RI ESG Briefing, June 6: Unilever, California green bonds, BHP, Institutional Investors Group on Climate Change, Broadridge, Sustainalytics

The latest ESG market developments


Unilever CEO Alan Jope has written an open letter to the trade associations and business groups of which it is a member, asking them to confirm whether their current lobbying position on climate policy “is consistent with Unilever’s position and the 1.5 degree ambition set out in the Paris Agreement”. “The climate crisis has now reached a point where there can be no room for misinterpretation on the scale of the challenge, or indeed on the importance of regulatory measures to support businesses in driving the transition to a net zero emissions economy,” he wrote.

California State Treasurer Fiona Ma has announced that “California intends to lead in a meaningful way” by developing a “functioning green bond market that will be a model for other states and countries”. She also said that infrastructure financed by state and local government green bonds will now be promoted as “climate-ready”. The comments were made at the inaugural meeting of the California Green Bond Market Development Committee

Ireland: ESB, a state-owned utility, has issued the first Irish corporate green bond to fund eligible green projects including network connections for onshore wind farms, electric vehicle charging infrastructure and renewable energy generation.

The Institutional Investors Group on Climate Change (IIGCC) is to launch an investor tool for analysing the physical risks and opportunities arising from climate change. The resource will come out of a new project, called Understanding Climate-Related Physical Risks for Investors, which is being developed with support from UK pension fund the Universities Superannuation Scheme, and technical input from specialist advisory firms Acclimatise and Chronos Sustainability.


Impact bonds are increasingly failing to meet minimum standards for sustainability, according to a new report from Insight Investment. The report said the firm’s inhouse rating scheme marked 10 green bonds as “red” on its traffic light score system, up from just one in 2018. The score shows suitability for inclusion in credit portfolios, with “red” often indicating concerns on how transparency on how proceeds will make an environmental difference.

The Ethics Council for Sweden’s AP funds has reportedly recommended excluding the cannabis sector in its 2018 report. Other areas identified by the council as problematic include Facebook, deforestation in South America, mining dams in Brazil and pesticides.h6. Governance

Mining giant BHP is reportedly facing a double whammy class action over the deadly Samarco dam collapse, following a court ruling that two claims against the firm should be combined. Nearly 300 institutional investors are among the 30,000 shareholders which will now pool together in a single claim against BHP, after the Full Court of the Federal Court found that boutique law firm Phi Finney McDonald (PFM) and Maurice Blackburn should work together. The law firms allege that BHP shareholders suffered losses due to the miner’s poor safety and environmental risk disclosure leading up to the 2015 dam collapse that has resulted in criminal prosecution for homicide charges for BHP executives.

The UN-backed Principles for Responsible Investment (PRI) has developed a free due diligence questionnaire to assess the ESG capabilities of real estate investment managers. The questionnaire is based on the PRI’s annual assessments and respondents who are also signatories can populate the questionnaire with their previous submissions to the PRI.

Broadridge Financial Solutions, the “proxy plumbing” firm, has launched a blockchain-based shareholder disclosure platform as part of a wider solution to assist investors meet their obligations under the EC’s updated Shareholder Rights Directive.

The top barriers to ESG integration among equity and fixed income investors in the Asia- Pacific region are limited understanding of the area, lack of data, and cultural issues, according to new research by CFA Institute and PRI. A series of 23 workshops with financial professionals across Asia Pacific informed the research.

A proposal filed by NorthStar Asset Management, a Boston-based SRI firm, at department store corporation TJX Companies requesting the disclosure of prison labour in its value chain has received the support of 38% of shareholder votes. NorthStar has filed similar proposals at Costco and Home Depot, receiving 28% and 30% support respectively.

Sustainalytics has launched a stock screening product and engagement service, its first product release building on the capabilities of recently acquired engagement specialist GES International. The Global Standards Screening product evaluates companies’ business practices against the UN’s Global Compact and the Global Standards Engagement service will engage with non-compliant firms on behalf of investors.

The Woods Hole climate research institute has reportedly partnered with consulting firm McKinsey and its think tank arm the McKinsey Global Institute in a bid to focus engagement efforts on corporates. The Center previously worked with national governments although the rollback of environmental protections in the US and limited success has led to a rethink of this approach.