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Sharon Kimathi Energy and ESG Editor, Reuters Digital sharon.kimathi@thomsonreuters.com
Hello! Companies and investors are complaining that there are far too many different sustainability rules and they are pleading with regulators to harmonize environmental, social and corporate governance (ESG) standards. They'd like to see a single set of mandatory disclosure rules. Their plea comes as the Basel Committee on Banking Supervision and U.N.-backed campaigners seek to boost the minimum standards for companies pledging to cut greenhouse gas emissions.
The We Mean Business coalition of 7,000 global companies wants regulators https://www.reuters.com/business/sustainable-business/overlapping-rules-curb-greenwashing-may-only-add-company-frustration-2022-06-16 to unify their definitions, terminology and concepts before finalizing the rules later this year, and not in the months and years ahead.
While investors and companies want a single set of mandatory disclosures to aid comparison between firms and keep down reporting costs, three draft sets of disclosure rules are currently out for public consultation from the European Union, the U.S. Securities and Exchange Commission, and a new G20-backed International Sustainability Standards Board (ISSB). https://www.reuters.com/business/sustainable-business/new-company-sustainability-standards-body-drafts-first-guidelines-2022-03-31
Mark Spiers, partner at regulatory consultants Bovill, said the different speeds at which the three standards are being written creates challenges for international companies. "There are so many jurisdictional specific regimes and trying to satisfy all of them will be a Herculean task," he said.
Meanwhile, the Basel Committee, made up of regulators from the United States, Europe, Japan, China and elsewhere, https://www.reuters.com/business/sustainable-business/global-regulators-set-out-climate-checklist-banks-2022-06-15 published a detailed checklist for banks to assess how climate change affects all aspects of their business, including pay and capital, as economies set carbon reduction targets.
International banks like Goldman Sachs, Deutsche Bank and HSBC will be expected to look at how risks from climate change affect their business strategy, training of senior staff and board members, internal controls, capital and pay over the short, medium and longer term, the guidance showed. It represents the Basel Committee's latest effort to review how its rulebook covers climate change in a sector at the forefront of efforts to transition to a net-zero economy.
While the Basel Committee's updated guidance targets the banking industry, the 'Race to Zero' campaign https://www.reuters.com/business/sustainable-business/un-campaign-sets-out-tougher-standards-company-net-zero-plans-2022-06-14backed by the U.N. to drive faster climate action, is toughening the minimum standards for companies pledging to cut greenhouse gas emissions, including a requirement for businesses, banks, insurers and asset managers, to curb new fossil fuel projects.
Members would also, for the first time, be required to align their lobbying and advocacy activities with net-zero by "proactively supporting" climate policies at the sub-national and national level "consistent with the Race to Zero criteria".
Talking Points
ESG Lens
Even if Europe can fill its gas storage, Europe faces a perilous winter https://www.reuters.com/business/energy/europe-fills-up-gas-race-replace-russia-far-over-2022-06-14and governments will need to keep rationing plans to hand as they race to secure more liquefied natural gas (LNG) to keep pace with a rapid shift away from reliance on Russian fuel. For European households, meanwhile, there is little respite from sky-high fuel prices that have strained budgets, driven down disposable income and weighed on the economic outlook.
ESG Movers and Shakers AXA Investment Managers, the investment arm for global insurance firm Axa, has hired Charles Fianko as a portfolio manager, and Monique Carter as a solutions strategist.
Fianka joins from Lloyds of London, where he was also a member of the Climate Change Investment Committee and brings experience in tailoring corporate strategy to deal with climate change risks within investment holdings. Carter joins from global asset manager Insight Investment, where she worked on the portfolio solutions team, designing and tailoring sustainable and cashflow driven investments (CDI).
Global advisory, broking, and solutions company WTW has hired Nicki Tilney and George Nassaouati to its natural resources and construction lines of business within the Asia corporate risk & broking business.
Tilney will join WTW as head of construction, power & renewables in Asia. This is a new role created to better align the key needs within the construction, power and renewable energy sectors. She joins WTW from British multinational professional services firm Aon where she was the head of construction, power and infrastructure in Asia. Nassaouati, who currently heads WTW's natural resources in Asia, will be appointed as head of energy Asia.
Global outsourced investment office, Partners Capital Investment Group, has appointed Christoph Günther and Dr. Michael Viehs as head of public equities and global head of sustainable investing, respectively. Prior to joining the firm, Günther was an executive director at Goldman Sachs Asset Management, in the alternative investments and manager selection group. Viehs joins Partners Capital from Federated Hermes Limited, where he was head of ESG integration.
Quote of the Day "There is still a lack of disclosure in the market across all kinds of metrics. Even metrics as important as CO2 emissions that are now enforced by the regulators to be reported by companies. Only about 8000 or 9000 companies of all listed companies are reporting that information. So, it's also important not just to process all the information that we might find, but also estimate and give the information that we don't find in the market." Rebeca Minguela, CEO and founder at U.S.-based sustainability tech platform Clarity AI Looking Ahead
Coral bleaching has struck many reefs around the world, including Australia's Great Barrier Reef, which was hit by four mass bleaching events in the past seven years.
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