ESG round-up: NBIM calls for corporate disclosure on use of offsets

Disclosure of corporate reliance on offsets is a “must-have” when assessing credibility of climate plans, according to Norges Bank Investment Management. In its response to the consultation by the UK’s Transition Plan Taskforce (TPT), the manager of Norway’s trillion-dollar sovereign wealth fund also stated that reducing “actual emissions” before turning to carbon offsets “seems a prudent approach”, other things being equal.  TPT, which launched in April, went to the market for input on climate transition plans in May. The body is in the process of developing its own framework, which will inform incoming UK government requirements for large companies and certain financial institutions.

It comes as the High Court has ordered the UK government to flesh out how exactly it will achieve its net zero policies, following a legal challenge from environmental groups including Client Earth.

The UK Financial Conduct Authority (FCA) has published its climate-related financial disclosures for the first time. The report sets out the FCA’s approach to managing climate-related risks and opportunities. It is aligned with the recommendations of the Taskforce on
Climate-related Financial Disclosures and covers both regulatory and corporate activities.

Roughly one-third of assets are owned or managed by an institution committed to net zero, according to new analysis by the Climate Policy Initiative. The study looked at signatories to GFANZ, the SBTI and Paris Aligned Investment Initiative Net Zero Asset Owner Commitment. It found that 42 percent of assets were being managed by asset managers committed to net zero, but this figure fell to just 6.7 percent of asset owners. It warned that more research was needed to identify the percentage of assets being managed in line with net-zero commitments. Last year saw $112 trillion committed to net zero, with the largest contribution from commercial banks, while 2022 is set to see $14.1 trillion if the current trajectory continues.

Swiss banks are to begin integrating new guidance on the provision of sustainability advice to clients. The “self-regulation” guidelines, which will be binding on members of the Swiss Bankers’ Association from 2023, require banks to include ESG considerations when giving investment advice and portfolio management, as well as considering energy efficiency when giving mortgage advice.

Japanese regulators have been told to explore initiatives to make institutional investors consider ESG factors when making investment decisions and to revise supervisory guidance on climate risks to “make the risk management and the client support initiatives of large and regional FIs more effective”. The recommendations were made in the second annual report by the Expert Panel on Sustainable Finance, an influential advisory panel set up by the Japanese Financial Services Agency. It comes in the same week that the FSA published a discussion paper on Japan-specific variables that are relevant for climate scenario analysis.

The Asian Development Bank and founding member Singapore have signed an MoU that includes a pledge to “address the challenges of climate change”. “Through this MoU, ADB and Singapore will continue to cooperate to support private sector development projects that contribute to the region’s infrastructure, financial and social needs, and help countries achieve their Sustainable Development Goal commitments,” said ADB president Masatsugu Asakawa at a signing ceremony on the side lines of the recent G20 finance ministers and central bank governors meeting.