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ESG roundup: Investors reinforce support for non-financial disclosures

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Australian asset owners and some of Europe’s largest institutional investors have put their names to a statement supporting better disclosure of non-financial information.

The statement seeks to counter an increasingly common narrative that investors do not care about information that may not appear explicitly financially relevant, despite frequent calls for better disclosure of such information.

“We have made this statement to help companies understand that, if they deliver relevant and useful information, we will use it,” the statement reads.

Signatories include Aberdeen Standard Investments, Hermes, Martin Currie, NN, and PGGM, plus Australian pension funds Cbus Super and VicSuper.

The statement was brokered by the International Integrated Reporting Council, which seeks to improve reporting in the public and private sectors.

The full statement is available here.

Rise in corporates pricing carbon 

The number of companies using an internal carbon price in their business plans has grown eight-fold in the last four years, according to CDP, a research firm.

However, CDP said it found that up to 800 companies might be vulnerable to the effects of carbon pricing regulation, as they disclosed that they were not using an internal carbon price. 

As of this year, over 40 national and 25 regional governments have put a price on carbon, the non-profit environmental disclosure platform said. This covered about 15% of global greenhouse emissions.

CDP’s research found that only 15% of companies using an internal carbon price to stress test their investments said they thought prices would rise in the future. This might concern some investors, CDP said.

Mark Lewis, head of European utilities equity research at Barclays, said: “The key question for investors should be: how can we know that companies are actually factoring environmental risk into their mainstream business strategies?

“Pricing carbon should play a vital role in helping companies do this – the price level, while important, is not the only key aspect. There needs to be more transparency as to how a company actually uses the price and whether it is seen as an important part of business decision-making and forecasting.”

Lewis is a member of the Task Force on Climate-related Financial Disclosures, the body created under the auspices of the Financial Stability Board on instruction from the G20. 

PRI’s US first, SDG arguments

Bloomberg has become the first US-domiciled corporate retirement plan sponsor to join the UN’s Principles for Responsible Investment (PRI).

It said one of the main reasons for joining the organisation was “to enable its employees to proactively integrate ESG-themed funds into their own retirement investment strategies”.

“This is really exciting – not many companies offer ESG-themed funds, as of yet, to their employees through their corporate retirement plans,” said Cathy Bolz, head of global benefits at Bloomberg.

“By signing, we are saying that we think the investment world has matured to the point where organisations like ours can think about integrating ESG issues into their investment policy considerations.”

In its capacity as a service provider, Bloomberg has been a PRI signatory since 2009.

Separately, the PRI and PwC have produced a report on why institutional investors should become more engaged with the UN’s Sustainable Development Goals (SDGs).

The report presents five overarching reasons for this, including that the SDGs represent the “most pressing environmental, social and economic issues and as such serve as a list of the material ESG factors that should be considered as part of an investor’s fiduciary duty”.

The report can be found here.

European Commission SDG ‘platform’

The European Commission has appointed 30 members to a new high-level multi-stakeholder platform to support and advise the Commission on delivering the SDGs at the EU level. Christian Thimann, who is chair of the High-Level Expert Group on Sustainable Finance, is one of the members of the SDG group. The other members can be found here

Candriam’s SRI investment academy

Candriam Investors Group has launched an online training platform for ”sustainable and responsible investing” (SRI). The Candriam Academy aims to raise awareness, promote education and improve knowledge of financial intermediaries on the topic of SRI.

Although conceived with intermediaries in mind, the platform is free and open to all. 

The academy has received accreditation by the Chartered Institute of Securities and Investment and is requesting further local accreditations. 

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