PRI in Person Round-up: Snippets from San Francisco

Thousands of cities around the world – led by former New York mayor Michael Bloomberg – have committed to reducing carbon emissions equivalent to taking all US cars off the road or 1.4bn tonnes of CO2 per year by 2030, as part of the Global Covenant of Mayors for Climate & Energy.

There is no “silver bullet” to ESG integration and investors should focus on ESG analysis, not ESG investing, the PRI has concluded in two new reports on the issue published in partnership with the CFA Institute, the global association of investment professionals.

The PRI is seeking to raise the standard of responsible investing among its signatories with the launch of its Leaders’ Group, which will showcase investors at the “cutting edge” of ESG. The UN-supported body has also launched the PRI Awards to recognise excellent projects conducted by its signatories.

ESG research house Sustainalytics has launched a new set of ratings designed to help investors identify financially material ESG-related risks within their investment portfolios. Its ESG Risk Ratings distinguishes between five levels of risk: negligible, low, medium, high, and severe to help investors gauge the impact on their long-term investment performance.

Elsewhere, GRESB, the global ESG benchmark for real assets, has claimed that it is increasingly becoming the sector standard as it sees a 48% increase in funds participating in its Infrastructure Assessment, which scores funds out of 100 based on their ESG performance. 75 institutional investors representing over $18tn – including Californian pension giant CalPERS, Sweden’s government buffer funds AP1 and AP4, and UK academics’ pension pot USS – currently use GRESB’s data. Funds including Macquarie’s Super Core Infrastructure Fund and AMP’s Capital Diversified Infrastructure Trust were found to be among the leaders in GRESB’s 2018 results.

Unilever committed to supporting work in Sabah, Malaysia as part of the strategy to achieving a deforestation free supply chain and further reducing emissions. Unilever will help sustainably certify 60,000 hectares in Sabah, Malaysia as part of a program led by Forever Sabah, World Wildlife Fund (WWF) Malaysia and PONGO Alliance. Sabah is pushing to certify 100% of the state’s palm oil production to Roundtable on Sustainable Palm Oil (RSPO) certification by 2025. Link

Twenty-nine philanthropists pledged $4 billion over the next five years to combat climate change—the largest-ever philanthropic investment focused on climate change mitigation. The investments will support a vast array of strategies, with an emphasis on those addressing the five key challenge areas addressed this week at GCAS—healthy energy systems, inclusive economic growth, sustainable communities, land and ocean stewardship and transformative climate investments.The Sunrise Project, a renewables non-profit, has launched a new campaign, Insure Our Future, on the eve of the Global Climate Action Summit. The campaign aims to hold US insurance providers accountable for “perpetuating climate change” despite its stated aims of “mitigating future risk”. The launch coincided with a GCAS panel featuring California’s Insurance Commissioner Dave Jones, and a public announcement by AI-driven insurer Lemonade committing to never invest in coal. Link

Ninety percent of the world’s 200 largest industrial corporations are members of trade associations which actively oppose climate policy globally, while 30% have themselves directly lobbied against climate policy in the past 3 years. This was revealed in new research by InfluenceMap, a UK-based thinktank, also on the eve of GCAS. According to the report, companies have increasingly outsourced the most aggressive lobbying to trade associations “behind the scenes”, despite publicly backed the Paris Agreement. Read the full report here.

The Innovations arm of the California Clean Energy Fund announced that it is investing $3 million in cKers Finance’s Sustainable Energy Bond issuance for India.

The World Green Building Council (WorldGBC) announced that 37 signatories have joined the Net Zero Carbon Buildings Commitment including 11 businesses, 22 cities, and four international states and regions.

More than 60% of investors and 48% of issuers globally have an ESG strategy according to a newly released HSBC survey of 1,731 global entities including 863 issuers and 868 investors. Despite this inconsistency of ESG definitions remain a hurdle, with only 8% and 10% respectively of respondents aware of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

Nine of the world’s leading philanthropic foundations announced their intent to commit at least $459m million through 2022 to the protection, restoration, and expansion of forests and lands worldwide and the recognition of indigenous peoples’ and traditional communities’ collective land rights and resource management.

Bank of America and the European Bank for Reconstruction and Development (EBRD) hosted the event “Finance, Business and Climate Resilience: Physical Climate Risks and Opportunities”. The event focused on how financial institutions and businesses can share better market information to help factor physical climate risks into their operations, investment decisions, and financial and corporate reporting. During the event, the EBRD also released a new knowledge product – a web tool exploring how businesses can integrate information about physical climate change impacts into corporate and financial reporting.