Weekly ESG News: Financial Services and Insurance Industry (14/2024)
News in the spotlight: EY launches Global Sustainable Finance Innovation Hub
EY has launched a Global Sustainable Finance Innovation Hub in Dublin, aimed at aiding financial institutions globally in advancing their Environmental, Social, and Governance (ESG) regulatory and reporting endeavors.
Products and Services
Bloomberg introduces Government Climate Tilted Bond Indices
Bloomberg has introduced the Bloomberg Government Climate Tilted Bond Indices, a novel benchmark family designed for government bond investors aiming to facilitate the transition toward a low-carbon economy. These indices incorporate Bloomberg Government Climate Scores, allowing customization options for both new government bond and broad-based climate indices. By emphasizing climate-conscious investments, these indices encourage the adoption of sustainable practices in the financial sector.
Euronext Corporate Services launches new Governance solutions
Euronext Corporate Services announced the launch of AGM Voting Insight, a service offering strategic shareholder intelligence and voting analytics to empower companies for informed decision-making before Annual General Meetings. This service, alongside a new version of IR.Manager that incorporates ESG data distribution, aims to enhance shareholder engagement and support listed companies in their ESG strategy. AGM Voting Insight allows companies to gain early insights into voting intentions, enhancing engagement and aligning strategies with shareholder trends. The inclusion of ESG data in IR.Manager is intended to better equip investor relations professionals with the necessary tools for aligning their strategies with sustainable finance principles.
Morgan Stanley Capital Partners acquires Resource Innovations
Morgan Stanley Capital Partners (MSCP) recently acquired Resource Innovations (RI), a tech-enabled services company focused on energy efficiency and sustainability. The acquisition was announced on April 2, 2024. Under the terms of the agreement, MSCP obtained a controlling interest in RI from BV Investment Partners and other shareholders. Founder Lauren Casentini will continue as the Chief Executive Officer of RI and retain a significant equity stake. Resource Innovations provides advisory services, program management services, and software solutions to utility, government, and corporate clients. Their expertise lies in areas such as energy efficiency, decarbonization, electric vehicle charging, distributed solar, and demand response. The company collaborates with utilities to implement both traditional energy efficiency programs (e.g., lighting, weatherization, and controls) and emerging growth areas.
BMO publishes updated Sustainable Bond Framework
BMO has updated its Sustainable Bond Framework to include innovative categories for green, social, and transition financing, incorporating activities related to nuclear energy and climate change adaptation. This revised framework governs the issuance of BMO’s Green, Social, Transition, and Sustainability Bonds. It expands the criteria for social proceeds to include initiatives like the BMO EMpower for inclusive economic growth and has received a ‘very good’ sustainability quality score from Moody’s. This approach aims to align financing with sustainable development and the transition towards a low-carbon economy. For further details, you can read the full article on BMO’s website.
EY launches Global Sustainable Finance Innovation Hub
EY has launched a Global Sustainable Finance Innovation Hub in Dublin, aimed at aiding financial institutions globally in advancing their Environmental, Social, and Governance (ESG) regulatory and reporting endeavors. This expansion involves tripling the size of EY Ireland’s sustainable finance team and adding 40 specialist hires. The hub will focus on ESG reporting, particularly in biodiversity, EU regulation, and international goals, addressing the financial sector’s role in transitioning towards sustainability. It will provide comprehensive services to help clients navigate the increasing regulatory requirements and support their journeys towards Net Zero and sustainable finance.
Regulations, Law & Frameworks
Integrity Council for the Voluntary Carbon Market (ICVCM) approved three carbon standard organizations
The Integrity Council for the Voluntary Carbon Market (ICVCM) has approved the first “high-integrity” carbon credit certifiers, including Gold Standard, ACR, and Climate Action Reserve. These organizations, responsible for verifying over a quarter of carbon credits in the global voluntary market, aim to enhance market confidence with a new label for quality projects. This initiative seeks to mobilize private capital for emission reduction projects, especially in the Global South, addressing concerns over fraud and mismanagement in the carbon market.
ESMA consults on possible amendments to the Credit Rating Agencies Regulatory Framework
The European Securities and Markets Authority (ESMA) launched a consultation on proposed amendments to the regulatory framework for Credit Rating Agencies (CRAs) to better incorporate Environmental, Social, and Governance (ESG) factors into their credit rating methodologies. The amendments aim to ensure systematic documentation of ESG factors’ relevance, enhance disclosures on ESG factors in credit ratings, and deliver a more robust, transparent credit rating process through consistent application of methodologies. ESMA will consider feedback and submit Technical Advice to the European Commission by December 2024.
Net Zero Commitments
MUFG increases sustainable finance targets to $660bn
Mitsubishi UFJ Financial Group (MUFG), based in Tokyo, significantly increased its 2030 sustainable finance target to 100 trillion yen ($660 billion) from a previous goal of 35 trillion yen, driven by robust demand and a commitment to sustainability. The announcement was part of MUFG’s Medium-term Business Plan, which emphasizes social and environmental progress as a core pillar. MUFG also introduced a new Sustainability Risk Office to oversee sustainability risks like climate change. This move marks the bank’s second revision of its sustainable finance target, initially set in 2019 at 20 trillion yen, and reflects MUFG’s ongoing efforts to integrate sustainability into its business strategies.