapore market with access to corporate sustainability data and company disclosures. “We look forward to supporting MAS in ensuring that the Greenprint platforms are developed and operated in line with best practices in environmental reporting and management,” CDP CEO Paul Simpson said on the partnership. The EU published similar proposals for the so-called European Single Access Point in December.

The Finance for Biodiversity Pledge, has added five new signatories reaching a total of over $13 trillion in assets on behalf of 89 institutions. Signatories commit to protecting and restoring biodiversity through their finance activities and investments by: collaborating and sharing knowledge, engaging with companies, assessing impact, setting targets and public reporting on outcomes ahead of 2025. EAB Group, Future Food Fund, Group La Française, Planet A and Société Générale Assurances are the five new joiners.

Colorado’s state pension fund – the Colorado Public Employees’ Retirement Association – will divest its $42 million stake in Unilever after the company’s Ben and Jerry’s subsidiary took economic action against Israel by halting ice cream sales in West Bank settlements in July, The Denver Post reported. The divestment is required by a state law pledging support to Israel and opposing sanctions against the country by international corporations for the occupation of Palestine, the news article said. The pension fund, which manages $61bn in assets, announced last month it would divest its $7.2 million stake in Russia’s Sberbank, in response to the invasion of Ukraine.

AIA Group, a pan-Asian life insurance group with total assets of $340 billion, announced it completed the divestment of directly-managed listed equity and fixed income exposures to coal mining and coal-fired power businesses last October, seven years ahead of schedule. In 2021, AIA achieved a 31.4 percent decrease in the carbon footprint of the company’s directly-managed listed-equity portfolio since 2018. In addition, AIA has investments of $8.6bn in healthcare bonds and $3.6 billion in ESG bonds, representing a 100 percent increase year-on-year, with plans for this to grow materially in the years ahead. The announcement relates to the recent release of AIA’s 2021 ESG report, which also noted that female employees at AIA made up 58 percent of the workforce and 42 percent of its senior leadership. The sustainable investment pillar of AIA’s ESG strategy aims to deliver long-term value by allocating capital to companies that commit to sustainable outcomes and lowering AIA’s exposure to the risk of stranded assets in a future low-carbon economy.