Weekly ESG News: Financial Services and Insurance Industry (32/2024)
News in the spotlight: EU Commission Releases CSRD FAQ to Aid Companies with New Reporting Requirements
The European Commission released a new FAQ to assist companies and auditors with the expanded Corporate Sustainability Reporting Directive (CSRD), which begins in 2024, aiming to clarify rules, reduce burdens, and enhance sustainability report usability.
Products & Services
JERA Nex, the renewable energy subsidiary of Japan’s largest power generation company, JERA, has made its first U.S. acquisition by purchasing two solar projects from Lightsource bp. The deal includes the 300MW Oxbow solar farm in Louisiana, the largest in the state, and the 95MW Happy solar farm in Arkansas, which has a long-term power purchase agreement with Conway Corp. This acquisition supports JERA Nex’s ambitious goal of developing 20GW of renewable capacity by 2035. Lightsource bp will continue to provide asset management and operations and maintenance services, ensuring the projects’ ongoing success. JERA Nex aims to expand its onshore renewables portfolio in the U.S. and globally.
Woodside Energy has acquired a Texas-based low carbon ammonia plant from OCI Global for $2.35 billion, targeting growing global demand for cleaner energy. The plant, located in Beaumont, Texas, is expected to start production in 2025, with a focus on lower carbon ammonia by 2026. This project supports Woodside’s goal to invest $5 billion in new energy products and achieve significant CO2 emissions reductions by 2030. The acquisition positions Woodside to capitalize on increasing demand for low carbon ammonia, especially in Europe and Asia, driven by clean energy policies. OCI will continue managing the plant’s construction until it becomes fully operational.
Regulations & Law
UK to Regulate ESG Ratings Providers in 2025
The UK government plans to introduce legislation in 2025 to regulate ESG ratings providers, placing them under the supervision of the Financial Conduct Authority (FCA). This move aims to enhance transparency in ESG ratings, responding to growing demand for clearer oversight as investors increasingly incorporate ESG factors into decision-making. The initiative aligns with recommendations from the International Organization of Securities Commissions (IOSCO) and follows similar regulatory efforts in the EU. The regulation seeks to boost growth, support a cleaner economy, and ensure fair treatment of companies in critical sectors like defense. Sustainable finance groups have welcomed the proposal, emphasizing the need for greater clarity in ESG ratings methodologies.
EU Commission Releases CSRD FAQ to Aid Companies with New Reporting Requirements
The European Commission has published a new FAQ to assist companies and auditors with the EU’s Corporate Sustainability Reporting Directive (CSRD), which begins reporting for the 2024 financial year. The CSRD, an update to the Non-Financial Reporting Directive (NFRD), expands reporting requirements to over 50,000 companies, up from 12,000. The FAQ aims to clarify the rules, reduce administrative burdens, and improve the usability and comparability of sustainability reports. It addresses key issues such as compliance timelines, reporting standards, and auditing requirements. Mairead McGuinness highlighted the Commission’s focus on making sustainability reporting tools more effective and reducing company burdens.
Leadership Announcements
PwC US has appointed Ellen Walsh as Executive Sponsor of its Sustainability Practice, tasking her with leading the firm’s sustainability-related growth initiatives and delivering investor-grade reporting for clients. Walsh, who has been with PwC for over 31 years, previously served as Deputy Leader of Transformation Consulting Solutions and led the firm’s Insurance sector practice. The announcement coincides with the appointment of Dan Priest as PwC US’ first Chief AI Officer, highlighting the firm’s commitment to expanding its capabilities in both AI and sustainability. Walsh emphasized the growing urgency of sustainability strategies across industries, noting their potential to drive growth, improve efficiency, mitigate risk, and enhance enterprise trust. PwC’s increased focus on these areas reflects its dedication to supporting clients in navigating these critical opportunities.
GIB Asset Management Names Victoria Barron as New Chief Sustainability Officer
GIB Asset Management (GIB AM) has announced Victoria Barron as its new Chief Sustainability Officer. Barron will lead the firm’s sustainability strategy and governance, focusing on enhancing corporate sustainability and advancing sustainability initiatives, particularly in the UK and the Middle East. Katherine Garrett-Cox, CEO of GIB AM, expressed excitement about Barron’s appointment, emphasizing the firm’s commitment to investing in sustainable businesses. Barron joins from Brightwell, where she was Head of Sustainable Investment, and has extensive experience in ESG investing. She also co-chairs the ASCOR Project, which aids investors in evaluating climate policies and emissions pathways. Barron looks forward to leveraging her expertise to drive GIB AM’s sustainability agenda.
ESG & Green Bond Issuances
M&G Invests
$100 Million in responsAbility’s Asia Climate Fund to Drive CO2 Reduction
M&G plc’s impact investing unit, responsAbility Investments, has secured over $200 million for its Asia climate investment strategy at its second closing, with $100 million coming from M&G’s Life business. Launched in November 2023, this strategy targets CO2 reduction in Asia by investing in low-emission technologies and climate-friendly infrastructure. The fund’s initial close included contributions from Germany’s KfW and the Dutch FMO. responsAbility’s approach uses blended finance to combine public and private capital, aiming to mobilize significant investments for high-risk climate projects. The strategy focuses on renewable energy, battery storage, electric mobility, energy efficiency, and the circular economy, with a goal to raise $500 million and achieve 16 million tons of CO2 savings over the investment’s lifetime. Stephanie Bilo of responsAbility emphasized the crucial role of private sector investment in bridging the funding gap for the energy transition.
Net Zero Commitments
The LYCRA Company Sets Ambitious 2030 Emissions Reduction Targets
The LYCRA Company has announced that its greenhouse gas (GHG) emissions reduction targets have been approved by the Science Based Targets initiative (SBTi) as aligning with a 1.5°C climate trajectory. The company aims to reduce its absolute Scope 1 and 2 emissions by 50% and Scope 3 emissions from purchased goods and services by 25% by 2030, compared to 2021 levels. This move is notable as many textile companies have abandoned Scope 3 targets due to their complexity. LYCRA is transitioning to lower-impact energy sources and renewable electricity at its production sites, and plans to convert nearly 30% of its spandex capacity to bio-derived LYCRA fiber. CEO Gary Smith emphasized that these goals are crucial for both business success and environmental responsibility.