RI ESG Briefing, January 26: Norges Bank takes Raytheon arms company off blacklist

Environmental

The Asian Infrastructure Investment Bank, a recently-created development bank with nearly $90bn of backing from some 80 regional and non-regional members, has launched the final consultation on its energy strategy. The bank, whose members include Russia, China, India, Germany and the UK, says the strategy will “guide its future engagement with and investments in the energy sector”, and expects it to follow its ‘lean, clean and green’ values. 40 responses were received in the first round of consultation, from government agencies, private sector companies and civil society bodies. The draft is now up for discussion until March 6.

CDP has praised 29 companies in a newly-launched “supplier engagement leader board”, looking at how firms work with their suppliers to slash carbon emissions and lower climate-related risks in supply chains. Brazilian petrochemical company, Braskem SA, IT firm Hewlett-Packard and Dutch tech body Royal Phillips were among those named. The report, done in partnership with the Carbon Trust, also found that suppliers slashed their carbon emissions by some 434 million tonnes in 2016 – more than France’s entire greenhouse gas emissions for 2014.

The International Energy Agency has told Poland to step up its efforts to transition to a cleaner economy, saying recent changes to regulation and support mechanisms for renewable energy have had negative implications for investor confidence. “The future of renewable energy in Poland looks uncertain,” said Fatih Birol, Executive Director of the IEA. Poland recently took the market by surprise by issuing the world’s first sovereign green bond. While many came out in support of the deal, which was seen to show leadership on green issues, others criticised the move for not being reflective of Poland’s wider efforts on tackling climate change.

Sustainability research house oekom has seen “significant” growth in the past year, it claims, and its team will exceed 100 people by March. The company said its analyst and account-management teams “grew sharply” in 2016, as it launched offices in London and New York. Its client base “also grew significantly” and now includes more than 160 asset managers and owners in 13 countries, with combined assets of around €1.5trn. oekom said the momentum behind ESG was “irreversible”, despite the election of Donald Trump in the US and Brexit proceedings in the UK.h6. Social

Investment giant Norges Bank has removed US arms company Raytheon Co from its investment blacklist, following a recommendation from the Council on Ethics. Norges Bank manages Norway’s government pension fund, and said the decision was made because “the company no longer has any activities with production of cluster munitions”. Raytheon was originally excluded from the fund’s investment universe in 2005 due to its involvement in the production of controversial cluster bombs.

Financial technology group ayondo has opened its Social Trading Championship, which awards the best trading strategies focused on sustainability. In its second year, the competition is accessible on next-tradingstar.com globally. The Social Trading Championship’s sign-up deadline is 6 February 2017, when the competition officially begins, and it will run till 1 February 2018. During the competition, monetary prizes will be awarded to top traders. Sarah Brylewski, Chief Marketing Officer of ayondo said the firm “uses its championship to support risk-aware Social Trading signal providers, whose trading strategies are focused on sustainability and a continuous performance increase”.

Aegon, a Dutch life insurer, and auxmoney, a German peer-to-peer lending and credit rating platform, have announced an extension of their ongoing partnership. Aegon said it will invest €15 million in auxmoney’s crowdfunding loan marketplace, which matches borrowers and investors outside the banking industry, as it fits the Dutch insurer’s commitments to promote financial inclusion. According to Aegon’s data auxmoney has a 60% share of the German P2P lending market.

Governance

Sustainalytics, the ESG research house, has published a report identifying key themes for ESG in 2017, including data security, burgeoning sustainability markets and trends, and the push for improved corporate transparency. 10 investment topics are analysed under the following headings: The blockchain conundrum; Automakers smarten up; The art of digital defence; US utilities warm to solar; The energy storage charge; Drug pricing under scrutiny; The upside of diversity; The rise of plant-based proteins; Tackling tax avoidance in the EU; and Revealing the pay gap. The full report, entitled, 10 for 2017: Investment Themes in a Changing World, is available here.