ESG round-up: Taiwan central bank to address climate change risks in forecasting

The latest developments in sustainable finance: Kentucky accuses FIs of energy boycotts; US Federal Trade Commission looks to update guidance on environmental marketing claims.

Taiwan’s central bank has unveiled plans to incorporate climate change risks into its modelling and forecasts for economic growth. The bank’s new strategy will also be aligned with the government’s sustainable development goals. Taiwan made a net-zero 2050 commitment last year, pledging to spend NT$900 billion ($29 billion; €27 billion) on the transition by 2030.

Kentucky’s state treasurer Allison Ball has released a list of financial institutions that the state has selected for divestment due to their alleged boycott of the fossil fuel sector.  The named companies include BlackRock, BNP Paribas, Citigroup, Climate First Bank, Danske Bank, HSBC, JPMorgan Chase, Nordea Bank, Schroders, Svenska Handelsbanken and Swedbank. The list was published in accordance with the law passed by the Kentucky General Assembly in August.

In a statement, BlackRock denied the accusations, stating that it “does not boycott energy companies and will continue to be investors across the energy sector”. The asset manager added that its only agenda “is to deliver the best financial results for its clients”, and that it has invested around $276 billion in energy companies globally. JPMorgan Chase also denied Kentucky’s claims saying it is “among the largest financiers of the US traditional and renewable energy industries, including in Kentucky where it serves some of its largest energy companies and utilities”. The bank added that it believes its business practices are in line with Kentucky law, and hopes that a deeper look at these facts would lead to reconsideration.

Schroders said its purpose “is to provide excellent investment performance to its clients through active management and forward-looking analysis”, adding that it aims to identify material opportunities and risks to investment portfolios, including those posed by the climate transition. Swedbank told Responsible Investor that it “is determined to facilitate a climate transition that aligns with the Paris Agreement”, which is why the bank has decided not to provide any new direct financing of unconventional production of fossil fuels. HSBC declined to comment. The other named companies had not commented at the time of publication.

The US Federal Trade Commission is looking at updating its guidance on environmental marketing claims due to increased consumer interest in green products. The body is seeking comments on specific issues including carbon offset, climate change and renewable energy claims. It comes amid a wave of enforcement action by prominent financial regulators, including the US SEC, in response to greenwashing cases.

The International Sustainable Finance Centre (ISFC) has published a sustainable investment roadmap for Poland, Czech Republic, Hungary and Slovakia. The roadmap covers high greenhouse gas emitting sectors including energy, road transport, local heating, agriculture, chemicals, cement industry, waste management and steel productions. It outlines areas of investment which could speed up central Europe’s transition to a sustainable economy.

Barclays has called for more transparency from issuers of sustainability bonds on how they expect to split proceeds between green and social projects, after finding that no issuers with more than $500 million outstanding had reported on the topic pre-issuance. While most investors included this in post-issuance reporting, Barclays said this meant investors had to wait a year or more to understand whether the bond had acted as more of a green or more of a social bond. The bank found 57 percent of proceeds in its sample had been allocated to green projects, while 43 percent went to social. Insurers, tech firms and REITs were more likely to tilt allocation towards environmental projects, while electric utilities, the consumer non-cyclical sector and other financial firms were more likely to allocate to social.

Energy company Black Mountain Energy (BME) has paid $39,960 in compliance with three infringement notices for greenwashing issued by the Australian Securities and Investments Commission (ASIC) between December 2021 and September 2022. The infringement notices were issued based on statements made to the Australian Securities Exchange by BME, which the ASIC alleged to be false or misleading. The company claimed it was constructing a net-zero emissions natural gas development project and that greenhouse gas emissions associated with project Valhalla would be net zero. BME’s payment is not an admission of guilt or liability.

PricewaterhouseCoopers (PwC) has joined the UK Sustainable Finance Forum’s membership. UKSIF’s members include banks, fund managers, asset owners, financial advisers, data providers and charities.