RI ESG Briefing, May 23: Bank of England, KLP, La Française, GIIN, UN Capital Development Fund

The latest ESG market developments


The Bank of England has released a framework to help insurers comply with the Prudential Regulatory Authority’s recent Supervisory Statement on managing climate change risks. The framework has been developed by a group of experts from the re/insurance industry, alongside individuals from the PRA.

India has spent more investing in solar power than coal for the first time in its history, according to a report tracking energy investments by the International Energy Agency. This was driven by policy and the plummeting cost of solar.

Senator Michael Bennet, a Democratic presidential candidates, has proposed using $1trn in federal funding to set up a climate bank to catalyse $10trn in “private sector innovation and infrastructure investment.

Hong Kong has become the first Asian government to sign up to the Green Bond Pledge, an initiative developed by international climate finance and environmental groups.

Franco-German financial services group, Oddo BHF Asset Management, has removed coal investments from its ESG-linked portfolios as part of a wider strategy to combat climate change, the firm has announced. ESG portfolios account for €6.6bn (12%) of the company’s overall assets.


The Global Impact Investing Network (GIIN) has launched a new system for managing impact. IRIS+ provides sets of core measurement metrics around themes such as affordable housing or financial inclusion.

The Independent Review of the UK’s 2015 Modern Slavery Act was published and “laid before” parliament yesterday. It calls for a “central government-run repository” for UK companies’ modern slavery statements – echoing calls from faith investors.

The United Nations Capital Development Fund (UNCDF) is teaming up with Earth Security Partnerships (ESP), the non-profit arm of London-based global advisory firm Earth Security Group, on a project producing data to drive finance to the SDGs. The partners will highlight opportunities for promising SDG-positive investments, presented in an annual impact intelligence report.

The Conference Board, the US-based membership organisation and research organisation, is renaming its Governance Center as the Environmental, Social and Governance (ESG) Center. The new department will also incorporate TCB’s Sustainability and Corporate Citizenship and Philanthropy Institutes.h6. Governance

Norwegian private pension fund manager KLP has sold shares of NOK97m (€9.9m) in Vale after deciding to exclude the Brazilian miner Vale from its portfolio. KLP cited the accident that killed at least 230 in Brumadinho earlier this year as “an unacceptable risk” amounting to “serious human rights violations and environmental damage”. KLP Head of Responsible Investments Jeanett Bergan said: “It is clear that what Vale did after the 2015 accident was not sufficient to prevent new accidents and serious consequences. With two such serious accidents it is difficult to have confidence in the company’s ability to safeguard safety.”

La Française, a Paris-based asset manager, has signed up to the Transition Pathway Initiative (TPI), the Church of England-led body which assesses companies’ preparedness for the energy transition.

A lobbying resolution filed at US pharmaceutical firm Mallinckrodt by the United Church Funds was supported by 79.7% of shareholders. It was one of three shareholder resolutions filed at the company, implicated in the US opioid crisis, that got majority support from shareholders. A motion from Mercy Investment Services calling for a report on the measures it has taken since 2012 over the crisis got 78% backing. Link

Maryland Comptroller and Vice-Chairman of Maryland’s State Retirement and Pension System, Peter Franchot, has called for the full divestment of state assets from Alabama over the latter’s anti-abortion bill

The Investment Association, the UK fund management industry group which represents £7.7trn (€8.9trn) in assets, has reprimanded nearly 100 firms lagging on board gender diversity, the Guardian reported.

Boeing is facing a securities fraud class action lawsuit brought by investors who purchased shares between January 8 and March 21 of this year after its 737 MAX model was involved in two crashes. The suit alleges that Boeing concealed the full extent of its safety problems caused by the 737 MAX’s larger engines and subsequently withheld necessary safety options unless they were purchased as an optional feature. Additionally, Boeing provided the safety certification for the model despite the underlying conflict of interest.

The Board of Goldman Sachs has been served a letter on behalf of two pension funds, the Cleveland Bakers and Teamsters, demanding an investigation and legal action, if necessary, against individuals and entities involved in the Malaysian 1MDB financial scandal. The letter notes that Goldman has put aside $1.9bn more than its reserves earmarked for legal matters.