Weekly ESG News: Financial Services and Insurance Industry (21/2024)
News in the spotlight: GRI and IFRS Foundation collaboration to deliver full interoperability of sustainability reportings
The IFRS Foundation and the Global Reporting Initiative (GRI) are enhancing their collaboration to enable seamless sustainability reporting. This effort aims to optimize the use of GRI and ISSB Standards together, addressing both investor needs and broader stakeholder interests of an interoperability of sustainability reportings.
Products & Services
ETF Partners closed its fourth Green Tech Fund
ETF Partners has successfully closed its fourth fundraising round, raising €284 million and surpassing its initial target of €250 million. This oversubscribed fund will invest in innovative European companies focused on environmental impact, including notable ventures like Dexter, Net Purpose, Fairly Made, and Open Cosmos. Supported by institutions such as the European Investment Fund and British Patient Capital, the fund’s success highlights growing institutional interest in climate tech solutions despite a challenging fundraising environment. Patrick Sheehan, co-founder and managing partner, emphasized the importance of supporting entrepreneurial businesses tackling climate change. The fund’s strategy has shown success with strong portfolio growth and several recent exits (source: etfpartners.capital).
BNP Asset Management launches global equity SRI PAB fund
BNP Paribas Asset Management has launched the BNP Paribas Easy MSCI ACWI SRI S-Series PAB 5% Capped UCITS ETF, expanding its SRI PAB ETF range to over EUR 6.5bn in AUM. This ETF, listed on Euronext Paris, Borsa Italiana, and SIX Swiss Exchange, and set to list on Deutsche Börse Xetra, aims to replicate the MSCI ACWI SRI S-Series PAB 5% Capped Index, providing global equity exposure with high ESG standards. It aligns with Paris Aligned Benchmark targets, aiming for a 50% reduction in greenhouse gas intensity and an annual decarbonization of 7%. Classified as Article 8 under SFDR, it excludes companies with negative ESG impacts and commits at least 35% of its assets to sustainable investments (source: bnpparibas-am.com).
EURAZEO launches next gen impact buyout fund
Eurazeo has launched the Eurazeo Planetary Boundaries Fund (EPBF), an impact buyout fund targeting at least EUR 750 million. The fund aims to address and adapt to planetary boundaries, a concept developed by the Stockholm Resilience Centre, by investing in small to mid-market European companies. EPBF focuses on promoting a regenerative and circular economy and supporting transition and adaptation solutions in sectors like agriculture, waste management, and low-carbon energy. The fund is supported by a high-level advisory board, including former European Environment Agency head Hans Bruyninckx and ex-IKEA sustainability chief Pia Heidenmark Cook, who will guide strategic and impact-focused decisions (source: eurazeo.com).
Quinbrook Infrastructure Partners sponsors project for Green Iron project
Quinbrook Infrastructure Partners has begun developing the Green Iron Project in Gladstone, Queensland, in partnership with Central Queensland Metals. The project will utilize the large magnetite deposit at Eulogie, estimated to contain 465 million tonnes of ore, to produce green iron powered by renewable energy. This $3.5 billion investment aims to create a new export industry, leveraging existing infrastructure and central Queensland’s renewable resources. Quinbrook is in discussions with Stanwell Corporation for hydrogen supply and renewable power, with the project expected to take several years to complete. The initiative aligns with federal and state policies supporting Australian manufacturing and critical minerals (source: quinbrook.com).
Regulations, Law and Frameworks
GRI and IFRS Foundation collaboration to deliver full interoperability of sustainability reportings
The IFRS Foundation and the Global Reporting Initiative (GRI) are enhancing their collaboration to enable seamless sustainability reporting. This effort aims to optimize the use of GRI and ISSB Standards together, addressing both investor needs and broader stakeholder interests. The partnership will involve aligning common disclosures and launching a pilot project on biodiversity. Both organizations will maintain their independent decision-making processes while working towards a unified global sustainability reporting system. This collaboration is intended to reduce duplication and complexity, benefiting report preparers and users worldwide (source: ifrs.org).
ANALYSIS: Attorneys Say SEC Climate Rule Won’t Remain Intact
Attorneys analyzing the SEC climate rule anticipate it won’t remain intact due to numerous legal challenges. Most foresee it surviving only partially, with emissions disclosures facing significant hurdles, particularly greenhouse gas (GHG) emissions and climate-related goals and targets. Despite the SEC’s rollback of certain Scope 3 disclosure requirements, concerns persist regarding the legality of additional disclosures, including those related to governance. Attorneys across different practice areas express varying degrees of skepticism, with those specializing in securities and ESG matters being more optimistic about partial survival compared to labor, employment, and litigation attorneys (source: bloomberglaw.com).
ESG Data & Analytics
Capgemini and Schneider Electric launch platform to manage performance of energy assets
Capgemini and Schneider Electric have teamed up to introduce the Energy Command Center, an innovative platform aimed at helping organizations achieve energy optimization. This collaboration combines Capgemini’s expertise in data integration and AI with Schneider Electric’s cutting-edge energy management technologies. The platform utilizes advanced AI, machine learning, and IoT to monitor, predict, and optimize energy consumption across various assets. Initial testing in Capgemini’s Indian operations resulted in a significant 29% reduction in energy consumption in 2023 compared to 2019, showcasing the platform’s potential to drive meaningful energy efficiency improvements (source: capgemini.com).
ESG & Green Bond Issuances
Emirates Islamic successfully issues USD 750 million 5 Year Senior Unsecured Sustainability Sukuk
Emirates Islamic has successfully issued its inaugural USD 750 million 5-Year Senior Unsecured Sustainability Sukuk, marking a significant milestone in sustainable Islamic finance in the UAE. Oversubscribed 2.8 times, the Sukuk saw strong demand from investors globally, allowing the bank to tighten the profit rate to 5.431 per cent per annum. Aligned with Emirates NBD Group’s Sustainable Finance Framework and Shariah principles, this issuance underscores the bank’s commitment to environmental sustainability and supporting a low-carbon economy. Led by Emirates NBD Capital and Standard Chartered Bank, with support from other key financial institutions, this issuance reinforces the UAE’s position in sustainable finance (source: emiratesislamic.ae).