Stockholm (NordSIP) – The G-20 climate talks last week yielded a detailed ‘G-19’ climate and energy action plan imposing long-term climate protection provisions on member states (except the U.S.) and mandating sustainable development aid and infrastructure investment (Der Spiegel), despite ending on a somewhat acrimonious note, with U.S. President Donald Trump preferring to spend time with Vladimir Putin than attend the climate session. On that note, the U.S. withdrawal from the Paris Climate Accord should be seen as a ‘gift’, according to several pension fund RI experts at the Global Future of Retirement conference in New York last month (Pensions & Investments). Trump’s decision has apparently resulted in an immediate uptick in terms of inflow into low-carbon funds. “The President’s decision was not popular and has stirred a debate,” said Cindy Rose, head of RI stewardship at Aberdeen Investment Management. For his rather more enlightened part, French President Emmanuel Macron announced plans to host a climate conference on the two-year anniversary of the Paris Agreement (Politico.eu).
The G-20 continues to be somewhat Janus-faced on sustainability, however (Sierra Club): According to Talk Is Cheap: How G20 Governments Are Financing Climate Disaster, the new report from the WWF European Policy Office, the Sierra Club, Oil Change International and Friends of the Earth U.S., G-20 countries continue to provide $71.8 billion in public finance to support overseas fossil fuels. Corporate handouts include sweetheart loans, guarantees, and other forms of preferential financing, with G-20 governments providing nearly four times more public finance for fossil fuels than for clean energy, the report finds. In other, more positive report news, the High Level Expert Group on Sustainable Finance (HLEG) established by the European Commission in 2016, which has the objective of developing an overarching sustainable finance strategy for the EU, published its first interim report, entitled “Financing a Sustainable European Economy”, showcasing the results of the group’s first six months of intensive work (EuroSIF).
Meanwhile, banks worth a combined $7 trillion, including Barclays, Citi and UBS, have committed to develop analytical tools to strengthen assessments of climate-related risks and opportunities in conjunction with the UN Environment Programme Finance Initiative (UNEP FI). The cooperation is designed to encourage other banks worldwide to adopt similar methods. Elsewhere, the PRI issued an ESG integration Roadmap for Germany, finding that the country actually lags behind its neighbours in terms of ESG integration.
In an otherwise slow week in the Nordics due to the holiday season being in full swing (for everyone except NordSIP employees), the Swedish Fund Index (SFEI) found sustainable investment to be on the rise among the country’s funds, development financier Swedfund invested $10 million in Berkeley Energy’s Renewable Energy Asia Fund II, and Apple launched a renewable energy data centre in Denmark (NordSIP). Elsewhere, Kathryn McDonald has been appointed to the newly created position of head of sustainable investing at AXA IM Rosenberg Equities as part of the company’s drive to integrate ESG across all its portfolios by the end of 2017 (Investment & Pensions Europe). McDonald has held several high-level positions within AXA IM Rosenberg Equities, most recently as director of investment strategy since 2014. In a refreshingly irreverent turn, Craig Bonthron, co-manager of the Kames Global Sustainable Equity Fund, asks when it will become socially unacceptable to drive SUV’s in an interesting article (readymag.com), while Bonthron also makes the case against the supine ideology employed by thematic funds.
Finally, we leave you this week with this interesting research list from TruValue Labs as to why ESG investing just works (Thomson Reuters).
Wishing you a happy weekend,
Your NordSIP team