ESG round-up: HSBC AM pledges to transition away from thermal coal by 2040

The latest developments in sustainable finance: JPMorgan and Wells Fargo due to leave SFOF, UN chief calls for tax on polluters.

HSBC Asset Management has announced a new policy to phase out thermal coal from its investments. The asset manager has committed to working with companies to support the transition across EU and OECD markets by 2030 and globally by 2040. Firms that do not show evidence of plans to move away from the industry within the planned timeframe could see divestment. This latest development contributes to HSBC AM’s commitment to the Net Zero Asset Managers’ Initiative.

JPMorgan CEO Jamie Dimon and Wells Fargo CEO Charles Swarf have said that they will “probably” cancel their State Financial Officers Foundation (SFOF) membership after Illinois congressman Sean Casten informed them that the organisation “is spreading disinformation and blocking the capital sector from freely allocating capital”. Both CEOs said they were unaware their firm was funding SFOF but that they would halt their support if Casten’s accusations are true. In June, Responsible Investor revealed the involvement of leading financial institutions with the group, which has emerged as one of the drivers of the anti-ESG movement in the US.

UN Secretary-General António Guterres called for a windfall tax on fossil fuel companies in an urgent appeal to the General Assembly on Tuesday. He said: “Our world is addicted to fossil fuels. It’s time for an intervention. We need to hold fossil fuel companies and their enablers to account. That includes the banks, private equity, asset managers and other financial institutions that continue to invest and underwrite carbon pollution.” He added that the money raised should be used to support society’s poorest and most vulnerable groups, which are being impacted the most by the effects of climate change.

The Japanese Ministry of Economy, Trade and Industry (METI) has released due diligence guidelines on human rights in responsible supply chains following the closure of a three-week consultation period. The government has officially adopted the guidelines and METI will actively publicise the initiative and ensure the progress of respect for human rights in Japanese businesses.

New York City comptroller Brad Lander and mayor Eric Adams have announced plans for the city’s first sale of social bonds. An inaugural deal is scheduled for October and will raise around $400 million, which will support more than 3,000 units of affordable and safe housing.

A climate data steering committee launched by French president Emmanuel Macron and former New York mayor Michael Bloomberg has recommended developments including company and financial institution-level data for direct emissions, transparent reports on net-zero targets and openly accessible statistical classification information. Announced in June, the initiative aims to advise on the creation of an open-data public platform that will collect, aggregate and standardise net-zero climate transition data based on private sector climate commitments. A public consultation on the design of the platform is underway and will end on 20 October. Other ongoing initiatives in the area include OS-Climate and the upcoming European Single Access Point.

The Nature Conservancy (TNC) has announced its third global debt conversion in Barbados. The deal, which is led by Credit Suisse and CIBC FirstCaribbean, will unlock around $50 million for environmental and sustainable development projects, and forms part of TNC’s blue bonds for ocean conservation strategy. The transaction is also aligned with the 30×30 campaign, which seeks to safeguard 30 percent of the world’s ocean, lands and freshwater by 2030.

RMI’s Centre for Climate-Aligned Finance is due to launch the Sustainable Steel Principles (SSP) at Climate Week NYC on Friday. The SSP’s founding signatories will outline the first climate-aligned finance agreement for lenders to the global steel sector. The initiative was launched in May 2021 by Citi, Goldman Sachs, ING, Société Générale, Standard Chartered and UniCredit.

A new report from the Taskforce on Nature Markets has found that the biodiversity industry is currently valued at $7 trillion, which is equivalent to 8.6 percent of global GDP, and that more than half of the total value is from agricultural production.

As You Sow, a shareholder advocacy non-profit, has published a report with findings on increasing shareholder ESG advocacy. Of the 196 engagements put forward, 99 were escalated, with 79 shareholders filing resolutions and around two-thirds of cases being successfully withdrawn. Shareholders voted on 32 proposals, and a record 10 majority votes and 41.1 percent median support were recorded. Of the 15 resolutions challenged at the SEC, only one was omitted by the regulator. The engagements addressed issues including climate change, DEI, racial justice, plastics, political spending, biodiversity, corporate misalignment with investing, and governance.