Weekly ESG News: Financial Services and Insurance Industry
Euronext expands its 1.5°C index offering
Two new SBT indices were introduced by Euronext: Euronext Europe SBT 1.5° and Euronext Eurozone SBT 1.5°, which are a continuation of the CAC SBT 1.5° indices. The purpose of these companies is to facilitate the adoption of major ESG investment approaches to various types of investors, keeping climate change in mind at all times.In the first phase, the purpose of each index is filtration, or selection based on the principlesof the UN Global Compact and exclusionary selection for companies involved in the extraction of energy resources, or dealing in tobacco or unusual weapons.The components of these indices are companies that have taken a stance on reducing greenhouse gas emissions. Under the 2015 Paris Agreement, world governments are required to limit the increase in global temperature to well below 2°C (target 1.5°C) and gradually limit warming.
Weekly Sustainable Finance Newsletter 28/2023
ESG News of the last week in detail
Products and Service
Algebris Green Transition Fund closed fundraising with more than EUR 260m
The Algebris Green Transition Fund completes its latest fund-raising effort of over €260 million (mainly from institutional investors). The fund’s investment work is based on companies supporting the energy transition, the circular economy, smart cities and agro-technology, which is closely related to compliance with the regulations such as SFDR. The fund is addressed to professional investors only.
BNP Paribas Asset Management launched first Irish, ESG-focused ETF
BNP Paribas Asset Management has launched its own sub-fund, named BNP Paribas Easy S&P 500 ESG UCITS ETF. The BNPP AM ETF is listed on Euronext Dublin, Euronext Paris and Deutsche Börse Xetra. The fund will also be listed on Borsa Italiana, SIX Swiss Exchange and the London Stock Exchange at a later date. The S&P 500 ESG index includes approximately 300 of the 500 components of the S&P500.
CIP reaches first close on Infrastructure Fund with EUR 6 billion
Investors from various corners of the globe participated in the first closing of CI V. The strategy follows the proven approach of previous flagship funds, e.g. CI IV. By investing in early-stage projects which are significantly derisked and optimized already prior to the start of the constructions, the fund can cap-ture the premium. At first close, the fund owned already more than 40 renewable energy infrastructure projects.
UK Centre for Greening Finance and Invest-ment appointed Matt Scott as Executive Director
CGFI has selected Matt Scott to its senior management team. Matt Scott has a wealth of experience that will help improve the adoption and use of climate and environmental data and their analysis by financial institutions around the world. CGFI is known for its insightful and influential research and is recognized for its excellent staff. Matt Scott will work for the Oxford Sustaina-ble Finance Group at the University of Oxford. Matt is an authority on green finance and has led designing and implementing a groundbreaking Green Finance strategy in the UK. He is a physicist by education and has also worked in environmental sciences. In addition, he co-founded already green ventures and has helped to found and co-chair the G20 Green Finance Study Group.
State Street Appoints Jessica Donohue to Head of Global Investment Insights, Sustainability and Impact
State Street Corporation, a market-leading financial services provider designated to institutional investors, which offers investment servicing, investment management, and investment research and trading, has appointed vice president Jessica Donohue as head of Global Investment Insights, Sustainability and Impact. Donohue will oversee State Street’s sustainability efforts. Donohue held various leadership roles at State Street for more than two decades, such as Chief Innovation Officer and Head of Advisory and Information Solutions for Global Exchange (now State Street Alpha) and Head of Performance & Analytics for Investment Services.
Net Zero / Decarbonization Commitments
Amundi pushed towards an accelerated transition to a low carbon economy
In 2022, many attempts have been made to tackle climate change while reducing the social impact. This is a phenomenon of key importance to the economy. An active and constructive dialogue with issuers is essential, which will positively influence the overall strategy and the future. Amundi argues that every sector and every economic entity must undergo rapid transformation. Under the 2025 ESG Ambition plan, Amundi is engaging with additional companies on its climate strategy. Amundi considers it its duty to transform energy companies, especially oil companies, thus it invests in the energy sector. As a consequence, Amundi has worked with more than 400 companies, where it implemented changes to the electoral system, opposing the re-election of 500 directors, and voted against executive compensation proposals.
BNP Paribas AM publishes 2023 AGM season voting results
BNPP AM continues to implement its voting policy during the 2023 annual general meeting season with an average of 37% dissent rate for all resolutions. The level of opposition of BNPP AM has grown in recent years. Furthermore, 55% of the resolutions concerning salaries were rejected. 48% of resolutions regarding the appointment of directors were rejected. In accordance with its policy, BNPP AM opposed the election of only male directors, but this was downplayed, thus a wave of opposition grew. The role of investors is to emphasize the role of women in decision-making bodies. BNPP AM additionally showed significant support for shareholder resolutions on environmental (88%) and social (96%) issues. Companies are expected to achieve net zero emissions by 2050 at the latest, backed up by credible decarbonization strategies and milestones. Regarding biodiversity, BNPP AM expects companies to assess and report their major impacts and dependencies on nature. Failure to meet these obligations will result in the rejection of ordinary resolutions.
Regulatory and Law
ESMA provides insights into the expected sustainability disclosures in prospectuses
The European Securities and Markets Authority (ESMA) has issued a statement on sustainability information. ESMA’ s expectations on how the disclosure requirements should be met were set out, taking into account the transition towards ESG. The Statement aims towards providing more clarity in regards to the required disclosure of ESG information. ESMA highlights the importance of reporting the issuer’s non-financial infor-mation in line with the CSRD. Moreover, the statement clarifies which disclosures are required for “use of proceeds” and ”sustainability-linked bonds”. Additionally, the guidelines should unify the ruling of National Competent Authorities (NCAs). ESMA and NCAs will continue to monitor the market to deter-mine whether these guidelines should be revised.