ESG round-up: Red and blue US state funds backed ESG proposals in 2021, Morningstar reveals

The latest developments in sustainable finance: EU defence body awards ESG study contract to KPMG; CalSTRS to shift 20% of public equity portfolio to low-carbon index.

ESG-focused proposals were well supported by US public pension funds in both red and blue states last year, data from Morningstar has shown. Analysis by the US financial services giant found that schemes in Democrat-leaning states supported 98 percent of ESG proposals in 2021, compared with 80 percent for those in Republican-leaning ones. Both sets compared favourably with the average level of support among “general shareholders” of 63 percent. Morningstar looked at voting on the 72 highest-supported ESG shareholder resolutions in 2021, which covered issues such as climate change, pay equity and workers’ rights.

Consultant KPMG has been selected by the European Defence Agency (EDA) to oversee its study into the arms industry’s ESG contribution. According to the tender document, KPMG saw off two other bids for the contract, worth €250,000. The EDA, the EU agency created in 2004 to facilitate better collaboration between member states on defence, put out the tender in June. The aim of the work is to “measure and benchmark the European defence industry’s activities in relation to environmental, social and governance criteria, and provide an analysis of the sector’s contribution to the objectives set out by ESG-related frameworks”.   

California public pension giant CalSTRS will aim to shift 20 percent of its public equity portfolio to a low-carbon index as part of a new package of actions announced yesterday in support of the fund’s 2050 net-zero goal. CalSTRS’ board yesterday also authorised the setting of an interim 2030 “science-based emissions goal” for the $311 billion fund.  

The EU should extend an internal deadline to achieve alignment with international climate reporting rules being developed by the International Sustainability Standards Board, ISSB’s chair Emmanuel Faber said yesterday during a European Parliament session. The EU has set a November deadline for the first draft of the standards, while the ISSB is due to outline its “global baseline” standards by the end of 2022. According to Reuters, Faber said: “I would hope that our EU colleagues in the discussions feel that the prize of aligning is such that it’s worth having more time, if needed.” The current deadline has created “complexities” for the EU, Faber added.

Financial services firm Accenture has acquired Carbon Intelligence, the London-based climate consultancy. Carbon Intelligence is Accenture’s fifth sustainability-focused acquisition in the last year, following the additions of Greenfish, akzente, Avieco and Zestgroup.