Weekly ESG News: Financial Services and Insurance Industry
News in the spotlight: Clarity AI introduces SFDR-aligned index methodology
Clarity AI, a leading sustainability technology platform, has introduced a pioneering Sustainable Investment index and ETF methodology in alignment with the Sustainable Finance Disclosure Regulation (SFDR). This methodology enables the creation and marketing of products complying with the EU’s Sustainable Investment definition, focusing on innovative industries like electric vehicles and sustainable infrastructure. It also offers transparency and customization, allowing financial market participants to assess sustainable investments based on various criteria, including UN Sustainable Development Goals and EU Taxonomy contribution. Ani Widham, Senior Product Manager at Clarity AI, sees this methodology as a game-changer for the future of sustainable investing, providing clarity and transparency for investors.
Weekly Sustainable Finance Newsletter 40/2023
ESG News of the last week in detail
Products and Services
BlackRock launches climate transition-oriented private debt fund
BlackRock has recently introduced a climate transition-oriented private debt fund (CPD) within its global private debt platform. This fund is designed to offer investors a single point of access to a diversified and high-quality private debt portfolio. CPD focuses on supporting middle-market companies in Europe and the US in their climate transition efforts through direct lending, venture capital, opportunistic investments, and real asset debt allocations. The fund employs a proprietary Climate Transition Rating Framework to evaluate companies’ climate transition readiness. It also actively engages with portfolio companies to help them achieve their carbon reduction goals, believing that such efforts enhance long-term resilience and credit quality. The CPD portfolio is managed by a team of private debt investors and experts in sustainability and transition investing from BlackRock.
Morgan Stanley launches Charitable Giving Solution
Morgan Stanley at Work has introduced a Charitable Giving Program, simplifying charitable donations through a donor-advised fund platform. This program allows companies to create and manage Corporate Giving Accounts, empowering employees to support their chosen charities. Employees can also open Individual Giving Accounts to enhance their personal charitable giving. This initiative aims to attract and retain talent, aligning employees with their organization’s values, and democratizing access to donor-advised funds. The program is powered by Morgan Stanley Global Impact Funding Trust (MS GIFT).
BNP Paribas Asset Management expands fixed income ETF range
BNP Paribas Asset Management (BNPP AM) has expanded its fixed income ETF range by introducing two new sustainable funds, BNP Paribas Easy € Corp Bond SRI Fossil Free Ultrashort Duration UCITS ETF and BNP Paribas Easy USD Corp Bond SRI Fossil Free UCITS ETF. These funds are part of the BNP Paribas Easy Luxembourg SICAV and were listed on various European stock exchanges. The first ETF focuses on ultra-short duration, following the Bloomberg MSCI Euro Corporate Ultrashort Fixed and Floating Rate SRI Index, incorporating sustainability criteria. The second ETF focuses on US dollar corporate bonds and follows the Bloomberg MSCI US Corporate SRI Sustainable ex Fossil Fuel Bond Index, emphasizing sustainability factors. These additions signify BNPP AM’s commitment to meet growing investor demand for ESG-focused fixed income exposure. BNPP AM manages a total of EUR 47 billion in ETF and index fund assets, including thematic and sustainable products.
Thematics AM launches new climate fund
Thematics Asset Management has introduced the Thematics Climate Selection Fund, with a focus on companies aligned with the Paris Agreement’s goal of limiting global temperature rise to below 2°C. This multi-thematic fund incorporates investments from five thematic strategies: AI and robotics, safety, the subscription economy, water, and wellness. It aims to feature 40-60 companies well-prepared for a decarbonized future, co-managed by Arnaud Bisschop, Karen Kharmandarian, and climate specialist Guillaume Gosselin. The fund integrates ESG considerations, holds the French Label ISR, and employs both qualitative and quantitative assessments to build a Paris-aligned portfolio, focusing on climate governance, strategy, risk management, engagement, disclosure, and targets.
