ESG round-up: Natwest proposes ‘super-sized’ $10bn Brazilian government bond

The latest developments in sustainable finance: EU publishes FAQs to help companies apply green taxonomy framework; Clarity AI partners with Refinitiv on SFDR tool.

Natwest has proposed what would be the world’s biggest ever sustainability-linked bond for the Brazilian government to help halt the destruction of the Amazon rainforest, according to Reuters. In an article published this week, the news outlet reported that the bank had put forward the idea of a “super-sized $10 billion Brazilian government bond” that would help President-elect Luiz Inácio Lula da Silva stick to his plan of reclaiming leadership on climate change measures. 

The European Commission has published two sets of frequently asked questions to help companies apply the EU’s green taxonomy framework. One covers climate criteria and the other reporting rules. Earlier this month, Mairead McGuinness, the EU’s commissioner for financial services, financial stability and Capital Markets Union, stated in a speech that early next year the European Commission will publish a first set of Q&A’s to try and bring “some clarity” around the bloc’s anti-greenwashing Sustainable Finance Disclosure Regulation (SFDR). She added that her service is also working on a “comprehensive assessment of the implementation of SFDR”, which will “involve workshops with industry and other stakeholder groups, and public consultation”, early in the New Year.

Despite initial steps taken by progressive jurisdictions, central banks and financial supervisors are not up to speed with the transition to a nature positive, net-zero economy according to WWF’s Sustainable Financial Regulations and Central Bank Activities (SUSREG) 2022 assessment. The report by the NGO evaluated progress on sustainable financial regulations and central bank activities in 44 jurisdictions. Moving forward, WWF urged central banks and financial supervisors to integrate the Kunming-Montreal Agreement’s targets, and for financial institutions to steer away from lending to and investing in companies with the most environmentally harmful activities, “whose assets are likely to become ‘stranded’ as the world transitions”.

Clarity AI has partnered with Refinitiv to develop a tool to help London Stock Exchange Group’s customers comply with the EU’s SFDR regulation through accurate reporting of 20 mandatory and optional fields. 

Nordea Asset Management has extended its range of ESG solutions tackling social and societal challenges, with the launch of the Nordea 1 – Global Social Bond Fund. The vehicle invests in labelled social bonds and debt issued by corporates that positively contribute to social and environmental objectives, as well as generate sustainable stakeholder value.