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ESG round-up: One-third of Japanese investors have no plans to set net-zero target

The latest developments in sustainable finance: NN IP reaches €5bn AUM across green bond funds, Malaysian government sets 30% female board representation target for state investment funds.

Almost a third of Japanese institutional investors have no plans to set a net-zero target for their investment portfolios, according to a survey by the Life Insurance Association of Japan. Net-zero targets were far more common among corporates in the survey, with 35 percent having set a net-zero target and interim goals, compared with 9 percent of investors. The survey also found that half of investors are using or plan to use “TCFD-style climate-related disclosures” in their evaluation of companies or to initiate dialogues. One-third of investors said they were currently using some information, while a further 22 percent said they were considering adopting it. The survey also polled companies, 34 percent of which are currently disclosing in some form with a further 43 percent considering it.

NN Investment Partners has announced it has reached the €5 billion milestone for its green bond strategies, as it reiterates its prediction of €1.1 trillion issuance of green, social and sustainability bonds in 2022. The firm, which launched its first green bond fund in 2016, recently appointed Roel van Broekhuizen as a portfolio manager across its green bond strategies.

The boards of Malaysia’s six government-linked investment companies, which manage €370 billion between them, have been given a target of 30 percent female representation under new governance principles launched at the end of last week. The principles also recommend establishing a governance structure to oversee ESG in the companies’ investment strategies, with Malaysia’s finance minister saying that good governance was key to improving financial performance.

Investment consultancy bfinance has announced its commitment to adopting the Impact Investing Institute’s Impact Investing Principles for Pensions. The consultancy, a founding member of the Net Zero Investment Consultants Initiative, will commit to routinely including impact investing as a topic with new and existing pension fund clients, as well as supporting clients in integrating ESG into investment and manager decisions.

Morningstar has identified 37 mineral resources, including cobalt, lead and nickel, which it says present heightened ESG risk to investors in a new report. Production of a number of these resources, which will be in increasing demand as the global population expands, is concentrated in countries with poor governance, including Russia, which accounted for 43 percent of global palladium supply in 2020. In order to mitigate risks, Morningstar recommends investors push for greater disclosure from producers of minerals that are critical to their operations.