ESG round-up: HSBC slammed for $340m German coal loan

ESG round-up: Low climate adaptation funding could cost emerging markets $370bn; Singapore central bank introduces tenure limit for company directors.

HSBC is facing criticism for lending $340 million to German energy company RWE for the expansion of an open-case coal mine. A report by the Bureau of Investigative Journalism revealed that the loan was issued last spring, three months after the bank pledged to stop financing the expansion of thermal coal products and phase out funding for coal-fired power and thermal coal mining. HSBC had not responded to a request for comment at the time of publication.

Lack of climate adaptation funding could cost emerging markets around $370 billion in climate damages and lost GDP growth by end-2030, according to research by Standard Chartered. The Adaptation Economy report found that for 10 markets – including China, India, Bangladesh and Pakistan – a minimum investment of $30 billion this decade will be required to avoid the projected damages, based on a 1.5C temperature rise scenario. India and China are projected to benefit the most from climate adaptation projects.

Singapore’s central bank has introduced a nine-year tenure limit for company directors, as well as mandatory remuneration disclosure for directors and company CEOs. The rule change follows a public consultation and a supporting review by the bank’s corporate governance advisory committee. The regulator said that the new rules are in line with global best practices and are “important steps to further strengthen director independence, encourage board renewal and improve market transparency”.

The Philippines’ financial regulator will require local ESG funds to have at least two-thirds of their AUM invested in sustainable assets. The rule, which was published last week, includes new disclosure hurdles for ESG asset managers and regulatory guidance on best practice, and comes into effect immediately. As with the EU’s Sustainable Finance Disclosure Regulation, managers will be allowed to define their ESG objectives under the new regime. This approach has led to confusion in the EU, and the European Commission is currently under deadline to provide a regulatory definition of the term.

A Catholic investor alliance, led by Bank für Kirche und Caritas, has paused its engagement with official Brazilian bodies following President Lula’s election in October. The Catholic investor alliance has been pressuring the Brazilian government to protect the Amazon rainforest and the rights of indigenous communities since March 2021. Tommy Piemonte, head of sustainable investment research at the bank, said: “Many of the action plans we have been calling for are on Lula’s political agenda and some have already been initiated. We very much welcome these measures that have been started.” The alliance will conduct a mid-year review to track progress and determine where there might be room from improvement. It will also continue its engagement activities against illegal gold mining in the region.

Biodiversity analytics company NatureAlpha has collaborated with the Integrated Biodiversity Assessment Tool (IBAT) to provide asset owners and asset managers with a platform for biodiversity data. IBAT – an alliance between the UNEP, the International Union for Conservation of Nature, BirdLife International and Conservation International – has three global biodiversity datasets, which will be integrated into biodiversity and nature metrics for investors. The metrics will also allow investors to report in line with the Taskforce on Nature-related Financial Disclosures framework.

The US national blueprint for transportation decarbonisation has been jointly announced by energy secretary Jennifer Granholm, transportation secretary Pete Buttigieg, housing and urban development secretary Marcia Fudge, and environmental protection agency administrator Michael Regan. This follows the signing of a memorandum of understanding last September to accelerate the US’s affordable clean transportation development. The MoU called for the agencies to release a strategy for decarbonising the transportation sector, which the blueprint outlines.

The Investor Forum has published a third update to its collective engagement framework. The review focused on evolving practice in dialogue between companies and shareholders on ESG issues, with a review of UK market abuse regulations, updated regulatory guidance from the US Federal Reserve, and an additional chapter describing the protocols for the forum’s activities.

Neuberger Berman has joined the UK Sustainable Finance Forum’s membership. UKSIF’s members include banks, fund managers, asset owners, financial advisers, data providers and charities.