Weekly ESG News: Financial Services and Insurance Industry (44/2024)
News in the spotlight: Verra launched Nature Framework
Verra has launched the Nature Framework under its SD VISta Program to support biodiversity by quantifying outcomes and generating Nature Credits. This framework, informed by Indigenous and community insights, incentivizes conservation investments that yield tangible biodiversity results.
Products and Services
Aviva Investors launched new Carbon Removal Fund
Aviva Investors has launched the Carbon Removal Fund (CRF) to offer institutional investors, such as corporates and pension schemes, access to carbon removal solutions that align with net-zero goals while providing investment returns. Seeded with an initial commitment from Aviva’s Investment, Wealth and Retirement business, the CRF will invest in both nature-based and engineered carbon removal projects, including afforestation, peatland and mangrove restoration, and commercial forestry. The fund, compliant with Article 9 of the SFDR, will pursue global investments to address climate adaptation disparities between developed and emerging markets. Highlighting its innovative approach, the fund supports projects with co-benefits like biodiversity enhancement, improved water quality, and public engagement. The launch coincides with Aviva’s research publication, “Navigating nature,” which emphasizes the significance of nature-related risks and opportunities for investors.
EdenTree launched new Global Select Government Bond Fund
EdenTree Investment Management has launched the EdenTree Global Select Government Bond Fund, managed by David Katimbo-Mugwanya, Head of Fixed Income. The fund primarily invests (at least 80% exposure) in ESG-labelled government and government-related bonds that fund projects reducing carbon emissions and enhancing community services. With a global remit, it applies EdenTree’s Oppressive Regime screen to exclude bonds from nations failing to meet human rights standards. This fund was developed to meet specific client demands for sustainable government bond solutions and aims to provide quarterly income with sustainability as a focus. The launch underscores the importance of fixed income for addressing social and environmental challenges, complementing EdenTree’s existing responsible investment portfolio (source: Edentreeim.com)
Leadership Announcements
NatureFinance appointed Julie McCarthy and Simon Zadek as the new Co-CEOs
NatureFinance has appointed Julie McCarthy and Simon Zadek as Co-CEOs, aiming to elevate the organization’s impact in integrating nature into global finance. Simon Zadek, who has been with NatureFinance since its founding, highlights that the joint leadership structure balances technical expertise with strategic execution. Julie McCarthy, previously Managing Director, brings over 20 years of experience in economic justice and financial governance, including leadership roles at the Open Society Foundations and as an advisor to the WHO. Under their leadership, NatureFinance will focus on key areas such as sustainability-linked sovereign debt, nature credit markets, and advocating for the bioeconomy, alongside promoting the use of biodiversity data for risk management and fostering nature-positive markets.
LGT Wealth Management appointed Phoebe Stone Chief Sustainability Officer
LGT Wealth Management has appointed Phoebe Stone as its first Chief Sustainability Officer (UK), highlighting the firm’s commitment to achieving its Net Zero 2030 goal. Stone, who joined LGT in 2014 as a Portfolio Manager and became a Partner in 2020, has led the firm’s sustainable investment initiatives since launching this division in 2018. In her new role, she will continue advancing LGT’s sustainability efforts across client investments and internal operations. This position marks a significant step for the firm, integrating sustainability more deeply into its structure, especially following the acquisition of the abrdn discretionary fund management business in 2023. LGT CEO Ben Snee emphasized that the move underscores the company’s dedication to sustainability as a core part of its business, not just a niche area. Stone’s appointment is complemented by the promotion of Jordan Kelly, who will now lead sustainable research efforts, reflecting the firm’s ongoing investment in expertise for sustainable asset selection and stewardship.
Regulations and Law
Founding Partners of The Investor Agenda release updated guidance for investors to accelerate ambitious Investor Climate Action Plans
The seven Founding Partners of the Investor Agenda have released updated guidance for Investor Climate Action Plans (ICAPs) to align with industry changes and enhance investment strategies. This 2024 update complements the existing ICAPs Expectations Ladder, helping investors create strong transition plans and assess their progress. Key updates include new resources linked to the IFRS Foundation’s ISSB, refined investment strategy details, and additional tools aligned with the latest climate science. The guidance aims to improve transparency and support investors in meeting climate goals. Rev. Kirsten Snow Spalding from Ceres emphasized its role in standardizing clear, science-aligned action plans for navigating climate risks.
SBTN announced first companies publicly adopting science-based targets for nature
The Science Based Targets Network (SBTN) has announced the first companies to adopt science-based targets for nature, focusing on freshwater and land. Kering, GSK, and Holcim have set pioneering targets following SBTN’s year-long pilot, marking a milestone in corporate sustainability. These targets address nature loss by aligning business operations with science-based benchmarks and include commitments such as freshwater reduction and protection against ecosystem conversion. The announcement comes as COP16 emphasizes the need for urgent action on biodiversity. SBTN’s guidance aims to support companies in taking strategic, measurable actions to meet global nature goals by 2030.
Verra launched Nature Framework
Verra has launched the Nature Framework under its SD VISta Program to support biodiversity by quantifying outcomes and generating Nature Credits. This framework, informed by Indigenous and community insights, incentivizes conservation investments that yield tangible biodiversity results. Nature Credits, measured in quality hectares (Qha), enable companies to fund critical restoration efforts and contribute to their long-term nature strategies. The initiative aligns with the Kunming-Montreal Global Biodiversity Framework’s Target 19, aiming to mobilize $200 billion annually for biodiversity. Verra emphasizes comprehensive social safeguards to ensure informed consent and equitable benefit-sharing with local communities involved in projects.
IPSASB proposes disclosure requirements for public sector entities
The International Public Sector Accounting Standards Board (IPSASB) has released its first Exposure Draft for Sustainability Reporting Standards (SRS ED 1), focusing on climate-related disclosures. This draft outlines disclosure requirements for public sector entities regarding climate-related risks and opportunities, as well as public policy programs and their outcomes. The proposals aim to align public sector reporting with global best practices while addressing the specific needs of public sector report users, enhancing consistency and comparability across sectors. IPSASB standards are designed for entities that deliver public services, primarily funded through taxes or transfers, and do not aim to make profits. This includes various government levels and international organizations. The draft is open for public comment until February 28, 2025, and the feedback will help shape the final standard, guiding public sector responses to climate change.
Net Zero Commitments
Net-Zero Asset Owner Alliance published fourth Progress Report
The UN-convened Net-Zero Asset Owner Alliance (NZAOA), comprising 88 members with USD 9.5 trillion in assets under management (AuM), has highlighted progress in its fourth Progress Report. With 98.9% of its total AuM (USD 9.4 trillion) covered, 81 members have set 2025 decarbonisation targets in line with the Paris Agreement. Members have reported average annual reductions in financed GHG emissions of at least 6%, aligning with the IPCC’s 1.5°C pathways. Nearly 79 members have set sub-portfolio targets, encompassing 48% of AuM (USD 4.3 trillion), with targeted reductions averaging 26% by 2025. Ahead of COP29, NZAOA urges governments to adopt bold climate policies and short-term sector plans to support the net-zero transition. Leaders emphasize the need for alignment between climate commitments and actual policy actions to ensure sustained progress (source: unepfi.org).