Weekly ESG News: Financial Services and Insurance Industry
News in the spotlight: Bloomberg expands Sustainable Index Offering
Bloomberg has introduced new green-tilted fixed income indices, designed to increase the weight of green bonds in flagship indices like the Global Aggregate, Treasury, and Corporate Indices. These indices, incorporating research from Bloomberg’s ESG and fixed income data teams, allow investors to enhance exposure to sustainable products while maintaining characteristics of the parent benchmark. The Bloomberg Global Aggregate 20% Green Bond Index has shown a 0.75% higher year-to-date return than the Bloomberg Global Aggregate Index. With over 70 benchmarks in its suite, including customized options, Bloomberg aims to provide diverse choices for investors seeking green bond exposure within fixed income portfolios.
Weekly Sustainable Finance Newsletter 49/2023
ESG News of the last week in detail
Products and Services
Columbia Threadneedle launches Lux Global Social Bond fund
Columbia Threadneedle Investments has launched the CT (Lux) Global Social Bond fund, expanding its social impact range and offering European investors access to the fund. The Article 9 classified fund, under the EU’s SFDR, is managed by a dedicated team led by Tammie Tang and aims to utilize the extensive bond market to achieve positive social outcomes. The fund leverages Columbia Threadneedle’s proprietary rating methodology, identifying bonds with social impact across seven key fields and aligning with the UN Sustainable Development Goals. A Social Advisory Panel, including representatives from ‘The Good Economy’ and ‘Steward Redqueen,’ will assess and report on the fund’s social impact, ensuring a balance of financial returns and targeted social outcomes.
Amundi launches Asia Income ESG Bond Fund
Amundi has introduced the Amundi Funds – Asia Income ESG Bond targeting high income generation with optimized risk return in Asian fixed income markets. Managed by Joevin Teo, the fund focuses on credit and local rates, utilizing a robust ESG framework to manage extra-financial risks. The Emerging Markets team believes in the growth potential of Asia and aims to tap into the region’s dynamic and maturing market. The fund will actively invest in a diverse universe, including green, social, and sustainability (GSS+) bonds. The offering is available in various countries, including Austria, France, and Singapore.
Mirova launches EUR350mn sustainable land management strategy
Mirova, a leader in natural capital investment, has successfully deployed the Land Degradation Neutrality (LDN) fund, finalizing investments in Koa, Pamoja, and Terrasos, totaling $24.3 million. Co-promoted with the UN Convention to Combat Desertification, the LDN Fund supports 13 sustainable land management projects globally. Building on this success, Mirova announces the launch of Mirova Sustainable Land Fund 2 (MSLF2), focusing on sustainable forestry, agroforestry, and regenerative agriculture. MSLF2, structured as a blended finance vehicle, aims to attract public and private capital to address climate change adaptation, biodiversity preservation, and social inclusion, aligning with global efforts for nature restoration.
First Abu Dhabi Bank (FAB) commits to provide $135bn in green finance by 2030
First Abu Dhabi Bank (FAB) has committed to providing over $135 billion in sustainable and transition financing by 2030, representing an 80% increase from its 2021 pledge. This marks the largest sustainable finance commitment in the MENA region, contributing more than half of the $270 billion total pledged by UAE banks. FAB’s expanded targets include transition financing and support for early-stage climate solutions. The bank, a leader in sustainable finance, has achieved milestones such as committing to net-zero emissions by 2050 and being the first MENA bank to issue a green bond in 2017.
Bloomberg expands Sustainable Index Offering
Bloomberg has introduced new green-tilted fixed income indices, designed to increase the weight of green bonds in flagship indices like the Global Aggregate, Treasury, and Corporate Indices. These indices, incorporating research from Bloomberg’s ESG and fixed income data teams, allow investors to enhance exposure to sustainable products while maintaining characteristics of the parent benchmark. The Bloomberg Global Aggregate 20% Green Bond Index has shown a 0.75% higher year-to-date return than the Bloomberg Global Aggregate Index. With over 70 benchmarks in its suite, including customized options, Bloomberg aims to provide diverse choices for investors seeking green bond exposure within fixed income portfolios.
Regulatory and Law
MAS launches multi-sector transition strategy
The Monetary Authority of Singapore (MAS) launched the pioneering Singapore-Asia Taxonomy for Sustainable Finance. It is the first global taxonomy to include a “transition” category. Furthermore, it addresses the challenges in Asia’s net-zero transition. The taxonomy uses a traffic light system and a measures-based approach to define transition activities, especially for hard-to-abate sectors like maritime. It provides a framework for the early phase-out of coal-fired power plants, ensures interoperability with global taxonomies, and facilitates cross-border financing. MAS Managing Director Ravi Menon highlighted its credibility and industry-led nature, with periodic reviews to align with emerging science and technology. The taxonomy resulted from extensive public consultations and will guide capital allocation in the region.
MAS publishes Code of Conduct for ESG data and rating providers
MAS has recently issued a finalized Code of Conduct (CoC) for Environmental, Social, and Governance (ESG) Rating and Data Product Providers, along with a self-attestation Checklist for compliance. The CoC establishes industry standards for transparency in methodologies, data sources, and conflict management, aligning with IOSCO recommendations. Providers are encouraged to disclose their adoption of the CoC within 12 months. MAS, in collaboration with the International Capital Market Association (ICMA), will host a list of compliant providers on the ICMA’s website. The CoC aims to enhance market confidence in ESG products, improve comparability, and facilitate informed investor decision-making in funding the climate transition.