ESG Round Up: SEB reverses back into the defence industry

The latest developments in sustainable finance: AIG commits to net zero target; Australian regulators targets greenwashers and pave the way for Russian divestment.

SEB Investment Management has updated its policy regarding the defence industry meaning six funds will now be able to invest in it; the revision was instigated by the growing geopolitical tensions in recent months – which culminated with Russia’s invasion of Ukraine. “It is SEB Investment Management’s view that investments in the defence industry are of key importance to uphold and defend democracy, freedom, stability and human rights. At the same time, it is important to keep in mind that many of our customers and unit-holders still do not want to invest in the defence industry, and therefore going forward many of our funds will continue to exclude such investments,” a spokesperson told RI. The story was first reported in the Wall Street Journal.

American International Group has announced a net zero commitment for its underwriting business and investment portfolio. The group has committed to implement a science-based target, and will no longer insure or invest in the construction of coal power plants, thermal coal mines or oil sands, or existing infrastructure where more than 30% of company revenue is generated from these three industries. It will cease new investment and phase out existing underwriting by 2030, and will not provide cover for any Arctic energy exploration. In June 2021, LGIM divested from the firm because it had no policy on thermal coal or carbon disclosures.

The Australian Competition and Consumer Commission has named greenwashing as one of its enforcement priorities for 2022/3. In a speech at the Committee for Economic Development of Australia, ACCC Chair Rod Sims said that the consumer regulator was hearing growing concerns that businesses are falsely promoting green credentials. The regulator will be examining environmental claims in consumer goods, manufacturing and the energy sector, and will be working closely with the Australian Securities and Investments Commission and energy regulator, he continued.

Australia’s prudential regulator APRA has said that it will not take any action against trustees of the country’s superannuation funds who seek to divest Russian assets, where they “have considered such divestments in accordance with their duties.” It follows a statement by the Australian Government in which it confirmed its strong expectation that the funds would review their Russian holdings.

Staying in Australia, the Investor Group on Climate Change (IGCC), whose members hold more than $33trn in assets under management, has today laid out five expectations for the climate plans of Australian companies, including that they tie CapEx commitments to science-based decarbonisation pathways.