Weekly ESG News: Financial Services and Insurance Industry (28/2024)
News in the spotlight: KPMG Unveils Clear on Climate Reporting Hub
KPMG has launched “Clear on Climate Reporting,” a digital hub to help companies report the financial impacts of climate-related risks and opportunities.
Regulations & Law
KPMG Unveils Clear on Climate Reporting Hub
KPMG has launched “Clear on Climate Reporting,” a digital hub designed to assist companies in reporting the financial impacts of climate-related risks and opportunities to investors and regulators. This new resource comes as businesses face increased scrutiny over the financial reporting of climate change effects. The hub offers comprehensive resources such as FAQs, podcasts, and videos, addressing key issues like recognizing liabilities from net zero commitments, accounting for emissions schemes, ESG measures in executive pay, and considerations when purchasing carbon credits. Brian O’Donovan, Global IFRS and Corporate Reporting Leader at KPMG, emphasized the necessity for companies to clearly communicate the financial implications of their sustainability plans to investors, even if they believe there is no financial impact. Larry Bradley, Global Head of Audit at KPMG, highlighted the importance of aligning financial statements with non-financial information to meet IFRS standards, ensuring a connected picture of performance for stakeholders (source: KPMG.com).
GRESB Launches Transition Analytics
to Aid Asset Managers
in Managing Transition
Risks and Achieving
Net Zero Targets
GRESB has launched Transition Analytics, a groundbreaking tool tailored for asset managers seeking to navigate the complexities of transition risks and achieve ambitious net zero targets. This innovative platform stands out with its detailed emissions data spanning 11 critical sectors, linking over 148,000 physical assets to 3,000 listed companies and their subsidiaries. By providing comprehensive insights and projections up to 2029, Transition Analytics enables asset managers to set sector-specific targets aligned with global standards such as the Net Zero Asset Owner Alliance. This capability not only supports compliance with regulatory frameworks like the Sustainable Finance Disclosure Regulation (SFDR) but also enhances strategic capital allocation and resilience across portfolios. Institutions such as Barclays and BNP Paribas are leveraging these capabilities to integrate climate considerations into their investment strategies effectively, driving sustainable growth and minimizing environmental impact (source: GRESB.com).
Leadership Announcements
Jean-Charles van den Branden Appointed Global Sustainability Leader at Bain & Company
Bain & Company has appointed Jean-Charles van den Branden as the new Global Sustainability Practice Leader. With over 25 years at Bain, van den Branden has advised leading Consumer Products, Advanced Manufacturing, and Energy clients, and focused on private equity climate investments. He succeeds François Faelli, who will now serve as Global Head of Capabilities. Christophe De Vusser, Bain’s Worldwide Managing Partner, praised van den Branden’s pivotal role in advancing clients’ sustainability goals and emphasized the firm’s commitment to creating a more sustainable, equitable, and inclusive world (source: BAIN.com).
Jeff McDermott Joins EIP as Head of Strategic Finance to Drive Clean Energy Investments
Energy Impact Partners (EIP) has appointed Jeff McDermott as Partner and Head of Strategic Finance. McDermott, formerly Global Co-Head of Investment Banking at Nomura Securities, founded Greentech (now Nomura Greentech) and brings extensive experience in energy transition-focused investment banking. Hans Kobler, EIP’s Founder, praised McDermott’s strategic insight and experience, noting the growing need for capital in clean energy. McDermott expressed enthusiasm for EIP’s innovative approach, emphasizing the importance of connecting innovators with incumbents to drive the energy transition. He looks forward to leveraging his 15 years of M&A and capital raising experience to support EIP and its portfolio companies (source: energyimpactspartners.com).
ESG Data & Analytics
GRI's New Service Supports CSRD Compliance
The Global Reporting Initiative (GRI) has launched the GRI-ESRS Linkage Service to help companies align their sustainability reporting with the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainable Reporting Directive (CSRD). GRI, known for its global standards, recently updated its frameworks, including new climate change and biodiversity reporting standards. The ESRS, developed by EFRAG and adopted by the EU in 2023, mandates detailed sustainability disclosures for over 50,000 companies under the CSRD, covering environmental, human rights, and social impacts. GRI and EFRAG’s collaboration ensures interoperability, with tools like the GRI-ESRS Interoperability Index aimed at streamlining reporting requirements. The new GRI-ESRS Linkage Service reviews companies’ GRI content indices, provides feedback on ESRS alignment, suggests structuring the sustainability statement, and identifies ESRS data points needing GRI linkage (source: globalreporting.org).
ESG & Green Bond Issuances
SBTN Updates Guidance on Corporate Nature Targets
The Science Based Target Network (SBTN) has revised its approach to corporate nature targets, outlining five essential steps: assessment of impact, prioritization, target setting, action, and tracking progress. Companies are urged to understand their effects on nature, including land use changes, resource extraction, and emissions. They should then identify areas of significant impact and feasible mitigation. Targets, validated by SBTN, should integrate biodiversity, with methodologies already provided for land and freshwater; ocean targets are planned for 2025. Aligning with SBTN’s guidance not only helps meet disclosure standards like CDP and TCFD but also signals commitment to managing nature impacts to investors (source: sciencebasedtargetnetwork.org).
Net Zero Commitments
BlackRock Introduces Climate and Decarbonization
Voting Policy
Voting Policy
BlackRock has launched new “Climate and Decarbonization Stewardship Guidelines”, establishing specific engagement and voting policies for funds focused on low-carbon transitions. This policy aims to balance climate-related risks and opportunities with the firm’s fiduciary duty to prioritize financial returns. BlackRock will apply these guidelines to funds explicitly directed by clients towards decarbonization objectives, while a benchmark policy will consider climate-related risks where financially material. Key elements include expectations for companies to disclose 1.5°C-aligned strategies and science-based emissions targets. The policy targets sectors critical to the low-carbon transition and aims to ensure robust oversight of climate risks and opportunities by company boards (source: blackrock.com).
Amazon Launches Sustainability Exchange for Supply Chain Decarbonization
Amazon has launched the Sustainability Exchange, a free platform aimed at helping companies, particularly in its supply chain, reduce their climate footprint. This initiative follows Amazon’s co-founding of the Climate Pledge, urging companies to achieve net zero carbon by 2040, a decade ahead of the Paris Accord’s target. Amazon’s efforts towards its own net zero goals include deploying 24,000 electric delivery vehicles, constructing LEED Platinum-certified HQ2, and ensuring 100% renewable energy matching across its global operations. Chief Sustainability Officer Kara Hurst highlighted the platform’s role in sharing Amazon’s learnings and facilitating collective action across suppliers. The Sustainability Exchange focuses on key areas like Buildings, Carbon Neutralization, and Renewable Energy, offering tools such as Carbon Measurement and Reporting Playbooks. Amazon’s 2023 Sustainability Report emphasizes expectations for supplier decarbonization plans and ongoing collaboration to combat climate change (source: Amazon).