Weekly ESG News: Financial Services and Insurance Industry
News in the spotlight: Morningstar Sustainalytics Enhances its Physical Climate Risk Assessments
Morningstar Sustainalytics has enhanced its Physical Climate Risk Metrics product, offering deeper insights into companies’ exposure and financial resilience related to physical climate risks. The dataset covers over 12,000 companies and provides visibility into expected financial losses until 2050. The metrics support investor alignment with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and offer various assessment views to quantify climate risks.
Weekly Sustainable Finance Newsletter 25/2023
ESG News of the last week in detail
Products and Service
EIB issues its first ever digital Climate Awareness Bond on the blockchain
The European Investment Bank (EIB) has issued its first SEK 1 billion digital Climate Awareness Bond using the so|bond platform. The platform is based on blockchain technology. Furthermore, the solution incorporates a protocol that rewards participating nodes for improving their environmental footprint. The bond has a maturity of two years and comes with a coupon of 3.638%. Crédit Agricole CIB and SEB acted as joint lead managers of the issuance.
Bank of Amercia (BofA) joins Sustainable Aviation Fuel (SAF) program
Bank of America has become the first financial institution to join American Express Global Business Travel and Shell Aviation’s sustainable aviation fuel (SAF) program. The program aims to scale SAF supply and demand in the aviation industry, with participants including Aon, Cathay Pacific, JetBlue, and Delta. Bank of America’s involvement aligns with its goal of having SAF account for 20% of its annual employee air travel by 2030. The participation supports the bank’s commitment to mobilize $2 billion in sustainable finance for SAF production.
AXA Investment Managers launched the AXA ACT People & Planet Equity fund
AXA Investment Managers has launched the AXA ACT People & Planet Equity fund, which invests in companies aligned with the UN SDGs. The fund aims for financial returns and positive environmental and social contributions. On top. the new investment product focuses on social progress, energy transition, and biodiversity. It uses external SDG data and AXA’s research to assess company contributions.
MAPFRE launches Europe’s first biomethane mutual fund
MAPFRE, along with partner Abante and IAM Carbonzero, is launching MAPFRE Energías Renovables II, a fund that aims to invest in 20-25 biomethane power plants in Spain over five years. The fund seeks to raise up to 100 million euros and generate a target return of 12%-15% per year, addressing decarbonization, the energy crisis, and dependence on imported natural gas while supporting the rural economy.
IFC and Bank BTPN Partner in Landmark Social and Green Bond Deal
International Finance Corporation (IFC) plans to invest up to $500 million in PT Bank BTPN Tbk (BTPN) through social and green bond issuances. The main beneficiary will be Indonesia’s MSME sector and climate change efforts. The investment will help develop Indonesia’s thematic bond market. Additionally, it provides financing for renewable energy projects and women-led MSMEs.
South Africa launches $1bn green hydrogen fund with Netherlands, Denmark
South Africa, the Netherlands, and Denmark have launched a $1 billion green hydrogen fund to advance the country’s energy transition and combat climate change. The fund aims to establish a green hydrogen export hub using renewable energy sources, with a focus on collaboration and local development. The initiative recognizes South Africa’s potential to lead in the global hydrogen market and emphasizes the importance of a just energy transition.
Regulatory and Law
SBTi launches six-week public consultation on Beyond Value Chain Mitigation
The Science Based Targets initiative (SBTi) is seeking public input on beyond value chain mitigation (BVCM) as part of its upcoming guidance. This consultation will inform companies’ climate action decisions and their contribution to the global net-zero transition. The public consultation is open until July 30, 2023.
UK and France launch new initiative on Biodiversity Credits
The UK and France have launched a Global Roadmap to support companies in contributing to nature recovery through biodiversity credits, aiming to facilitate global cooperation and fair distribution of income. An advisory panel of international experts will guide the initiative, leveraging private sector financing for conservation and restoration efforts.
Switzerland approves climate and innovation law
Switzerland votes in favor of a new law which enables the net zero transition until 2050. Main points of the law include financial support of CHF 2bn for replacing old oil and gas heating systems. Financial incentives for companies which use climate- and environmental-friendly technologies in their production processes are also part of the new law.
ESG Data and Analytics
Morningstar Sustainalytics Enhances its Physical Climate Risk Assessments
Morningstar Sustainalytics has enhanced its Physical Climate Risk Metrics product, offering deeper insights into companies’ exposure and financial resilience related to physical climate risks. The dataset covers over 12,000 companies and provides visibility into expected financial losses until 2050. The metrics support investor alignment with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and offer various assessment views to quantify climate risks.
Read more here.
Sustainable Finance Daily | 11 Morningstar Indexes introduces Morningstar Eurozone Societal Development Select 80 Index
Morningstar introduces the Morningstar Eurozone Societal Development Select 80 Index, providing exposure to Eurozone companies with strong social policies. The index, based on Morningstar Indexes and Sustainalytics data, will be exclusively licensed by HSBC for structured products. As a starting point, the Index will take Morningstar´s Eurozone Large-Mid Cap Index (approximately 400 constituent) and weights eligible constituents based on the Societal Development Score system of Sustainalytics.
Sustainability Report Releases
Apollo Publishes 14th Annual Sustainability Report, “Investing in Tomorrow, Today”
Apollo has published its 14th annual sustainability report, showcasing accomplishments in clean energy investments, supplier diversity, employee volunteering, and philanthropy. Addionally, the report aligns with industry standards and includes an ESG Reporting Supplement with data on properties owned by Apollo-managed real estate funds.
MetLife publishes 2022 Sustainability Report
MetLife has released its 2022 Sustainability Report, demonstrating its commitment to sustainability and the United Nations Sustainable Development Goals. Overall, the report highlights achievements in areas such as grants, greenhouse gas emissions reduction, responsible investments, diversity, equity, and inclusion, and employee volunteering.
Green- and ESG Bond Issuances
BBVA and IFC announced the launch of first blue bond in Colombia
BBVA in Colombia plans to issue a $50 million blue bond, becoming the country’s first financial institution to do so. The bond will fund projects for water resource protec-tion, including water treatment plants, ocean preservation, and ecosystem conservation. BBVA aims to support Colombia’s environmental goals and increase its sustainable financing to 4.6 trillion pesos this year.