ESG round-up: Robeco voted against most ‘Say on Climate’ resolutions last year

The latest developments in sustainable finance: Net zero venture capital group launched; EU Council adopts new rules on pay transparency.

Robeco voted against 83 percent of Say on Climate resolutions put forward by companies in 2022, according to its latest sustainability report. The Dutch investment manager also revealed that it initiated engagement with the Australian government on climate in 2022 as part of its sovereign engagement efforts. Since 2020, Robeco has engaged with Brazil and Indonesia over deforestation concerns in collaboration with the Investors Policy Dialogue on Deforestation.

Twenty-three venture capital firms have joined forces to launch a climate initiative under the Glasgow Financial Alliance for Net Zero (GFANZ). The Venture Climate Alliance (VCA) consists of VC firms across the US and Europe that have committed to supporting a global transition to net zero by 2050. The initiative’s founding members include VC giant Tiger Global. The alliance is supported by Great Circle Capital Advisors, a climate finance advisory firm. The group will work to “define, facilitate, and realise net zero-aligned pathways for early-stage investments”.

The European Council has adopted new rules on pay transparency to close the gender pay gap in the EU. As it currently stands, women in the EU earn on average 13 percent less than their male counterparts. Under the pay transparency directive, EU companies will be required to disclose how much they pay women and men for work of equal value and take action if their gender pay gap exceeds 5 percent. The new directive also includes clauses on compensation for victims of pay discrimination and penalties, including fines for employers which break the rules. Companies with more than 250 employees will be required to report annually on their gender pay gap. Smaller organisations – initially those with more than 150 employees – will need to report on this every three years.

Real estate companies are progressing towards decarbonisation but are not on track to meet net-zero targets, according to Dutch real estate investor group Global Real Estate Engagement Network (GREEN). The research found that, while one-third of companies have net-zero ambitions, very few have robust implementation plans in place. The network has called on asset managers to engage with the real estate sector and ask companies to adopt climate risk management measures and take more tangible steps to achieve net zero.

Energy production of European and US fossil fuel giants will remain dominated by oil and gas in 2030 despite high growth rates for clean energy production in the overall economy, according to a report commissioned by Dutch investors PGGM, Achmea Investment Management, APG Asset Management, MN and Pensioenfonds Rail & Openbaar Vervoer. The analysis – produced by Accela Research – compared emissions reduction performance and capital expenditure for BP, Eni, Equinor, Shell and TotalEnergies. Although the European majors are leading the rest of the industry, the report showed that companies need more ambitious strategies to align with 1.5C. The report estimates that, on average, company portfolios will remain 82 percent in oil and gas production, compared with 18 percent in low-carbon alternatives by 2030.

Costa Rica is looking to develop and implement a sustainable finance taxonomy. It is also looking to create a framework to map, quantify and disclose climate-related financial risks for the country. It has launched a project – financed by the Green Climate Fund and EU’s Euroclima programme – to strengthen its sustainable finance framework and support its net zero 2050 goal. The project notes that contribution of private investment is crucial to achieving Costa Rica’s climate change objectives. Institutions involved in the project include UNEP FI, the European Commission, the Ministry of Environment and Energy, and the Central Bank of Costa Rica.

Singapore’s sovereign wealth fund GIC has updated its climate scenario analysis. The new scenarios – developed alongside Ortec Finance – incorporates two new features. The first presents an additional fourth scenario dubbed “too little, too late” which is aligned with a 2-3C outcome. The outcome assumes both high transition and physical risks, which would take place if the implementation of climate policies are delayed. The second change is an update to the supply side effects of physical climate risks on inflation, which could result in physical risks.

The Asia Investor Group on Climate Change (AIGCC) has launched a greenwashing guide alongside environmental law firm ClientEarth for the Asian finance sector. The guidance, designed for asset managers, banks and investors, offers advice on how to combat greenwashing. It provides an overview of emerging forms of greenwashing, as well as the different existing regulations, guidance and legal action on greenwashing across Asia and elsewhere.