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ESG round-up: SBTi to hire director for complaints about corporate emissions standards

The latest developments in sustainable finance: Thomson Reuters to conduct human rights impact assessment, Morningstar notes dip in repurposed sustainability funds.

The Science Based Targets initiative is hiring a director to handle complaints and concerns about standards used to judge corporate environmental targets. SBTi, which brings together climate groups with the aim to help corporations develop emissions targets in line with limiting global warming to 1.5 degrees Celsius, has previously faced criticism for not properly explaining why it favours certain methodologies over others to judge companies’ emissions claims.

Thomson Reuters announced plans to align with the UN Guiding Principles on Business and Human Rights and conduct an independent, company-wide human rights impact assessment of its products and services, including contracts with US Immigration and Customs Enforcement. Thomson Reuters has faced criticism over the use of its database service by ICE to track, arrest and deport undocumented migrants in the US. The announcement follows shareholder activism campaigns from minority investor British Columbia General Employees’ Union. In the last few years, BCGEU submitted shareholder proposals highlighting privacy and human rights violations committed by ICE and demanded Thomson Reuters adopt the UNGPs as a guiding framework for mitigating human rights risk.

Global sustainable fund inflows fell by almost 36 percent in Q1 2022 compared with Q4 2021, according to Morningstar’s Global Sustainable Fund Flows quarterly report. The $97 billion of new capital is the sharpest quarterly slowdown in sustainable fund net inflows over the last three years, the report stated. Sustainable funds still performed better than the broader market, which saw inflows slump by 73 percent amid investor concerns over inflationary pressures and the war in Ukraine. Asset managers also continued to repurpose and rebrand conventional products into sustainable offerings, albeit at a slower pace. Morningstar identified 63 repurposed funds in Europe in Q1 2022. This constitutes the lowest quarterly count since SFDR came into force in March 2021, and a 37 percent drop quarter-on-quarter, the investment research firm noted.