ESG News

ESG News 09/2024 (26.02. – 03.03.)

Weekly ESG News: Financial Services and Insurance Industry (09/2024)

News in the spotlight: BBVA launches a unit to finance cleantech innovation

BBVA has launched a global finance unit to support cleantech innovation, expanding its sustainable business initiatives. Carlos Torres Vila, BBVA Chair, highlighted the importance of emerging clean technologies in decarbonizing the economy during the 3rd BBVA Sustainability Forum in Madrid.

Products and Services

NN Group joins animal welfare network

NN Group, a Dutch financial services company, has joined the BBFAW Global Investor Collaboration on Farm Animal Welfare, comprising 32 institutional investors representing £1.9 trillion in assets. The collaboration, supported by BBFAW, aims to enhance animal welfare management practices among 150 global companies. NN Group emphasizes the financial implications of disregarding animal welfare, highlighting risks such as overcrowding, diseases, and mortality. The collaboration seeks to improve global farm animal welfare standards, and NN Group’s participation expands its geographic reach. The BBFAW program, founded in 2012, assesses companies’ practices and performance on farm animal welfare, driving higher standards through annual benchmarks and extensive engagement programs.

Deutsche Bank updates Sustainable Finance framework

Deutsche Bank has released an updated Sustainable Finance Framework, the second edition since its initial launch in July 2020. The framework outlines criteria for classifying transactions and financial products as “sustainable,” with a focus on environmental and social factors. The bank aims to achieve €500 billion in sustainable financing and investments by 2025, having already reached €279 billion by the end of 2023. Key updates include enhanced eligibility criteria aligned with the EU Taxonomy and increased transparency. The framework received a positive second-party opinion from ISS ESG, confirming alignment with market practices and the bank’s sustainability criteria. Jörg Eigendorf, Chief Sustainability Officer, emphasized the guidelines as the foundation for achieving ambitious sustainability targets.

BBVA launches a unit to finance cleantech innovation

BBVA has launched a global finance unit to support cleantech innovation, expanding its sustainable business initiatives. Carlos Torres Vila, BBVA Chair, highlighted the importance of emerging clean technologies in decarbonizing the economy during the 3rd BBVA Sustainability Forum in Madrid. The specialized unit, with teams in New York, London, and Madrid, will provide lending and advisory services to promote the development of affordable clean technologies. BBVA CEO Onur Genç emphasized the critical role banks play in financing the transition to a low-carbon economy, supporting reforms and incentives for clean technology development. The event showcased sustainability projects and discussions on global challenges and business perspectives in the sustainability sector.

Regulations, Law & Frameworks

EU Corporate Sustainability Due Diligence Law not approved

The European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), aimed at establishing a sustainability standard for businesses operating in the EU, faced a setback as the February 28 vote failed to garner enough support in the European Council. The directive, addressing environmental and human rights concerns, imposes due diligence requirements on companies, their subsidiaries, and supply chains. Germany’s decision to abstain influenced other member states, leading to the vote’s failure. France’s last-minute move to weaken the CSDDD by reducing its impact on businesses has caused discontent among supporters. With a March 15 deadline for European Parliament approval approaching, the fate of the CSDDD remains uncertain.

Singapore introduces mandatory climate disclosures starting from 2025

Starting from the financial year 2025, all listed companies in Singapore are mandated to make climate-related disclosures, while large non-listed firms are required to do so from FY2027. The disclosures will adhere to local standards aligned with the International Sustainability Standards Board. External verification for scope 1 and scope 2 emissions is required two years after the reporting starts. The disclosure of scope 3 emissions will be phased in, beginning with listed firms in FY2026 and large non-listed ones by FY2029. In 2027, the government will review whether to extend these requirements to smaller non-listed companies. Firms already using international standards have a three-year transitional period. Additionally, a simplified government tender category called Tender Lite will be introduced to facilitate SME access to contracts.

India issues draft for climate disclosure framework

The Reserve Bank of India (RBI) has released a draft disclosure framework on climate-related financial risks for regulated entities (REs), emphasizing the need for consistent and comparable disclosures. Scheduled commercial banks, financial institutions, and larger non-banking financial companies (NBFCs) are required to disclose governance, strategy, and risk management processes from fiscal 2026, with specified metrics and targets from fiscal 2028. The disclosure should detail the impact of climate-related risks and opportunities on businesses, strategy, and financial planning, integrating these considerations into overall risk management. The RBI aims to foster early assessment of climate-related financial risks and opportunities and facilitate market discipline through these disclosures. Comments on the draft framework are invited until April 30, 2024.

ESG Data & Analytics

S&P Dow Jones launches biodiversity-focused benchmarks

S&P Dow Jones Indices has unveiled the S&P Biodiversity Indices, comprising the S&P 500 Biodiversity Index and S&P Global LargeMidCap Biodiversity Index. These benchmarks gauge the performance of select equity securities from the S&P 500 and S&P Global LargeMidCap indices, with constituents chosen and weighted based on environmental and biodiversity criteria. Utilizing S&P Global Sustainable1’s Nature & Biodiversity Risk dataset, the indices aim to provide insights into investments’ ecological impact. The S&P Biodiversity Indices integrate biodiversity, UN Sustainable Development Goals, and carbon datasets to align with UN’s Biodiversity Conference targets, emphasizing a reduction in ecosystem impact intensity and carbon footprint.

ESG- and Green Bonds

Verizon completed final allocation of its $1bn green bond

Verizon allocated $994.1 million from its fifth green bond to Renewable Energy Purchase Agreements (REPAs) in five states, contributing to its $5 billion green bond initiative. This supports Verizon’s goal of achieving net-zero emissions by 2035. The REPAs cover nearly 0.9 GW of renewable energy capacity, with 53% from solar and 47% from wind. Verizon has entered into a total of 27 REPAs, surpassing its 2025 target to source 50% of electricity from renewables. The company aims for 100% renewable energy by 2030 as part of its responsible business plan, Citizen Verizon.

Download our Weekly ESG Newsletter 09/2024 (26.02. – 03.03.) including updates from BBVA, Deutsche Bank, NN Group and many more here or explore all of our Weekly News.