Weekly ESG News: Financial Services and Insurance Industry
News in the spotlight: Neuberger Berman received a £2bn multi-asset credit mandate for management from Railpen
Railpen, a major UK pension fund managing £34bn for the railway industry, has granted a £2bn mandate to Neuberger Berman. This strategic partnership aims to implement a liquid multi-asset credit strategy across various credit sectors. Generally, sectors will include investment grade and non-investment grade assets, within Railpen’s Growth Fund. The objective is to achieve attractive risk-adjusted returns while adhering to ESG principles. Neuberger Berman’s experienced credit investment team will leverage their expertise and research.
Weekly Sustainable Finance Newsletter 31/2023
ESG News of the last week in detail
Products and Service
UBS Asset Management and Aon launch emerging climate transition fund
UBS Asset Management and Aon have jointly launched the UBS Global Emerging Markets Equity Climate Transition Fund. The fund aims to assist companies in developing economies with their transition to a low-carbon economy and address social issues. Furthermore, the fund applies positive and negative ’tilts’ to emerging market companies based on their climate-related efforts. As a consequence, the product targets an alignment with the UN’s sustainable development goals. UBS and Aon will engage with invested companies to promote sustainability reporting and climate awareness.
Ceres introduces new framework for water stewardship
A new cost-benefit analysis framework developed by Ceres and Bluerisk allows companies to assess the complete value of water stewardship interventions throughout their value chain. By estimating the costs and potential benefits of water management strategies, the framework emphasizes the value of water to businesses and society. The analysis reveals that many companies underestimate the true value of water stewardship, missing out on opportunities like increased efficiency, competitive advantages, and resilient supply chains. The framework’s application to a multinational apparel company demonstrates that cost-sharing approaches and interventions upstream of the company’s operations yield the greatest benefits. This tool empowers investors to engage with high-water footprint companies, considering water as a financial risk and addressing broader water impacts for both business returns and societal impact.
Neuberger Berman received a £2bn multi-asset credit mandate for management from Railpen
Railpen, a major UK pension fund managing £34bn for the railway industry, has granted a £2bn mandate to Neuberger Berman. This strategic partnership aims to implement a liquid multi-asset credit strategy across various credit sectors. Generally, sectors will include investment grade and non-investment grade assets, within Railpen’s Growth Fund. The objective is to achieve attractive risk-adjusted returns while adhering to ESG principles. Neuberger Berman’s experienced credit investment team will leverage their expertise and research.
ESG Data and Analytics
Bloomberg´s SFDR data solution implemented by Sumitomo Mitsui Trust Asset Management
Sumitomo Mitsui Trust Asset Management has chosen Bloomberg’s SFDR data solution to comply with the Sustainable Finance Disclosure Regulation (SFDR) requirements. The solution provides PAI indicators and ESG data for over 15,000 global companies. It helps the company to enhance its ESG investments and transparency. Bloomberg’s expertise in ESG regulations and quick adaptation to regulatory changes were deciding factors. The adoption of Bloomberg’s SFDR solution will aid Sumitomo Mitsui Trust Asset Management in meeting the evolving regulatory landscape effectively.
Leadership Announcements
Fidelity International appoints Jenn-Hui Tan as chief sustainability officer
Fidelity International has appointed Jenn-Hui Tan as its new Chief Sustainability Officer, a newly-created role for the company. Tan will oversee the firm’s sustainability approach, including managing the sustainable investing and corporate sustainability teams. His responsibilities include ensuring a consistent sustainability strategy across all aspects of Fidelity’s operations. He joined Fidelity in 2007 and became the Global Head of Stewardship and Sustainable Investing in 2019.
MSCI appoints Hiromichi Mizuno as Special Advisor to the CEO for sustainable investment related topics
Hiromichi (Hiro) Mizuno has been appointed as a Special Advisor to the CEO of MSCI Inc. As a pioneer in sustainable investment, he brings his experience in addressing climate change and gender diversity through investment practices. His involvement will enhance MSCI’s expertise in providing data-driven insights for clients on investment risks, especially related to climate and sustainability issues. Mizuno’s role will include offering strategic counsel and thought leadership to solidify MSCI’s commitment to empowering investors with innovative solutions.
Regulatory and Law
UK releases information about the new Sustainability Disclosure Standards
The UK government is working on creating UK Sustainability Disclosure Standards (UK SDS) based on the global IFRS Sustainability Disclosure Standards. These standards will require companies to disclose sustainability-related risks and opportunities, including those linked to climate change. The UK aims for global comparability and usefulness for investors by aligning with the IFRS baseline. Committees have been established to assess and endorse the IFRS standards and coordinate implementation in the UK. This includes the UK Sustainability Disclosure Technical Advisory Committee (TAC) and the UK Sustainability Disclosure Policy and Implementation Committee (PIC).
SBTi updates Commitment Compliance Policy
The Science Based Targets initiative (SBTi) grace period for setting targets ended on July 31, 2023. Companies and financial institutions now have 24 months from commitment to submit science-based targets. The new policy marks non-compliant commitments as “Commitment Removed” on the Dashboard. The SBTi emphasizes the need for urgent corporate climate action and encourages companies to re-engage and set ambitious, robust targets for validation. Financial institutions have an extension until April 2024 for the Financial Net-Zero Standard publication.
Japanese Financial Services Agency (FSA) starts consultation on new impact investment framework
The Japanese Financial Services Agency (FSA) is working to establish global impact investing guidelines. Continously, this is a priority for the Japanese government to support sustainability and decarbonization. While impact investing has traditionally focused on private markets, interest in listed equities is growing. The FSA’s framework includes four key principles: intentionality, additionality, measurement and management of impact investing, and prioritization of investment in innovation. They also plan to create an international “Consortium” to collaborate on impact investing data and best practices. The deadline for feedback on the FSA’s impact framework is October 10th.
IAASB launches public consultation on Global Sustainability Assurance Standard
The International Auditing and Assurance Standards Board (IAASB) has released a proposed International Standard on Sustainability Assurance (ISSA) 5000, aimed at enhancing confidence in sustainability reporting globally. The standard will be applicable to both limited and reasonable assurance engagements on sustainability information across various topics and reporting frameworks. The IAASB plans an extensive outreach program, including roundtables and virtual events, to gather input from stakeholders and ensure a high-quality final standard. The proposed ISSA 5000 is considered a landmark in sustainability assurance and will be accessible to both professional accountants and non-accountant assurance practitioners.