Weekly ESG News: Financial Services and Insurance Industry (17/2024)
News in the spotlight: Decarbonization Partners closes decarbonization-focused fund with S$1.9bn
At the close of its first fund dedicated to investing in decarbonization technologies, investment platform Decarbonization Partners—co-founded by global asset manager BlackRock and Singapore’s Temasek Investment Company—raised US$1.4 billion (S$1.9 billion), exceeding its initial goal of US$1 billion.
Regulations, Law and Frameworks
Nature Action 100 unveils benchmark indicators for assessing corporate ambition and action on nature
The Company Benchmark, introduced by Nature Action 100, is designed to evaluate how well companies are addressing issues related to nature and biodiversity. It consists of a structured set of criteria that cover six key areas: Ambition, Assessment, Targets, Implementation, Governance, and Engagement, each broken down further into sub-indicators and metrics. This initiative aims to guide and support investors in making informed decisions by providing a clear framework for understanding corporate contributions towards reversing biodiversity loss by 2030. The benchmark was developed collaboratively with inputs from global investors and is aligned with existing nature-related financial disclosure frameworks.
FCA confirms anti-greenwashing guidance and proposes extending sustainability framework
The UK’s Financial Conduct Authority (FCA) has established a comprehensive sustainability disclosure framework to combat greenwashing, featuring an anti-greenwashing rule and four distinct sustainability labels: “Sustainability Impact,” “Sustainability Focus,” “Sustainability Improvers,” and “Sustainability Mixed Goals.” These initiatives aim to ensure that financial products’ sustainability claims are substantiated, clear, and non-misleading, with the framework set to be phased in starting in 2024. This regulation is part of a broader effort to enhance transparency and accountability in sustainable finance, reflecting a global trend towards stricter environmental and social governance in the financial sector.
ISSB to start research projects about risks and opportunities related to nature and human capital
The International Sustainability Standards Board (ISSB) is launching research projects to explore disclosure requirements regarding risks and opportunities related to nature and human capital. This initiative, guided by prior consultations, aims to build upon existing frameworks like the SASB Standards and the CDSB guidance. The research will focus on how these risks and opportunities could potentially affect a company’s future prospects, with the ultimate goal of enhancing the global baseline of sustainability-related financial disclosures.
EU Parliament approves landmark Human Rights and Environmental Due Diligence Law
The EU Parliament has passed a groundbreaking due diligence directive, requiring firms to mitigate their negative impact on human rights and the environment. Applicable to EU and non-EU companies with significant turnovers, the law mandates the creation of transition plans aligning with the Paris Agreement. Companies failing to comply can face fines up to 5% of their net worldwide turnover and are liable for damages caused by breaching their obligations. This marks a significant step towards responsible business conduct and sustainability, according to lead MEP Lara Wolters.
Products & Services
Decarbonization Partners closes decarbonization-focused fund with S$1.9bn
At the close of its first fund dedicated to investing in decarbonization technologies, investment platform Decarbonization Partners—co-founded by global asset manager BlackRock and Singapore’s Temasek Investment Company—raised US$1.4 billion (S$1.9 billion), exceeding its initial goal of US$1 billion. According to a news release issued by the joint venture on April 25, over 30 institutional investors from 18 countries participated in the late-stage venture capital and early-growth private equity fund.
ESG Data & Analytics
IEA launches Online Tool to track COP28 Energy Goals progress
The International Energy Agency (IEA) has launched a new online tool in collaboration with UN Climate Change to monitor progress towards energy goals set at COP28. This initiative aims to support governments in achieving objectives such as tripling renewable energy capacity and doubling energy efficiency improvements by 2030. By providing up-to-date data and analysis, the IEA seeks to assist decision-makers in translating pledges into action for a secure and inclusive transition to clean energy. Additionally, the IEA will assist countries in developing their next Nationally Determined Contributions (NDCs) under the Paris Agreement and facilitate dialogues for exchanging ideas and best practices ahead of COP29.
Google teams up with startups for AI-powered sustainability solutions
Google’s Startups for Sustainable Development program is collaborating with over 500 startups focused on the UN’s Sustainable Development Goals, offering access to AI-driven tools and technologies like Google Cloud and Earth Engine. Through this initiative, Google pairs its experts with startups to integrate AI solutions into their projects, such as SurplusMap’s predictive model for electric vehicle charger utilization and Stream Ocean’s marine life monitoring system enhanced with AI-powered data analytics. Additionally, FAUME worked with Google Cloud to develop an AI model for fashion brands to determine trade-in values, promoting sustainability in shopping.