ESG round-up: ShareAction slams Credit Suisse’s climate strategy

ShareAction has criticised Credit Suisse’s new climate strategy and urged shareholders to vote against the proposal at the banking group’s AGM in April. In the plan, the Swiss bank set five additional emissions reductions targets for the power generation, commercial real estate, iron and steel, aluminium and automotive sectors. However, it failed to incorporate capital markets activities in its disclosures and targets, or update its oil and gas policy. ShareAction has called on Credit Suisse to update its oil and gas policy, which it says is one of the weakest in the European banking sector.

A spokesperson for the bank said: “At the end of 2022, Credit Suisse outlined the continued reduction of absolute financed emissions associated with the oil, gas and coal sector by 64 percent against the 2030 goal of 49 percent. It has provided transparent disclosure on the company’s strategy to align its financing activities with the Paris Agreement. The bank has also expanded its sector policies to cover climate-sensitive sectors such as oil sands, deep-sea mining, Arctic oil and gas and palm oil.”

Meanwhile ING earned plaudits from climate activists for updating its oil and gas policy to restrict dedicated finance to mid-stream projects. Maaike Beenes, campaign lead banks and climate at BankTrack, said: “This move from ING acknowledges that it makes no sense to end direct finance for oil and gas exploration projects while continuing to fund the infrastructure that transports this oil and gas. Although important gaps remain, ING could once more set in motion a positive shift in bank financing for the fossil fuel industry if this example is followed by other banks.” The Dutch bank also announced plans to reduce the volumes of the traded oil and gas it finances, in order to align its trade and commodity finance business with the International Energy Agency’s net zero 2050 roadmap. Targets for the segment will be published in 2024.

West Virginia has voted in favour of an anti-ESG investment proxy reform bill. The state senate voted 30-2 to send the bill to governor Jim Justice, who will have until 29 March to act on it. The legislation requires the state’s investment boards – which manage more than $34 billion in public pension and state investment funds – to cast proxy votes based solely on the financial interests of pensioners and taxpayers, rather than ESG factors.

State treasurer Riley Moore praised the passage of the bill, saying: “Wall Street fund managers and proxy advisory firms have used the façade of ESG to impose woke, leftist policies across the private sector. Recently, Congress adopted a resolution to roll back Biden administration rules that allow money managers to consider ESG when voting private retirement shares. Now, the states must collectively stand up against ESG proxy voting activism with our public retirement funds.”

Responding to US house speaker Kevin McCarthy’s comments on the Department of Labor ESG rule, NYC comptroller Brad Lander said the statements are “peddling misinformation in a disingenuous attempt to preserve short-term profits for fossil fuel donors at the expense of the retirement security of today’s and tomorrow’s workers”. Lander – who is custodian, investment adviser and trustee of the US’s fourth-largest pension system, with approximately $240 billion in assets – added that investors should be paying attention to ESG risk factors to maximise long-term risk-adjusted returns for retirees.

Several members of the US Congress have written to SEC chair Gary Gensler urging him to finalise a climate disclosure rule as soon as possible, following reports from media outlets that the commission plans to scale back the planned regulation. The letter said these reports were “deeply concerning” and reminded Gensler that the SEC had previously promised regulation which would “provide consistent and clear reporting obligations” for issuers.

The Parker Review has published new targets for FTSE 350 companies to encourage greater racial diversity in senior management. Companies will be required by the end of this year to set individual targets for senior management positions to be occupied by ethnic minority executives. Deadlines for these targets to be achieved will be December 2027. Therese Kieve, stewardship analyst at Sarasin & Partners and head of the race equity workstream for The 30% Club’s UK Investor Group, said: “The focus is shifting to senior management because that’s an area where progress has historically been limited. It’s positive that the targets encourage a tailored approach as it allows companies to assess their own sector and teams – it’s not a ‘one size fits all’ approach.” Fifty of the UK’s largest private companies have also been set the target of having at least one ethnic minority director on the main board by December 2027.

Staying on DE&I, only 13 out of 68 companies have scored an “A” rating in Arjuna Capital and Proxy Impact’s annual racial and gender pay scorecard. Starbucks, Microsoft, Bank of New York Mellon, Citigroup, American Express and Visa were among the companies which received an “A”. Twenty-five companies – including Alphabet and Goldman Sachs – received an “F” rating.

Sweden has said it will refuse to accept applications for its SEK1 trillion ($94 billion; €88 billion) pension pot from asset managers that do not integrate ESG into their funds. The Swedish Fund Selection Agency, which is overseeing the process, said that managers will be required to systematically incorporate sustainability considerations into their operations.

GFANZ co-chair Mark Carney has called for more funding for major greenhouse gas emissions reductions, an accelerated energy transition of high-emitting sectors and the implementation of net-zero targets by all global financial institutions. In a speech delivered at the Institut de France on Monday, Carney – speaking in his role as UN special envoy on climate action and finance – said that a combination of global architecture and national sovereignty, of public policies and private actions and of binding commitments and voluntary initiatives will be required to achieve global governance of the environment.

The Australian Finance Institute has recommended a new classification structure for sustainable financial disclosure. The industry-led body – which is working closely with the government to develop a sustainable finance taxonomy for Australia – said capital should be directed towards activities which progress sustainable objectives while facilitating the transition to a sustainable economy and addressing greenwashing risk.

The Prague Stock Exchange has published its first sustainability reporting guidelines, developed with the support of the EBRD. The guidelines aim to provide issuers with clarity on how to approach ESG reporting in light of investors’ growing expectations and emerging regulatory developments in the EU.

CFA UK has launched a sustainable community to move the needle on sustainable investing by tackling key issues including the energy transition, ESG, impact investing and climate change collaboratively. The new initiative aims to connect sustainable investment professionals who will discuss the challenges together from their varying viewpoints.

ESG Book has partnered with BDO Sunghyun, a global network of public accounting, tax and advisory firms. The collaboration will provide BDO Sunghyun’s clients with access to data solutions covering 50,000 corporates, including ESG and climate data.