The Inevitable Policy Response (IPR) has publicly released the data underlying the group’s forecast policy scenarios, saying this “filled a critical gap in capital market alignment and investor strategies for net-zero”.
The new database covers all major jurisdictions and economic sectors, and includes energy and land use. Over 500,000 data points are incorporated.
In October the IPR, a consortium commissioned by the Principles for Responsible Investment (PRI), released a forecast of likely developments from a significant acceleration in climate policy through to 2025 and the associated longer-term real economy impacts.
It also released a scenario setting out what is required to hold the global temperature increase to 1.5°C above pre-industrial levels.
The IPR Investor Database was built with assistance from the group’s strategic partners, which include BlackRock and BNP Paribas Asset Management.
“This database release of the granular details underlying IPR scenarios in energy and land use to 2030 and 2050 will allow investors to reflect IPR forecasts directly in their portfolio construction, investment and engagement decisions,” said Julian Poulter, head of investor relations at IPR.
“With asset management leaders responding to the challenge, the onus is now on leading asset owners to reward innovation and award new mandates to emerging products and maximise opportunities around the climate transition.”
The core IPR scenarios are today also being released on a platform that is part of the PACTA portfolio analysis tool, which now also features a metric to help investors prepare for potential portfolio disruption stemming from risks associated with a disorderly transition to a low-carbon economy.
LPPI appoints Chronos for net-zero support
Local Pensions Partnership Investments (LPPI), the asset pooling company currently managing £22bn (€25.7bn) of pension assets, has appointed Chronos Sustainability to support its planning for achieving its already-stated goal of achieving net-zero portfolio emissions by 2050.
“Reaching net zero by 2050 is an appropriate but extremely challenging goal, requiring new data and expert advice,” said Frances Deakin, head of responsible investment at LPPI.
“Working closely with Chronos will enrich our insights, inform our thinking and assist the development of a transition Plan aligned with responsible investment, managing risks, identifying opportunities, and achieving positive outcomes for our client pension funds.”
Stoneport states ESG ambitions
Stoneport, a consolidator for small UK defined benefit (DB) schemes, has published an “ESG Ambitions” statement, set out as timeline given that the actions the trustees expect to take vary over the different stages of Stoneport’s lifecycle.
For example, the document states that as and when Stoneport becomes a centralised scheme, the trustees expect to be able to evolve the ESG strategy significantly. It would be possible to consult with all participating employers through the Stoneport Alliance on the development of bespoke policies, it said.
Launched last year, Stoneport aims to have assets of around £2.5-3.5bn once it has reached capacity. The consolidator is said to be talking to around 100 schemes to agree a first tranche of transitions in the first quarter of next year.
Biodiversity reporting standard moves
CDP will be participating in the revision of the Global Reporting Initiative’s (GRI’s) biodiversity standard and will use the new standard to inform its disclose system, it has been announced.
The GRI also said the Taskforce on Nature-related Financial Disclosures (TNFD) has confirmed that it will use the revised standard as an input.
Last week the GRI and EFRAG, the EU financial reporting advisory body, announced they would be working together to align a new EU biodiversity reporting standard with the GRI update. EFRAG is to make the draft EU standard available to the European Commission in mid-June.
“One of the key take-aways from COP 26 was that two of the most pressing issues of our time, climate change and biodiversity loss, are intrinsically linked,” said Judy Kuszewski, chair of the body responsible for setting the GRI standards.
“Holding organisations accountable for their impacts is crucial to break the chain of events on both, for which transparency forms the basis.”
Leveraged loan data vendor coverage ‘severely lacking’
ESG data vendor coverage of leveraged loans and high yield bonds is severely lacking compared with coverage of investment grade companies, according to research by the European Leveraged Finance Association (ELFA).
ELFA analysed coverage by three major ESG data vendors for three debt indices and found major discrepancies in data coverage across asset classes.
ELFA said all actors had a role to play in improving ESG data availability and usability. Data vendors, for example, needed to be “open-minded about how they could adjust their methodologies to address the fact that borrowers in the leveraged finance markets tend to be smaller, while at the same time not compromising the integrity of their products”.
ELFA said it was extending engagement under its ESG Disclosure Initiative to data providers to encourage greater consistency and increased coverage of the leverage finance market.
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