RI ESG Briefing, Jan. 23: New York City divestment RFP, Bank for International Settlements, LD Pensions, EFRAG, Arjuna

Environmental

Around 100 companies – including asset managers, ESG research houses, index providers, NGOs, and pension funds – have shown an interest in New York City’s pioneering fossil fuel divestment request for proposal
(RFP), according to a list released by New York City Comptroller Scott Stringer’s office. The RFP, which was released to the market in December, was downloaded by representatives of investment giants such as Goldman Sachs, Blackrock and State Street. SRI specialists such as Impax Asset Management and Trillium Asset Management also were named in the list along with US pension funds New York State Common Retirement Fund and CalSTRS. The deadline for proposals is February 8.
Danish pension scheme LD Pensions is in the “green” again for the first time in months, with the biggest growth in the last month seen in its ESG portfolio, the fund has reportedly said. The ESG portfolio rose by 8%, its Danish stocks by 6.2%, and its global stocks by 7.4%. The scheme had seen a negative 12 months across all three portfolios, which it has said was caused by the financial instability in 2018.
New York State Governor Andrew Cuomo has announced a landmark plan to “aggressively put the state on a path to economy-wide carbon neutrality” while prioritising the news of lower income residents in an initiative called the Green New Deal.
Index provider FTSE Russell has launched a new green bond index series tracking the Chinese market called the FTSE Chinese (Onshore CNY) Green Bond Index Series.
Lyxor International Asset Management has listed a green bond ETF on Nasdaq Stockholm called the Lyxor Green Bond ETF, which tracks the Solactive Green Bond EUR USD IG Index.
Enel Finance International has launched a €1bn green bond, its third on the European market, expected to be listed on the Irish and Luxembourg Stock Exchanges, and the multilateral trading facility “ExtraMOT PRO”.

Social

Thomas DiNapoli, New York state comptroller and trustee of the $213.2bn New York State Common Retirement Fund, has urged companies to report on their inclusion of people with disabilities. In a letter to 49 US companies, including the likes of Apple, McDonald’s and Nike, DiNapoli called on the firms to register and participate in the Disability Equality index, an initiative designed to address the lack of information about and disclosure of corporate policies on disability inclusion by creating a benchmarking tool that allows companies to self-report their disability policies and practices. DiNapoli said: “Studies have shown that businesses that commit to disability inclusion outperform their peers. Disability inclusion is an ESG issue that, as a long-term investor, the fund will continue to address.”

The Natural Capital Finance Alliance (NCFA), in collaboration with PwC, is launching “the world’s first step-by-step guide to help financial institutions conduct a rapid natural capital risk assessment” to better understand how environmental degradation may affect their financial future. The in-depth guide, piloted by banks in Colombia, South Africa and Peru, builds on the November launch of NCFA’s web-based tool ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure).h6. Governance

Regulators can strengthen investor protection by “raising accounting and disclosure standards, and promoting best practices in corporate governance”. That’s according to a new report from the Bank for International Settlements’ Committee on the Global Financial System (CGFS) called Establishing viable capital markets.

Citigroup has become the first US firm to agree to disclose data on its “global median gender pay gap”, following a shareholder proposal asking the bank report on the gap between male and female employees across race and ethnicity, including base, bonus and equity compensation. Citi’s analysis shows that its median pay for women is 71% of the median for men, and the median pay for US minorities is 93% of the median for non-minorities. Investment management firm Arjuna Capital, which filed the median pay gap proposal, has withdrawn it in response to the news.

EFRAG, the European Financial Reporting Advisory Group, is seeking candidates for a new Project Task Force on Climate-related Reporting. ​The European Reporting Lab @ EFRAG’s first project will be on climate-related reporting, consistent with the European Commission’s (EC) Action Plan Financing Sustainable Growth. The deadline for applications is January 26 and the first meeting of the European Lab Project Task Force on Climate-related Reporting​ will be on February 26.

The Abu Dhabi Securities Exchange (ADX) has joined the United Nations Sustainable Stock Exchanges (SSE) initiative, a voluntary commitment to promote sustainability and transparency in capital markets. The announcement came a week before the exchange held two workshops guiding companies on how to meet investor needs on ESG information.

Chemical multinational Solvay has linked the cost of a €2bn revolving credit facility to emissions reduction commitments, in an agreement with nine banks. Last year, Solvay announced it would cut its greenhouse gases by 1 million tonnes by 2025, relative to 2017 levels. Participating in the revolving credit facility, which matures in 2023, are BNP Paribas Fortis, Citibank, Commerzbank, Crédit Agricole, HSBC, ING, JPMorgan Chase Bank, KBC Bank and The Bank of Tokyo-Mitsubishi UFJ.

The Public Institution for Social Security (PIFSS), a Kuwaiti pension fund, is reportedly suing UK-based Man Group for $156m over alleged secret contracts between the asset manager and a former PIFSS executive between 1996 to 2013. In response Man Group released a statement saying it will “dispute any claim and intends to vigorously and robustly defend any proceedings”.

The International Institute for Sustainable Development (IISD) has designed a three-year policy plan for a mandatory implementation of the TCFD recommendations in Canada. A 50-page report, entitled Leveraging Sustainable Finance Leadership in Canada, proposes concrete steps for all financial stakeholders to take in next three years, including legislation and involving the Central Bank and other authorities. The report is authored by sustainability expert Céline Bak.