In the Loop: Weekly news and views from Responsible Investor

Welcome to our newsletter In the Loop! In this new weekly subscriber-only alert, the Responsible Investor editorial team will bring you their latest sustainable finance observations and share some of the stand-out news and views of the week. We hope you like it – please let us know what you think!

Brad Lander vs Vivek Ramaswamy 

For a little light viewing before the weekend, watch New York City comptroller Brad Lander go head to head with anti-ESG activist and presidential hopeful Vivek Ramaswamy on CNBC earlier this week. The points made on both sides will be familiar to anyone in ESG and neither managed a knockout blow, but Lander did get in a few jibes at “grifting 2024 presidential candidates”.

On the topic of grifting, the anti-ESG fund house co-founded by Ramaswamy appears to be struggling to pick up business in red states. As previously reported, Strive’s proxy and advisory services wing secured a contract with the Indiana Public Employees Retirement System to conduct a review of its investment policy and provide additional consulting services. According to documents seen by RI, Strive has also been making the rounds among peer funds in red states.

However, funds do not appear to be particularly receptive. Of those that received pitches, a spokesperson for Oklahoma TRS confirmed to RI that it had not initiated any discussions with Strive and was not in negotiations for any contract. A spokesperson for North Dakota’s Retirement and Investment Office denied that any pension fund it was associated with was close to finalising a contract. RI also understands that, while the Pennsylvania Treasurer had informal discussions with Strive, it did not contract the firm for any services.

The week in RI

GFANZ was in the spotlight again this week. In an exclusive interview, Amalgamated Bank CEO Ivan Frishberg told RI that members of the Net-Zero Banking Alliance were being “left at the altar” by policymakers. Then on Thursday, we broke the news that US mutual fund manager Green Century had left the Net Zero Asset Managers initiative. Keep an eye out for further news from the alliance next week.

RI was also first with the news this week that ESG veteran David Russell will step down from USS Investment Management in June after 22 years. No word yet on his plans for the future, but we wish him well and look forward to hearing more in due course.

Other highlights include the European Supervisory Authorities’ consultation paper on SFDR changes, the Climate Bonds Initiative’s certification push and, from the US, our deep dive into Exxon’s failed request to exclude two climate proposals by evoking a recent SEC rule change (and the somewhat baffling letters sent to the filers as part of the process).

Quote of the week

“And then we have the ESG culture, perpetrated by many in big corporations, where the focus is on hitting a diversity target or a social target rather than actually generating money for employees and for the country.”

Anti-ESG sentiment from across the pond? Former UK Prime Minister Liz Truss weighs in on ‘ESG culture’ during a speech at US think-tank the Heritage Foundation

The Commission Who Stole the Holidays

Is the European Commission a bit of a Grinch? Let’s look at the evidence. Draft criteria for including some gas and nuclear in the taxonomy were notoriously published on New Year’s Eve in 2021, and most recently the EC published a major taxonomy consultation just before Easter. It’s Eid next week so we’re bracing ourselves for more!

So far, it appears the taxonomy Easter egg is taking some time to digest. Most people contacted by RI for comment said they need more time to analyse the proposed criteria for the four non-climate environmental objectives and other suggested updates.

As expected, some aviation and shipping criteria have caused a stir (NGO Transport & Environment slammed the proposed criteria as a nail in the coffin for the regulation) and, as RI noted last week, the commission has kicked the can further down the road on controversial criteria for forestry and agriculture.

ShareAction told RI: “It’s a shame that the EU Taxonomy, while looking promising, is still missing one of its most crucial elements. Criteria for the agriculture, forestry and fishing sector must be urgently developed, as the sector contributes more significantly to pesticide-related pollution and to biodiversity loss in general than any other sector.”

Poachers out in force for PRI staff

Since February, the PRI has announced the departure of seven team members. Among them are its chief financial officer, chief sustainability officer, chief signatory relations officer, head of fixed income and regional heads for Africa and LatAm.

On the new pastures that the seven are moving on to, it’s a mix. Lorenzo Saa – PRI’s former chief signatory relations officer – has joined Clarity AI as its chief sustainability officer, while former CSO Shelagh Whitley is now senior director of sustainable finance at ClimateWorks Foundation. Darron Scorgie has joined Old Mutual as head of responsible investment and Eduardo Alfonso Atehortua Barrero is now a sustainability and climate change partner at Deloitte.

Former head of fixed income Carmen Nuzzo has been appointed executive director of the Global Climate Transition Centre and finally, Susanne Dräger, who was a senior specialist of sustainability reporting, is now strategic affairs director at the IFRS Foundation.

The PRI told RI it will announce replacements in due course and attributed the departures to “normal staff turnover”.

Banking on fossil fuels?

The path to net zero was never likely to be smooth or straight, and the latest Banking on Climate Chaos report has given an insight into just how jagged and winding the route being taken by some is.

Take Caixabank, a founding member of the Net-Zero Banking Alliance (NZBA), which reportedly ramped up its fossil fuel financing 364 percent to $1.73 billion last year. A spokesperson for the Spanish lender said the increased exposure was down to the war in Ukraine, adding that it would not alter its 2030 decarbonisation targets.

Another NZBA member, ANZ, was found to have increased its fossil fuel financing 148 percent to $2.2 billion. It too remains committed to its 2030 target to “reduce absolute emissions from its upstream oil and gas financing by 26 percent”, a spokesperson for the Aussie bank said.

Today’s letter was prepared by the RI editorial team.


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