In the Loop: Between the standards sheets, French Fancy and travel troubles

Welcome to Responsible Investor’s weekly subscriber-only newsletter! We’d love to hear your feedback, email us at

Happy throuple or tricky love triangle?

There was much love on display between representatives of the three big sustainability standard bodies at the Reuters Impact event this week. But as with all relationships, public displays of harmony do not always map to those behind the scenes.

The landscape has changed dramatically since the launch of the International Sustainability Standards Board (ISSB), which absorbed a number of other players at its formation in a move to set a global baseline capturing so-called enterprise value or single materiality.

At the same time, the EU is rapidly rolling out mandatory reporting embracing double materiality through its standards body EFRAG.

In theory, the two complement each other well and could capture the full suite of sustainability-related information various stakeholders want and need in order to protect their businesses and the planet.

Still standing independently, however, is impact-focused GRI. Its CEO Eelco van der Enden told the event it’s not third-wheeling and still has a role to play: “We sit in perfectly the middle between [EFRAG and ISSB] and I think we’re lucky that both love us so we have a very good relationship with both of them.”

He made the remarks in a panel discussion with EFRAG’s CEO Saskia Slomp and ISSB board member Richard Barker. Slomp quickly responded to van der Enden, referring to the three as “one big family”.

But three is sometimes a crowd, and we understand this relationship – unsurprisingly – gets heated and complicated, perhaps leaving some parties unsatisfied.

Richard Howitt, the only panellist not currently working at a standard setter (but the former CEO of the International Integrated Reporting Council) provided some nuance: “I’m not sure they all love each other.”

Behind the scenes of the various statements of co-operation, MoUs and public praise for each other, the materiality issue is, of course, a key cause of friction.

ISSB’s Barker said repeatedly on the panel that its standards are focused on information “relevant to investors”. This is likely to frustrate the other two, who support double materiality. Many investors – as evidenced in the recent ISSB consultation on future priorities and previous investor feedback – want double materiality.

Notably, Carol Adams, chair of the GRI’s standards governance body and a key proponent of double materiality, last month published a blog post on the importance of impact, saying there are “no shortcuts on the journey to a global sustainability reporting baseline”.

Flagging engagements with EFRAG and the ISSB, she continued: “Protecting the long-term interests of people and planet is important to capital markets. After all, there are no investment returns on a dead planet.”

She has also been present in the comment sections on a raft of LinkedIn posts on sustainability standards in recent weeks. For example, on one post where the author argued, among other things, that the ISSB is an “inhibitor” of accountability and economic transformation, Adams commented: “Fortunate then, that there are also the GRI standards.”

This is an interesting dynamic, especially as it is expected that the GRI will get even closer to the ISSB going forward.

While van der Enden told the panel that it’s “very unlikely” that either the ESRS or ISSB would completely replace the GRI, he reiterated to RI on the sidelines of the event that it is important to move towards having one global standard setter in the long term.

This echoed comments he made to us earlier this year that there is “no inch of movement from our strategic direction towards supporting the ISSB and the whole concept of a global comprehensive baseline”.

The week in RI

Nature was a big theme this week. RI was first with the news that TNFD and other key stakeholders were launching an initiative to define “nature positive” and also revealed that UNEP FI is planning to send natural capital analysts on secondment to banks in Latin America and South Africa.

In other nature news, ICMA published blue bond guidelines in collaboration with UN bodies and MDBs, and the NGFS launched a nature framework.

The central banking initiative also advised members to identify climate laggards in order to understand litigation risks to financial institutions. Meanwhile the ECB warned that investors could face climate-related losses of up to 15 percent on corporate bond portfolios by 2030.

More sifting through the ISSB consultation responses found substantial support for combining the standard setter’s proposed human capital and human rights projects, while Allianz stressed the importance of monitoring “inside-out impacts”.

Elsewhere, our reporter Dominic Webb looked at why asset managers are not re-upgrading Article 9 funds, and also spoke to Euronext CEO Stéphane Boujnah about the exchange’s sustainability updates.

And finally, in a very timely piece, Professor Bob Eccles set out some hard truths about the ability of the private sector to provide the financing needed to achieve the SDGs.

Quote of the week

“It’s hard to find people who are anti-nature. There is not the backlash that’s usually associated with climate and ESG”

David Craig, co-chair of the TNFD, voices a growing hope in the sustainability sector that nature might avoid the climate/ESG political backlash

French fancy

Tariq Fancy, former chief investment officer of BlackRock Sustainable Investing, recently featured in headlines across the channel in an interview with French publication Libération.

The headline read: “Sustainable finance: against the ‘scam of the century’, a repentant banker green with rage.” (If you think that’s a mouthful, try it in French.)

Clearly, Fancy made a big impression on the author, who waxed lyrical about his “smooth cheeks”, “bulging biceps” and “electric battery intensity”. The jury is still out on whether this was meant as a compliment.

Larry Fink also earned several mentions in the (long) walk through Fancy’s career. “King Kong perched on the Empire State Building” and “a man far more powerful than a head of state”, with hands “stained with oil” was Libération’s take on the BlackRock CEO.

Fancy, unsurprisingly, still has nothing nice to say about his former employer. This time, he accused BlackRock of “commodifying the social and environmental anxiety of an entire generation to sell financial products, while blocking government action”.

During his short tenure at the asset manager, he said, he was “selling a placebo to treat cancer, a deadly distraction”. He is also not a fan of Fink, who he feels tricked him into taking on the role. “CEOs are just cynical,” he concluded.

Chart of the week

Keeping carbonisation on track

Companies across Europe are busily putting climate commitments into action and Euronext has been showcasing its sustainability commitments over the course of this week.

However, the exchange group’s decarbonisation efforts have been derailed in a slightly more literal fashion than might be expected.

As with many businesses that don’t revolve around steel mills or oil rigs, business travel is a major source of emissions for Euronext, and teams at the firm are given carbon budgets for their business travel.

One well-travelled route is between Euronext offices in Milan and Paris, and switching to train travel between the two cities has been a significant contributor to emissions reduction.

However, the firm’s emissions strategy has hit a temporary setback, as the route runs through the Alps and a landslide in the Maurienne valley in late August has severed the rail link, complicating travel somewhat.

A carbon neutral record?

Over the past year, as advertising watchdogs have started clamping down on greenwashing, various organisations have been rethinking the wisdom of claiming to be carbon neutral.

For sheer speed of U-turning on the issue, however, it seems unlikely that anyone will be able to beat Polish utility PGE.

Less than a week after committing to achieve climate neutrality by 2040, the state-controlled power producer has withdrawn its strategy.

As part of the target, it had pledged to phase out coal, Poland’s main source of power for electricity and heat generation, by 2030.

The commitment was reversed in response to complaints from coal miners, who said it would jeopardise their agreement with the government for coal mines to be kept in production until 2049.

Today’s letter was prepared by the RI editorial team