Biodiversity Barbie
The UK launch of the recommendations of the Taskforce for Nature-related Financial Disclosures (TNFD) on Monday was held in the elegant premises of the Royal Society, surrounded by the names and portraits of the institution’s illustrious alumni – nearly all, unsurprisingly, men.
So it was perhaps appropriate that Thérèse Coffey, secretary of state for the environment, food and rural affairs, gave a nod in her speech to the world’s latest feminist icon.
After the launch of the Dasgupta Report and the adoption of the Kunming-Montreal Global Biodiversity Framework, she said, “for the first time it felt that nature was Barbie and climate was Ken”.
Coffey’s fine words about “restoring nature and mobilising green finance in the UK” rang rather hollow, however, given her government’s recent rowback on climate policy and weakening of support for nature, not to mention repeated scandals about sea and river pollution.
Using her analogy, it seems fair to say that the UK is currently neither Biodiversity Barbie Land nor Climate Ken-dom.
(Image, courtesy of Mattel Inc, depicts 2019 National Geographic Career Barbie.)
TNFD anomaly
Other speakers at the launch included TNFD co-chair David Craig, who may have got a bit carried away in the excitement.
During his speech, he stated: “Aviva Investors, BlackRock and NBIM are setting the expectation for the companies in their investment portfolio to adopt TNFD.”
Aviva Investors did indeed indicate this year that it expects investee companies to begin reporting against TNFD “within a reasonable timeframe”.
For the other two managers, the picture is more nuanced.
NBIM has said that companies with agriculture, forestry and other land use activities within their operations and value chains should “incorporate emerging international best practice for measurement and target-setting, particularly frameworks such as the TNFD and Science Based Targets Network (SBTN)”.
Meanwhile, BlackRock has named nature as a stewardship priority – but has at no point suggested that it would require companies to report according to TNFD.
Asked to explain the anomaly, TNFD pointed us to a slide entitled “Investor stewardship signalling”, which featured quotes from Aviva, NBIM and BlackRock. The latter reads: “New for 2023, BlackRock has also noted that recommendations from the TNFD may prove useful to some companies.”
At RI, we are extremely supportive of the TNFD and are sure that there was no deliberate representation here. But given the interest it generated on LinkedIn and elsewhere, we thought it was important to set the record straight.
Quote of the week
“It is tempting to think that we can smooth out the cost of the transition by pushing back climate targets… Procrastinating is likely to increase the bill we will end up having to pay”
ECB president Christine Lagarde warns against putting off climate action at a joint climate event with the EIB and IEA
The week in RI
Biodiversity topped the agenda again with the launch of Nature Action 100. Our analysis of the lists of target companies and investor signatories found a few surprises, particularly the prominence of Chinese firms in the former.
We also reported on ISSB’s plans to prompt companies to consider the climate-nature nexus through its existing standards and looked at how UK pension schemes are thinking about TNFD reporting.
In non-nature news, the big story was DWS’s $19 million settlement with the SEC over greenwashing claims.
Elsewhere, UK financial regulators announced plans to strengthen mandatory DE&I disclosures, ICMA called for better disclosure on M&A activity and SLB targets in its latest update, and Singapore’s MAS mooted coal phase-out carbon credits.
Also in Asia, GPIF’s latest sustainability report found that UK and Canada government bond holdings are most vulnerable to climate risk.
And finally, Will Martindale – formerly of Cardano and PRI – talked to Dominic Webb about his new sustainability consultancy and why the next European Commission should pay more attention to stewardship.
Missing in action?
Deep – if arguably a bit belated – concern about the UK government’s green policy rowback was raised by the PRI, IIGCC and UKSIF in a joint letter this week.
Managers including Aviva Investors, USS and Nordea Asset Management backed the letter, representing £1.5 trillion in assets – which might seem a lot, until compared with the total assets under management of the coordinating investor bodies.
UKSIF alone has more than 300 members, representing £19 trillion in AUM, according to its website. Given the increasing focus put on policy advocacy, would it be fair to ask why so many were missing in action?
RI goes to Asia
The next quarter will see a flurry of sustainable finance events in and around Asia, and our reporter Khalid Azizuddin will be on hand to report back.
Highlights will include next week’s PRI in Person, when the great and the good of ESG descend on Tokyo; the Asian Corporate Governance Association’s annual conference in Mumbai; and our very own RI Asia conference, which will mark a triumphant return to Singapore following our inaugural foray into Southeast Asia in 2022.
You can book your spot to attend RI Asia here.
Khalid is also looking forward to taking a deep dive into the technicalities of supervising climate risk at a joint conference organised by the Malaysian central bank and the NGFS’s research network INSPIRE next month.
Also on his to-do list is following up some of the more intriguing developments we have seen from Asia this year, such as the creation of private capital mechanisms to finance coal phase-outs, the development of transition-orientated traffic light taxonomies, using digitalisation and AI to close data gaps, and legislative initiatives on due diligence.
Khalid will be based in Kuala Lumpur until January and is willing to travel, so do drop him a line if there are any events or meetings of interest.
Back to Canada
In other upcoming travel plans, we look forward to returning to Toronto on 17-18 October for RI Canada.
A great speaker line-up will be headed by Kathy Bardswick, chair of the Sustainable Finance Action Council, and Sarah Chapman of Manulife, while plenaries will focus on key areas such as net zero, biodiversity, standard-setting, the Canadian regulatory landscape and collective engagement.
The event will also feature expert roundtables on cutting-edge topics including responsible forestry, carbon removal, transition minerals and methane.
Our reporter Gina Gambetta will be attending on and moderating several sessions. If you’d like to connect with her while she’s in town, email gina@responsible-investor.com.
Full details on the agenda and registration are available here.
Today’s letter was prepared by the RI editorial team.
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