RI ESG Briefing, August 8: 250+ attendees at Japan’s first TCFD meeting

Environmental

Japan’s TCFD Consortium Working Group on Information Use held its first meeting this week, with over 250 participants. The working group, one of two, focuses on how investors should use climate-related disclosures in decision making.
The Royal Bank of Scotland (RBS) has ruled out financing for drilling in the Arctic wildlife refuge, joining the likes of Barclays and National Australia Bank. A new framework prohibits project-specific lending for “projects involving oil exploration and production operations in the Arctic” and restricts lending to any company that engages in these activities.
Standard Bank Group has reportedly restricted funding to coal projects, two months after shareholders passed South Africa’s first resolution calling on a bank to adopt a policy on the fossil fuel. The policy to only lend to coal-fired power projects meeting international standards on size and emissions applies across the whole group, excluding Liberty. A policy on lending to mining operations is forthcoming.
BNP Paribas claims that investment in renewable energy combined with battery-powered vehicles produces six to seven times more useful energy than vehicles running on gasoline at $60 per barrel. According to the study, oil prices would have to be in the range of $9-10 a barrel for gasoline powered vehicles to remain competitive.
Amnesty International has announced its divestment from the fossil fuel sector because it is “at odds with the organisation’s mission of protecting and championing human rights”. The decision was taken at the charity’s Global Assembly – its highest decision-making forum.
SPOTT, an initiative by the Zoological Society of London supporting sustainable commodity production and trade, says only 6% of major forestry producers are assessing the impacts of climate change. This is based on an analysis of 97 companies controlling an estimated 46.6 million hectares of carbon and biodiversity-rich tropical forests.

Social

State Street faced a blow in the legal battle over ownership of the Fearless Girl statue that it is fighting against Australian superfunds Cbus and HESTA and the statue’s creator Kristen Visbal. State Street, which commissioned Visbal to create the original New York statue, filed a breach-of-contract lawsuit against Visbal in February after Cbus and HESTA paid the artist to create a replica. In the latest development, a New York judge denied State Street’s motion to have Visbal’s counterclaim dismissed.
The Principles for Responsible Investment (PRI) has launched a consultation into ESG and active ownership in passive investing. The paper, titled ‘How can a passive investor be a responsible investor?’, examines the impact of the rise of passive investing on ESG factors, as well as at the risks involved.
Sanlam Investments – a South African asset manager with £49bn in assets globally – has chosen Sustainalytics’ ESG Risk Ratings to inform their investment decision-making process.h6. Governance

The PRI has four new Mexican signatories. Two asset owners, Afore Citibanamex, one of the largest Administradoras de Fondos para el Retiro or Retirement Fund Administrators) and Fondo Nacional de Infraestructura, a state-owned investment vehicle; and two asset managers: Fondo de Fondos and Angel Ventures. For more on Mexico, click here.
The Pension Protection Fund (PPF), the pensions lifeboat for UK DB schemes, is seeking a provider of class action claims and recovery services according to a recent tender. The contract, which is currently unvalued, is for a maximum of four years and will be subject to renewal annually.
The advisory board of the UK Local Government Pension Scheme (LGPS) will recommend that statutory guidance for the LGPS is amended to incorporate climate change and ESG considerations, according to reports. The board is currently developing a number of amendments which will be presented to the newly-appointed Secretary of State for Housing, Communities and Local Government, Robert Jenrick. The proposals aim to bring LGPS guidance up to mark with new ESG disclosure requirements for trustees of private pension schemes.
The Norwegian Government Pension Fund has outlined expectations that Norwegian companies make board member positions attractive to international candidates by ensuring competitive salaries. The CEO and Equities director of the fund recently authored an op-ed which compared the low numbers of foreign board members and senior management in Norwegian companies to Denmark.
International transport unions are piling pressure on Ryanair to allow its workforce to elect at least three directors to its board, urging the budget airline to step up in line with UK and German corporate governance norms. The International Transport Workers’ Federation (ITF) and European Transport Workers’ Federation (ETF) said in a letter to Ryanair that board seats for workers would ensure labour standards across the company at a time of corporate restructuring.
Fitch Ratings has launched an ESG ‘heat map’ for corporate issuers, designed to help users understand the impact of ESG topics on credit ratings across 51 different sectors. The map allows analysis of individual entities, as well as aggregated information about a defined percentage of issuers in each sector.
Bondholders of Suzlon Energy, India’s largest wind turbine maker, are planning legal action against the firm after it defaulted in repayment last month. Canadian asset manager Brookfield had proposed taking over Suzlon provided banks waive 60-70% of the debt, but no agreement was reached.