ESG round-up: NGOs sue EC over inclusion of biomass and forestry in taxonomy

The latest developments in sustainable finance: UN report warns of deforestation risks, investors call for Starbucks labour assessment.

A coalition of environmental NGOs from across the EU has sued the European Commission over the inclusion of biomass and forestry activities in the EU taxonomy. The 10 organisations, led by the UK’s 11KBW and France’s Baldon Avocats, argue that the framework’s standards will encourage projects that contribute to climate warming and forest degradation. The taxonomy has been widely criticised for including nuclear and natural gas as sustainable investments, as well as projects that accelerate logging and burning forest wood. In February, the European Commission declined to review the NGOs’ request for a reconsideration of the criteria for forest biomass and forestry projects.

A new UN report is urging investors to eliminate deforestation from their portfolios after research found that some of the world’s most valuable food and agriculture companies could lose up to 26 percent of their value by 2030. At Climate Week in New York, COP26 president Alok Sharma and UN climate change high-level champions Nigel Topping and Mahmoud Mohieldin called on all financial institutions to remove deforestation from investment portfolios, deliver on their net-zero commitments, and show progress by 2025. Early movers that develop solutions for accelerating the transition to a net zero and nature positive future can gain a share of the $4.5 trillion opportunity that will accompany the upcoming land transition, the report suggests.

New York City Comptroller Brad Lander, PIRC and SHARE have filed a shareholder proposal at Starbucks calling for an independent assessment of the company’s labour practices, including whether it is adhering to its “stated commitment to workers’ freedom of association and collective bargaining rights”. The investors collectively own more than $163 million shares in Starbucks and are concerned that the company is in breach of its commitment, following a surge in reports of retaliatory firings of workers leading unionisation efforts and Starbucks executives speaking out against unionisation.

The Global Industry Standard on Tailings Management (GISTM), the International Council on Mining and Metals, the PRI and UNEP have made an urgent appeal to companies, governments and investors to enhance the safety of tailings storage facilities across the globe following the Jagersfontein Tailings incident on 11 September which killed three people. The convenors are asking for investors, companies and governments to advocate for the GISTM’s implementation by mining companies across all sites. Earlier this year, large asset managers including BlackRock, Federated Hermes and Invesco made a commitment to ramp up engagement with mining companies over tailings safety.

Green Exchange, a sustainable redevelopment project in Chicago, has announced the creation of a dedicated “green” equities exchange. The initiative is seeking approval from the US Securities and Exchange Commission for the platform, which will be called the Green Impact Exchange and is expected to go live in 2023. The exchange will bring together green investors and public companies which are committed to green corporate governance.