ESG round-up: Taxonomy TSC vote scheduled for Wednesday

ERAFP awards five SRI credit mandates, Eumedion sets out priorities for Dutch listed companies in next year.

A vote on establishing additional technical screening criteria for the EU taxonomy will take place on Wednesday. The extra criteria would determine the condition under which certain economic activities qualify as contributing substantially to climate change mitigation or adaptation, and whether those activities cause no significant harm to any of the other environmental objectives. 

French public pension fund ERAFP has awarded five management mandates (three active and two “stand-bys”) for its SRI credit portfolio. The active mandates were awarded to Amundi Asset Management, Ostrum Asset Management and HSBC Global Asset Management, while the stand-by mandates went to Candriam and Groupama Asset Management.

The forecast amount for the active mandates is around €8 billion. The initial contract is six years, with the possibility of renewal for a two-year period. Holders will have to apply the ERAFP SRI system and contribute to the implementation of the climate roadmap that the pension fund has set as part of its commitments to the Net Zero Asset Owner Alliance. 

Eumedion has said it expects all companies listed in the Netherlands to base a “substantial portion of [their] variable remuneration elements on stretching sustainability goals that are material to the company”. In its annual focus letter to Dutch-listed companies, the corporate governance and sustainability forum said the targets should be challenging, measurable and auditable. Eumedion has selected the topic of “remuneration policy” as a focus point, as many listed companies will have to “refresh” their remuneration policy at the 2024 AGM. The forum has also asked for all Dutch-listed multinationals to sign the Dutch tax governance code and break down their tax payments by country.  

The Voluntary Carbon Markets Integrity Initiative (VCMI) has announced that additional guidance for its Claims Code of Practice will be published on 28 November. The new advice will enable companies to begin the process of making claims in line with VCMI’s code. The guidance will include a VCMI monitoring, reporting and assurance framework; additional claim tiers for guidelines on high ambition claims; and the launch of the branded claim and associated branding guidelines. VCMI has also initiated an early adopters programme which it says will “highlight and support a select group of corporate climate leaders ready to be recognised for raising their ambition by being one of the first to make a VCMI claim”. 

Canadian banking regulator OSFI has released its proposed methodology for the country’s first standardised climate scenario analysis, which will be undertaken by all financial institutions in 2024. It follows a pilot exercise conducted last year with the Bank of Canada and six Canadian banks, which found that the economy will most be impacted by declining commodity prices compared with other factors. The pilot did not capture the disruptive impacts of technology due to the use of “very conservative estimates” about the pace of technological advancements, OSFI said at the time. Stakeholders have until 22 December to provide feedback.

The Australian government has acknowledged that climate change is a systemic risk that may affect its sovereign bond values. The statement, which was published by the Treasury, was required to settle a class action lawsuit that alleged investors in Australian treasuries had been misled due to a lack of disclosures about the financial risks caused by climate change. It noted that the Albanese administration is “developing a package of sustainable finance reform… to increase the transparency and credibility of Australia’s growing sustainable finance market”.

In other Australia news, the country’s securities regulator ASIC has received A$4.3 million ($2.7 million; €2.6 million) from the government to further expand its surveillance and enforcement activities relating to greenwashing over 2023-24. The move comes ahead of the Treasury’s release of its sustainable finance strategy, due to be published before the end of the year, and follows a crackdown on greenwashing by the financial watchdog this year. 

Finally, Australian voters rejected the Indigenous Voice to Parliament national referendum, in a vote on Saturday. The vote proposed altering the constitution to recognise the First Peoples of Australia and would have created an advisory body made up of Indigenous people to have a say on Australia’s constitution. Sixty percent of Australians voted “No”.  

Pakistan’s HBL has become a signatory of the UN Principles for Responsible Banking (PRB), a framework for a sustainable banking industry developed in collaboration between banks and UNEP FI. As part of its commitments as a PRB signatory, the country’s largest lender has also joined the Net Zero Banking Alliance.