ESG round-up: EU standards body recommends wider update of SASB standards to ISSB

The latest developments in sustainable finance: IIGCC, TPI Centre launch net zero standard for banks; Malaysia Exchange to crack down on companies failing to meet board diversity rules.

The EU’s standard setting body EFRAG has recommended ISSB undertake a “much wider update” of the SASB standards, once the global sustainability standards body has completed changes to enhance the international applicability of the widely used framework. Responding to a consultation question on future refinements to SASB, EFRAG wrote: “The ISSB should develop a gap analysis between the SASB standards and sustainability reporting frameworks developed more recently or which are being developed.” Areas for improvement, it added, were disclosure of Scope 3 emissions and use of transition plans on biodiversity.

The Institutional Investors Group on Climate Change (IIGCC) has launched a net zero standard for banks alongside the Transition Pathway Initiative Global Climate Transition Centre (TPI Centre). The standard is built around 10 areas: bank commitments, targets, exposure and emissions disclosure, emissions performance, decarbonisation strategy, climate solutions, lobbying, climate governance, just transition, annual reporting and accounting disclosures. It complements the IIGCC’s net-zero investment framework.

The TPI Centre has also launched a net zero banking assessment framework, which includes a set of measurable indicators, sub-indicators and scoring guidance for assessing the alignment of banks against the Paris goals. The framework was produced by the TPI Centre in consultation with IIGCC and Ceres. The TPI Centre will use the framework to assess 26 global banks across Europe, North America and Asia annually, with the inaugural assessments due to be published this summer.

Bursa Malaysia has said it will take “appropriate regulatory action” against companies that fail to meet the minimum requirement of one female director on their boards by the 1 June deadline. The Malaysian exchange found that currently 24 companies have not yet complied with the requirement and still have all-male boards. In January 2022, the exchange announced the requirement for companies with a market capitalisation of M$2 billion ($434 million; €406 million) as of 31 December 2021 needed to appoint a minimum of one woman board member by September 2022. For remaining companies, the requirement should be complied with by 1 June.

Two working groups overseen by the Japanese markets regulator the Financial Services Agency have published guidance on financial sector initiatives to decarbonise and a common framework for impact investing, which are aimed at financial institutions. Both reports are currently in draft form and will be discussed by working group members prior to their formal publication, expected in June.

In the latest round of exits from the Net-Zero Insurance Alliance, Korean insurer Samsung Fire and Marine Insurance, Japan’s Tokio Marine Holdings, French insurer Matmut, Spain’s Catalana Occidente and UK insurer Beazley have all confirmed their exit from the initiative. Matmut said that it wanted to commend the initiative for encouraging insurers to develop their approach to the climate transition and take steps to reaching net zero. Catalana Occidente has said it will set progressive and science-based targets that will enable it to contribute to climate neutrality and best balance scientific guidelines, risk profiles and decarbonisation trends in the global economy in the best possible way, adding that it will also periodically report on progress in achieving the adopted targets. In a statement, Beazley said that it will continue to support the UN’s Principles for Sustainable Insurance and the SDGs, while remaining “fully committed to a just and orderly transition to net zero”.

CACEIS, the asset servicing banking group of Crédit Agricole and Santander, has launched a guide on biodiversity and nature risk in partnership with the Zoological Society of London. The guidance aims to educate pension trustees on the significance of biodiversity risk in their scheme’s investment portfolios. It also provides information on how to develop policies on biodiversity and nature risks, as well as a questionnaire for trustees to engage asset managers on this.

BankTrack has launched an online complaint platform for the Equator Principles Association framework. The principles – which were launched two decades ago – are a bank-led framework for managing environmental and social risk in project finance. The tool will allow communities affected by large infrastructure projects financed by banks under the principles to raise complaints about environmental impacts and human rights violations they consider have resulted from non-compliance with the framework. BankTrack said it will also support complainants where possible by seeking to ensure their concerns to be addressed by the financiers, and by publishing complaints made.

Nearly one quarter of the UK’s largest listed companies have improved their performance on workplace mental health in the past year, with almost half also recognising the link between financial wellbeing and their employees’ mental health, according to research from CCLA Investment Management. The manager’s corporate mental health benchmark assesses 100 of the UK’s largest listed companies with a combined workforce of five million people on their global approach to mental health. Companies were scored on management commitment policy, governance and management, leadership and innovation, and performance reporting and impact.