ESG Round-Up: Larry Fink urges shift from ‘brown to light brown’

The latest developments in sustainable finance: ING commits not to provide 'dedicated finance' to new oil and gas fields; Nasdaq launches 'first carbon removal indices'; Infra investors favouring renewables.

Larry Fink has reiterated his view that the climate transition will “require us to shift the energy mix from brown to light brown to light green to green” in his annual letter to BlackRock shareholders. The investment giant’s CEO and Chairman said that the war in Ukraine has prompted a push for more oil and gas elsewhere, which “will inevitably slow the world’s progress toward net zero in the near term”; but added that it will speed up the shift to green energy in the longer term. He added that the war has also shown the “commitment of major companies to operate consistently with core values”.

ING has committed not to provide “dedicated finance” to new oil and gas fields, in a move it says responds to the International Energy Agency’s groundbreaking Net Zero roadmap, released last year. The Dutch bank, which says its lending book for power generation already stands at 60% renewable energy, announced it would grow that figure by a further 50% by the end of 2025 as part of the plan. “Massive investment is needed in clean energy and infrastructure, which will then lead to a decrease in demand for fossil fuels, according to the roadmap. That reduced demand should be met by existing oil and gas fields, which means that in both the IEA’s and our view, no new fields should be needed,” ING said in a statement. Campaign group Stand.Earth praised the announcement, but called on all the bank and others to also stop financing companies that are actively expanding fossil fuel infrastructure.

Nasdaq has launched what it claims are the first carbon removal indices, to “support standardisation and transparency in the carbon removal market”. The indices, created in collaboration with Nasdaq-owned voluntary carbon market, provide reference prices for carbon removal “to help drive investment in the field and enable businesses to manage their ESG targets better”.

Luxembourg-based asset manager Candriam has said that its “ESG-related” assets under management stood at €105bn at the end of 2021. The firm’s active, thematic equity strategies were the most popular with clients, it said, attracting €2.1bn. As a result, Candriam plans to launch more thematic funds this year. Overall, its assets under management were up by €18bn from €140bn to €158bn over 2021.

Nearly three quarters of private infrastructure investors identified clean energy as the top investment choice in a survey by US manager Nuveen. The investment arm of TIAA conducted its annual survey of 800 institutional investors and consultants across the globe, concluding that 71% view climate risk as investment risk, and 70% of investors have, or are developing, net zero commitments.