Weekly ESG News: Financial Services and Insurance Industry (27/2024)
News in the spotlight: CO2 AI launches product emission solution
CO2 AI has launched the first scalable solution to compute carbon emissions for thousands of products, enabling companies to reduce their environmental impact.
Products & Services
Fidelity International published updated sustainable investing framework
Fidelity International has introduced a new three-tier sustainable investing framework to align with evolving ESG client demands and regulatory requirements. The framework categorizes funds into “ESG Unconstrained,” “ESG Tilt,” and “ESG Target,” each reflecting different levels of ESG integration and objectives. This move addresses mandates like the EU’s SFDR and the UK’s FCA Sustainability Disclosure Requirements, ensuring transparency and compliance. Fidelity’s chief sustainability officer, Jenn-Hui Tan, emphasized the framework’s role in meeting regulatory and client needs while supporting global sustainability efforts.
Invesco launches customized ETF for Varma
Invesco launched the Invesco MSCI Global Climate 500 ETF (KLMT), designed specifically for Varma. The Finnish pension insurer invested $1.6 billion in the fund. The ETF, developed in collaboration with MSCI, focuses on companies that meet environmental and climate criteria. Institutional use of ETFs has grown significantly, with investors seeking the benefits of liquidity and flexibility that ETFs provide. According to Emily Foote McKinley of Invesco, the ability to quickly adjust investments intraday without lengthy processes is a key advantage for institutions. This trend reflects a broader shift towards customized ETFs tailored to specific institutional needs.
BlackRock updates voting policy for climate change mandates
BlackRock, the world’s largest asset manager, has introduced a new voting policy for climate-focused funds, allowing them to vote differently on shareholder proposals related to decarbonisation. This policy, starting in the fourth quarter, applies to 83 funds with $150 billion in assets and aims to balance the demands of European and US clients. The funds will evaluate if companies are working to limit global temperature rise to 1.5°C, per the Paris Agreement. US and Asian funds with climate mandates will decide later this year whether to adopt this policy. BlackRock manages $10.5 trillion in assets.
LOIM will manage sustainable equity mandate for Wiltshire Pension Fund
Wiltshire Pension Fund has selected Lombard Odier Investment Managers (LOIM) to manage the equities portion of its Climate Opportunities (Clops) portfolio. The funds will be invested in LOIM’s Planetary Transition fund, which focuses on companies driving the transition to net zero and addressing environmental issues like ocean health and biodiversity loss. Based on the ‘planetary boundaries’ framework, this strategy targets 40 to 50 companies in sectors such as electrification, food systems, and nature restoration. Jennifer Devine, Head of Wiltshire Pension Fund, praised the alignment of this strategy with their investment philosophy, emphasizing its potential for sustainable returns.
Leadership Announcements
ESG Book appoints Justin Fitzpatrick as new CEO
ESG Book has named Justin Fitzpatrick as its new CEO. Fitzpatrick, who co-founded FullCircl and DueDil, brings extensive experience in leading investor-backed software companies. ESG Book provides a platform with 200,000 corporate disclosures, utilized by major financial institutions. His appointment comes amid increasing demand for ESG and climate data solutions due to rising regulatory requirements. Fitzpatrick will spearhead the company’s next growth phase, strengthening its position in the sustainability sector (source: ESG Book).
ING appoints Cindy Jia as Head of Sustainable Finance for America
ING announced two key appointments in its Americas sector. Cindy Jia is now head of Sustainable Finance for the Americas, focusing on sustainability advisory and financing solutions. Ana Carolina Oliveira, former head of Sustainable Finance, will now lead the Technology, Media, Telecom, and Healthcare sectors. These appointments align with ING’s commitment to sustainability and net-zero initiatives. Cindy and Ana Carolina bring extensive experience to their new roles, supporting ING’s goals of facilitating clients’ transitions to a low-carbon society.
Luiz Amaral steps down as CEO of SBTi
Dr. Luiz Amaral will step down as CEO of the Science Based Targets initiative (SBTi) at the end of July 2024, citing personal reasons. Susan Jenny Ehr, the current Chief Legal Officer, will serve as interim CEO during the transition period. Dr. Amaral’s tenure saw significant growth, with the number of companies with validated targets increasing over five-fold to 5,500. Under his leadership, SBTi incorporated as an independent organization, expanded globally, and separated standard development from target validation services. The Board has commenced a search for a permanent CEO (source: SBTi).
ESG Data & Analytics
Moody´s and MSCI announced strategic partnership to enhance risk solutions
Moody’s Corporation and MSCI Inc. have formed a strategic partnership to enhance transparency and provide data-driven risk solutions, particularly in ESG and sustainability. Moody’s will use MSCI’s sustainability data and models, integrating MSCI’s ESG ratings into its offerings for banking, insurance, and corporate sectors. MSCI will leverage Moody’s Orbis database to extend ESG coverage to private companies and explore solutions for the private credit market. This partnership aims to benefit customers by combining Moody’s risk assessment expertise with MSCI’s ESG content. Financial terms of the deal were not disclosed (source: MSCI.com).
CO2 AI launches product emission solution
CO2 AI has launched the first scalable solution to compute carbon emissions for thousands of products, enabling companies to reduce their environmental impact. Traditional methods like manual Life Cycle Assessments (LCAs) are slow and costly, but CO2 AI’s advanced computation engine uses Generative AI to quickly match emission factors to product data. Symrise, a global manufacturer, is leveraging CO2 AI to measure emissions across its extensive operations and aims for significant reductions by 2030. The solution ensures compliance with standards like ISO 14067 and ISO 14044, facilitating collaboration and transparency in decarbonization efforts.