Mirova Launches €2 Billion Fund for European Energy Transition Infrastructure
Mirova has initiated the Mirova Energy Transition 6 (MET6) project, aiming at raising up to €2 billion. MET6 will focus on supporting the decarbonization of energy production and consumption, particularly in Europe. The fund will invest in a range of renewable energy sources, low-carbon electric mobility, and hydrogen development. While its primary focus is on Europe, it may also invest in other OECD member countries, expanding partnerships in new regions.
ESG Data and Analytics
Clarity AI introduces SFDR-aligned index methodology
Clarity AI, a leading sustainability technology platform, has introduced a pioneering Sustainable Investment index and ETF methodology in alignment with the Sustainable Finance Disclosure Regulation (SFDR). This methodology enables the creation and marketing of products complying with the EU’s Sustainable Investment definition, focusing on innovative industries like electric vehicles and sustainable infrastructure. It also offers transparency and customization, allowing financial market participants to assess sustainable investments based on various criteria, including UN Sustainable Development Goals and EU Taxonomy contribution. Ani Widham, Senior Product Manager at Clarity AI, sees this methodology as a game-changer for the future of sustainable investing, providing clarity and transparency for investors.
Regulatory and Law
European Parliament approves European Green Bond standard
MEPs have approved a pioneering voluntary standard for “European Green Bonds,” setting uniform criteria for issuers using this label. The regulation aligns with the EU’s sustainability taxonomy, ensuring transparency in the use of bond proceeds and requiring disclosure of their contribution to a company’s green transition. The standard also establishes oversight for external reviewers of these bonds. Until the full implementation of the EU’s taxonomy framework, issuers must allocate at least 85% of bond funds to environmentally sustainable activities. This development aims to drive green finance and support the EU’s climate neutrality transition, responding to citizen demands.
UN launches ten principles for action to close Asia-Pacific sustainable finance gap
The United Nations has launched ten principles for addressing the sustainable finance gap in Asia and the Pacific, as outlined in a report by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). This report emphasizes the critical need for sustainable finance in the region and discusses the challenges and opportunities for policymakers, regulators, and private finance to bridge this gap. It highlights that only a limited number of Asia-Pacific countries have reported their financial needs to meet climate goals. The report presents ten action principles, encouraging stakeholders to cooperate and shift capital towards climate action. It also acknowledges the availability of capital to address the global financing gap but notes the challenges in deploying it effectively. The report was launched at the Ministry of Foreign Affairs of Thailand.
Leadership Announcements
Aviva appoints Leah Ramoutar as Environmental Sustainability Director
Aviva has appointed Leah Ramoutar, previously with Phoenix Group, as its environmental sustainability director, where she will lead the Climate Centre of Excellence and Environment Hub. With over 20 years of experience, Ramoutar will play a key role in helping Aviva achieve its climate goals, including becoming net zero by 2040. Aviva’s commitment to sustainability is evident in their recent £57 million sustainable loan to the Urban Logistics Reit as part of their Sustainable Transition Loans framework. Claudine Blamey, Aviva’s group sustainability director, praised Ramoutar’s addition to the team, highlighting the urgency of taking climate action in the face of recent global weather events.
Green Bond & ESG Bond Issuances
Cyprus issued first Green Bond
The first Green Bond in Cyprus, issued by S.S.H Solar Finance PLC, has achieved Climate Bonds Standard certification, marking a significant step for sustainable finance in the region. This issuance, which took place on July 18, 2023, represents a crucial moment for climate action in Cyprus. S.S.H Solar Finance PLC will utilize the estimated EUR 5.0 million in proceeds to build and operate photovoltaic plants with a capacity of approximately 6.7 MW in Cyprus. These plants are set to be operational between 2024 and 2025, contributing to the transition to sustainable energy sources. Sean Kidney, CEO of the Climate Bonds Initiative, views this as a pivotal move towards sustainable finance and a scalable model for green investments in the region.