ESG round-up: Think-tank calls on UK government to issue SLBs

The latest developments in sustainable finance: Taiwan’s SFC incorporates Equator Principles into credit guidelines, SEC publishes report on regulated entity diversity

The Social Market Foundation has called on the UK government to issue a sustainability-linked bond to keep the country at the forefront of green finance innovation. In a note today, the think-tank said sustainability-linked bonds are emerging as a new way to hold organisations to account on net zero and questioned why this principle should not be extended to governments. While Chile made headlines for issuing the first sovereign SLB earlier this year, the format been slow to penetrate the public-sector space, with the Swedish city of Helsingborg and the Arizona Industrial Development Authority among the only other government-linked issuers to take to the market. A spokesperson for the Treasury did not comment on whether it was considering an SLB, but a Treasury source told RI that the government was keeping the possibility under review.

Royal London Asset Management (RLAM) will vote against Ocado’s remuneration policy at the company’s AGM on Wednesday. The asset manager, which holds a 0.3 percent stake in Ocado worth around £21 million ($26 million; €25 million), has “serious concerns” regarding Ocado’s value-creation plan that will see executives receive up to £20 million a year in awards. Sophie Johnson, corporate governance manager at RLAM, said: “We have consistently voted against or abstained on executive pay for a number of years at Ocado, including voting against the value creation plan. We would have preferred a more balanced long-term incentive plan with a range of measures looking at different aspects of performance and the overall health of the business.” Last week, experts told RI that investor pushback on generous executive bonus schemes is expected to rise this AGM season as the cost of living soars under inflationary pressure. Liontrust Asset Management, easyJet and Compass Group are among the companies to have already faced significant shareholder rebellion against their remuneration policy, although all crossed the 50 percent threshold.

Close to 90 percent of regulated entities publish information on diversity and inclusion efforts, a report by the SEC’s Office of Minority and Women Inclusion has found. The report, based on a survey of 118 entities, also found that 98 percent included D&I considerations as part of employee strategic plans, while 70 percent took “proactive steps” to promote a diverse pool of candidates for directorships. Companies performed most poorly in the area of suppliers and procurements, with just under half having a supplier diversity policy in place.

Taiwan’s Financial Securities Commission has approved the incorporation of the Equator Principles into credit guidelines for financial institutions, according to reports in Regulation Asia. Under the changes, banks will have to evaluate environmental and social impacts for large-scale project financing, as well as ensure that credit recipients evaluate transition risk for high-emission projects and have conducted impact assessments for local communities, residents and employees.