Daily Briefing: UK launches carbon market

The latest developments in sustainable finance

The UK’s long-awaited emission trading scheme (ETS) has launched today, with carbon trading at £50 (€57) per tonne – compared with €52 under the EU’s long standing carbon market, which has seen record high valuations over the past 18 months. Last week, the EU's ETS set a record all-time high of €56 per tonne of carbon, trading up by 70% since January and by 195% over the last 12 months, according to Mark Lewis, Chief Sustainability Strategist, BNP Paribas Asset.    

Companies listed on the Taiwan and Taipei stock exchanges will now be able to access their Glass Lewis proxy research reports for free as part of an agreement between the two exchanges and the proxy advisor. Stanley Soosur, Country Head at Glass Lewis, said: “Our strategic partnership… will ensure that companies listed on these exchanges have a detailed understanding of the global proxy voting policies leveraged by our 1,300+ institutional clients”. Last year, Taiwanese regulators launched an initiative to provide free access to ESG ratings and commentary of listed Taiwanese firms from partners Sustainalytics, ISS and FTSE.

The Church of England’s Ethical Investment Advisory Group has published new guidance on human rights for the Church’s three investment bodies: the Church of England Pension Board, Church Commissioners and CBF Church of England Funds. The “theologically grounded advice” has been produced to help the trio to “invest in a way that is distinctly Christian and Anglican,” it said in a statement.

Sustainability tech specialist Diginex Solutions has partnered with Hafnia, which owns and runs oil tankers, on a new ESG reporting tool for the shipping industry. The pair will conduct a joint study on which indicators should be used by the industry, based on existing mainstream frameworks including the SDGs, TCFD and SASB, as well as sector-specific metrics. “The study’s objective is to create an ESG reporting framework tailored to the nuances of the shipping industry, helping organisations easily benchmark and measure their performance against peers,” they said in a statement. The new tool will use blockchain to help firms disclose and verify their data. 

Tobacco giant Philip Morris International (PMI) has scored 60 out of 100 in an ESG assessment by S&P Global Ratings. The US firm, which is held up by some as a leader in ESG and transition planning, scored 62 on environmental performance and 70 on governance. It bagged just 45 on social issues, however, which S&P attributed to “the negative health effects associated with tobacco use and the use of forced and child labour in the supply chain” – noting that PMI was ahead of its peers on its efforts to remove such practices. 

The research unit of Allianz has concluded that abolishing fossil fuel subsidies would be compatible with a ‘just transition’ to a low-carbon economy, as long as the changes were brought in incrementally. A new report concludes that, while fossil fuel subsidies account for 0.5% of global GDP – around the same size as the current funding gap for decarbonisation – axing such subsidies should be phased in to allow households to manage potentially higher energy costs. “The poorest households… get hit harder as they spend around 7% of their income on energy related expenditures compared to about 3% that the rich households spend,” said the research. “Nevertheless, abolishing fossil fuel subsidies should free enough fiscal room for redistribution,” it added.