ESG round-up: NGFS central banks to engage IOSCO and FSB on transition plans

The latest developments in sustainable finance: Investors engage with non-disclosers of environmental data; Sustainable Fitch launches ESG regulations tracker.

Central bank members of the Network for Greening the Financial System (NGFS) will engage with global authorities such as IOSCO and the FSB to support a coordinated regulatory approach to financial institution transition plans. The work programme was set out in an NGFS stocktake of emerging practices relating to climate transition plans released on Wednesday. The group noted that information contained within transition plans “could meet different regulatory objectives”, and that coordination is needed across regulatory agencies to ensure interoperability and “prevent ‘arbitrage’ of different emissions regulations”.

CDP has called on more than 1,600 “high-impact” companies to disclose environmental data, as part of its 2023 non-disclosure campaign backed by a total of 288 financial institutions with $29 trillion in AUM. In a statement published on Wednesday, the CDP said a record number of investors were involved in its annual effort to get more companies to disclose on at least one of its three priority areas of climate change, forests and water. Companies targeted this year include repeat non-disclosers such as Saudi Aramco, Exxon Mobil Corporation, Glencore, Chevron, Tesla and Volvo Group. Major investor names engaging with the companies include Schroders, Aviva Investors, Legal & General Investment Management, PGGM and Manulife.

Sustainable Fitch has launched an ESG regulations and reporting standards tracker. The Excel tool monitors developments to sustainable taxonomies, ESG corporate disclosure requirements, climate-related corporate disclosure requirement, ESG fund requirements and disclosures, and reporting standards.

The Swedish International Development Cooperation Agency (Sida) has called for financial solutions for biodiversity and climate adaptation. The organisation has issued a call for expressions of interest to mobilise private sector capital towards biodiversity and climate adaptation projects across Africa.

Bloomberg is shifting its Gender-Equality Index (GEI) away from its survey-based approach of directly collecting data from companies through its gender reporting framework. The move comes in response to feedback that reporting requirements and inconsistencies across frameworks are becoming overwhelming for companies and investors. Instead, Bloomberg will collect the key gender-related metrics into its ESG scores, compiled from what companies publicly disclose in their sustainability reports.

More than 87 percent of LPs are looking to increase their commitment to ESG over the next two years, according to a PwC survey. The analysis is comprised of responses from 300 LPs and 300 GPs across Asia, the UK and the US. Private equity LPs and GPs currently have the lowest average asset allocation towards ESG products across the private markets universe, with only 57.4 percent and 47.6 percent of PE LPs and GPs allocating more than 30 percent of their assets to Article 8 products. These figures fall below the average 63.7 percent and 62.1 percent figures recorded among their real estate, infrastructure and private debt peers. On the disclosure side, two thirds of LPs surveyed stated that they are willing to accept higher management fees in exchange for notable improvements in their GPs’ ESG reporting.