RI ESG Briefing, May 8: Norges Bank backs integration of sustainability reporting frameworks

The round-up of the latest ESG market developments


The Netherlands is to issue a green bond. The bond will have a maturity of 20 years and a target volume of €4-6bn in 2019. Within a few years after the initial issuance the bond will be tapped to a benchmark size of approximately €10bn. The proceeds will be allocated to green, or climate-related expenditures and investments undertaken by the government.

Fund manager Columbia Threadneedle Investments called on the UK government to issue green gilts (government bonds) last week, after MPs passed a motion declaring an environmental and climate emergency. Simon Bond, Director, Responsible Investment Portfolio Management, said issuing green sovereign bonds would “drive the step change needed to address climate change and broader ecological and social issues”.

Danish energy firm Ørsted is to issue green senior bonds in the UK market to finance investments in offshore wind projects. Tranches may include benchmark 8 year and 14-year nominal fixed rate tenors, alongside a potential index-linked tranche with an expected 15-year maturity. The company, formerly DONG Energy, has appointed Barclays Bank PLC, Goldman Sachs International, Morgan Stanley & Co. International PLC and NatWest Market PLC as joint lead managers on the issuances.

The Council of Cambridge University in the UK has agreed to produce a report looking into the “advantages and disadvantages, including the social and political ones, of a policy of divestment from fossil fuels”. This followed an escalating grassroots campaign among staff and students calling for divestment from the sector.

The Hong Kong Special Administrative Region has become the first Asian signatory to the Green Bond Pledge. A government spokesperson said: “Hong Kong’s Climate Action Plan 2030+ has set out our 2030 target, which is to reduce Hong Kong’s carbon intensity by between 65% and 70%, compared with the 2005 level. We are sparing no efforts to make this happen.”

Norwegian private pension fund manager KLP announced that it has pulled €328m from 46 companies profiting from coal. It said it now excludes all companies with over 5% coal share of revenue, including Germany’s RWE, South Africa’s Sasol and miner BHP Billiton. Heffa Schuecking, Director of German NGO Urgewald, commented: “While other financial institutions are setting coal phase-out dates for 2026 or even later, KLP has decided to act now. Other investors and banks need to follow KLP’s example and speed up their departure from the coal industry”.


Index and ESG firm MSCI has launched MSCI Beon, a “next-generation open analytics platform” that integrates the data provider’s tools across ESG, Analytics and Index with user and third party data and analytics. Press materials said: “Data may have limited value when trapped in separate systems. MSCI Beon is a single, open platform that harnesses advanced proprietary technology to connect disparate sources and aims to improve institutional investors’ current portfolio analysis capabilities.”

MSCI has identified four companies with more risks associated with mining waste (“tailings”) than Vale – the Brazilian miner behind the Brumadinho mine which collapsed killing hundreds earlier this year. According to the report, which looks at the causes and repercussions of tailings dams collapses, Jiangxi Copper Company, Tongling Nonferrous Metals Group, Companhia Siderurgica Nacional and Gerdau have a higher proportion of global mine production value in high flood-risk areas and lag in environmental performance in comparison with Vale.

Robeco has launched an education programme focused on sustainable investment, which it has rolled out to employees at Standard Chartered Private Bank in Hong Kong, Singapore, Dubai and the UK. The platform, launched in 2018, is a series of e-learning modules that gives background information and insights on areas such as sustainability investing.h6. Governance

Norges Bank Investment Management (NBIM), the arm of the Norwegian Central Bank which runs the Norwegian Government Pension Fund Global, says it believes that the further alignment “and even integration” of corporate sustainability disclosure frameworks would “help reduce the reporting burden for issuers and enable investors to better compare information provided by companies over time”. NBIM made the comments in a letter to the Corporate Reporting Dialogue, the initiative of disclosure frameworks which in March launched a call for feedback about greater alignment.

NBIM has also said the Principles for Responsible Investment (PRI) is in danger of “drifting away” from its founding principles as the network considers incorporating SDG reporting into its annual signatory assessments. According to a letter on NBIM’s website, investors without specific environmental and social goals should not be expected to report on the SDGs (Sustainable Development Goals). Instead, a voluntary reporting framework should be developed for investors who wish to do so.

The Australian Council of Superannuation Investors (ACSI), the body which represents assets worth A$2.2trn (€1.4trn), has called for reform of the country’s framework for investment stewardship, saying it would support investors in responsible stewardship. It suggests revising Australian Prudential Regulation Authority (APRA) guidance to reflect the importance of ESG integration, arguing that the current guidance confuses ESG integration with ethical investing. It’s also calling for a “stewardship code that applies to all institutional investors”. It’s the third announcement from ACSI in recent weeks, following policies on corporate accountability, and culture & diversity.

Green Century Capital Management, the US fund manager, has hailed grocery giant Kroger’s commitment to develop and implement a no-deforestation policy. It follows a shareholder resolution on the issue led by Green Century. “Kroger is a giant company with an immense supply chain, so this new commitment is a big deal,” said Green Century President Leslie Samuelrich. “I’m pleased that Kroger listened to our concerns and is committing to improving its protection of tropical forests.”

RepRisk, the ESG data research firm, says it is applying the SASB Materiality Map from the Sustainability Accounting Standards Board in its risk management and compliance solutions. RepRisk is mapping its core research scope of 28 ESG issues against the 26 sustainability issues in the SASB map, which identifies those sustainability issues that are likely to affect the financial condition or operating performance of companies within an industry.

Securities Commission Malaysia has released its inaugural Corporate Governance Monitor report which presents thematic reviews on director independence and gender diversity on corporate boards and CEO remuneration. Finance Minister Lim Guan Eng said that adoption of corporate governance best practices have improved with a seven-percentage point increase in female board representation at the top 100 listed companies.

Non-financial rating agencies should include material biodiversity considerations within their ESG criteria and rating methodologies, according to a new report produced by WWF France in collaboration with Axa. The paper also calls for the launch of a Task Force on Nature Impacts Disclosures to “create the conditions to transition towards protection, restoration and promotion of biodiversity”. The report – titled ‘INTO THE WILD: integrating nature into investment strategies’ – was commissioned by the French Ministry of Environment (Ministère de la Transition Écologique et Solidaire) for consideration at the G7 Environment Ministerial Meeting.