ESG round-up: Sierra Club-led coalition presses asset managers on Race to Zero

The latest developments in sustainable finance: PRB aims to educate bankers on climate change; labour survey highlights exploitation concerns in Asian garment trade.

A global coalition led by the Sierra Club has written to the Net Zero Asset Managers Initiative (NZAM) encouraging it to align with the revised Race to Zero criteria. The group of 23 advocacy organisations has asked NZAM members to update their policies in line with the RTZ guidelines by the June 2023 deadline for compliance. The letter specifically asks for commitments to 1.5C scenarios, net-zero by 2050, and a public transition plan covering action within the next 12 months, among other requests.

The UN is launching a Principles for Responsible Banking (PRB) academy to train bankers of all levels on climate change and sustainability. The initiative has been developed by the Chartered Banker Institute, the UN Environment Programme Finance Initiative and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), with input from banks across the world. The scheme is designed to help signatories to the PRB implement the initiative’s sustainability framework across their businesses. It is expected that the academy will be made available to more than 300 signatories within the next five years.

A survey by the Business and Human Rights Resource Centre has highlighted concerns about labour exploitation in Asia’s garment sector. Around two-thirds (61 percent) of respondents reported that the situation for freedom of association and collective bargaining had “got worse” since the start of the covid pandemic, in a survey of 24 trade union leaders and 124 union activists and labour advocates in Bangladesh, Cambodia, India, Indonesia and Sri Lanka. Almost half (48 percent) of those surveyed cited an increase in discrimination, intimidation, threats and harassment of trade union members. The report identifies allegations of union crackdowns and abuse of workers’ rights at 13 factories which supply global retailers including Adidas, Sainsbury’s, H&M and Primark.

The US Department of Labour’s proposed rule change around ESG investing and proxy voting by workplace pension funds is under final review, indicating that the end rule is likely to be released soon. If the change is adopted, the Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights proposal will remove Trump-era obstacles which prevented US fiduciaries from incorporating ESG into investment decisions and default strategies.

Legal & General Investment Management (LGIM) has partnered with Tumelo, an impact-focused fintech, to launch “Expression of Wish”, a digital service for trustees to identify ESG issues. The companies aim to encourage dialogue between members and LGIM’s investment stewardship team. The service will be available to the investment manager’s defined contribution trustee client base (2.15 million scheme members in the UK) as well as other interested members.

One Planet Sovereign Wealth Fund (OPSWF), an initiative led by French president Emmanuel Macron, has urged climate action collaboration at the latest OPWSF CEO summit in Abu Dhabi. Members of OPSWF include sovereign wealth funds based in New Zealand and Ireland. The guidance outlined a framework for how private market asset managers can streamline their climate data by meeting Level One of the disclosure guidance by end-2023. It also discussed how investments in clean hydrogen and renewable energy in emerging markets can be accelerated.