Weekly ESG News: Financial Services and Insurance Industry
News in the spotlight: Nuveen and Nuveen Green Capital to launch a new sustainable commercial real estate fund
Nuveen and Nuveen Green Capital (NGC) have collaborated to launch the Nuveen CPACE Lending Fund. The fund enables insurers to invest $525 million in a diversified portfolio of energy-efficient and climate-resilient projects in commercial real estate. Six major insurers have already joined as initial investors, reflecting growing interest in clean energy investments. The fund offers attractive, stable returns while addressing climate concerns, benefiting from NGC’s C-PACE loans expertise. It aims to enhance energy efficiency, lower operational costs, create local jobs, and align with the rising trend of impact investing.
Weekly Sustainable Finance Newsletter 32/2023
ESG News of the last week in detail
Products and Service
Blackstone closes fund raising for Energy Transition Private Credit Fund
Blackstone has successfully closed its energy transition credit fund, BGREEN III, at a record-breaking $7.1 billion. Managed by Blackstone Credit’s Sustainable Resources Platform, the fund focuses on providing private credit for renewable energy, infrastructure, and energy transition projects. The company aims to invest an estimated $100 billion in climate change solutions over the next decade. With $295 billion in assets under management, Blackstone Credit is a major player in the corporate credit market, supporting businesses worldwide.
BlackRock to launch a NZ$2bn Climate Infrastructure Fund in New Zealand
New Zealand and BlackRock are collaborating on a NZ$2 billion ($1.22 billion) climate infrastructure fund aimed at boosting renewable energy. The initiative will focus on solar, wind, green hydrogen, and battery storage technologies. BlackRock’s CEO Larry Fink stated that this marks their most significant single-country low-carbon investment initiative. New Zealand’s government anticipates accelerated emissions reduction and increased capital accessibility for local businesses.
Goldman Sachs Asset Management invests in energy transition platform Synthica Energy
Synthica Energy has secured an equity investment from Goldman Sachs Asset Management’s Infrastructure Business to boost its anaerobic digestion projects converting organic waste into renewable natural gas (RNG). The partnership will support expansion across key markets in the US, including Ohio, Texas, and Georgia, with plans for facilities in Florida, Illinois, Missouri, New York, and Pennsylvania. The company’s focus on pre-consumer organic waste provides a stable supply for RNG production. The investment aligns with the increasing demand for RNG and sustainable waste management solutions, contributing to emissions reduction in line with green energy goals.
AXA IM Alts acquires a 25% stake in Finerge
AXA IM Alts, a major player in alternative investments with assets exceeding €185 billion, has acquired a 25% stake in the Iberian renewable platform, Finerge, from Igneo Infrastructure Partners. This transaction, anticipated to be finalized by the end of 2023, bolsters AXA IM Alts’ involvement in the renewable energy sector. Finerge, boasting nearly 2GW operational capacity from 14 Iberian transactions, is poised for further expansion with AXA IM Alts’ backing. This strategic move aligns with AXA IM Alts’ dedication to infrastructure’s pivotal role in achieving a net-zero economy and addressing climate risks. This development follows AXA IM Alts’ 2022 investment in the Hornsea 2 offshore wind farm in the UK, elevating their overall operating capacity to around 3.3 GW and their management of infrastructure equity assets to over €4 billion.
GEF Capital Partners announces close of GEF LatAm Climate Solutions Fund III
GEF Capital Partners has announced the successful final close of the ‘GEF LatAm Climate Solutions Fund III,’ securing R$1.05 billion in committed capital. The fund aims to drive impactful transformations within Brazil’s middle-market sector, focusing on climate change and pollution control solutions. Anibal Wadih, Managing Partner at GEF Capital Partners, highlighted Brazil’s potential for innovative climate solutions and collaboration with pioneering companies. The fund will make private equity investments in companies addressing climate change issues while leading sustainable initiatives in Brazil. This initiative reinforces GEF’s commitment to responsible investment and positions them to foster growth in Brazil’s climate change solutions.
Nuveen and Nuveen Green Capital to launch a new sustainable commercial real estate fund
Nuveen and Nuveen Green Capital (NGC) have collaborated to launch the Nuveen CPACE Lending Fund. The fund enables insurers to invest $525 million in a diversified portfolio of energy-efficient and climate-resilient projects in commercial real estate. Six major insurers have already joined as initial investors, reflecting growing interest in clean energy investments. The fund offers attractive, stable returns while addressing climate concerns, benefiting from NGC’s C-PACE loans expertise. It aims to enhance energy efficiency, lower operational costs, create local jobs, and align with the rising trend of impact investing.
ESG Data and Analytics
S&P Global will stop using ESG Scores for Credit Ratings
S&P Global has reversed its stance on using alphanumeric ESG scores for credit ratings due to growing criticism of ESG investing. The agency announced that it will discontinue the use of one-to-five scale ESG credit “indicators” and will no longer update existing ones. Instead, S&P will rely on explanatory paragraphs within its credit rating reports to effectively communicate the impact of ESG factors on credit analysis. These alphanumeric indicators, introduced in 2021, were not meant to be sustainability ratings but rather aimed to highlight the significance of ESG credit considerations in their rating assessments. The agency maintains its commitment to transparency regarding the influence of environmental, social, and governance factors on creditworthiness assessments.
Leadership Announcements
Barclays appoints James Edmonds as Global Head of Sustainable Finance Project
Barclays has appointed James Edmonds as the Global Head of Sustainable Project Finance in its Corporate and Investment Bank. Based in New York, he will collaborate with various teams to provide project financing solutions that aid clients in their global transition to net-zero operations and revenue opportunities. With a background at HSBC as Head of Real Assets Finance for the Americas, James brings expertise to enhance Barclays’ capabilities in sustainable finance. This appointment aligns with Barclays’ goal to facilitate $1 trillion of sustainable and transition finance by 2030, supporting clients in adopting low-carbon business models and advancing climate technologies.
Regulatory and Law
FRC consults on revisions to Ethical Standard for auditors
The Financial Reporting Council (FRC) has launched a consultation to improve and clarify auditors’ adherence to integrity, objectivity, and independence principles in the Ethical Standard. This move aligns with FRC’s commitment to audit market reform and potential withdrawal of the Other Entities of Public Interest (OEPI) category. The proposed changes strengthen restrictions on economic reliance from connected entities, incorporate lessons from audit inspections, and align with international standards. The updated standard also aims for more timely reporting of breaches to the FRC. Mark Babington, FRC’s Executive Director of Regulatory Standards, emphasizes the importance of ethical behavior for maintaining high-quality audits.