The European Infrastructure Bank (EIB), International Finance Corporation (IFC) and Singapore state investor Temasek have joined forces with LeapFrog Investments to back companies developing solutions with green benefits to consumers in emerging markets (EMs). Through the partnership, an initial US$500 million will be deployed to support the scaling green tools and technologies. Consumers in South Asia, Southeast Asia, and Africa could contribute as much as 73% of global emissions by 2030 without “smart development solutions” to benefit the environment. “Directing capital to development projects with climate benefits in these markets is essential to curbing this trajectory while fostering long-term and sustainable economic growth,” the organisations stated. The transition of EMs and developing economies could well be put at risk by US President Donald Trump’s controversial proposed tariff policy, which is set to most acutely effect Southeast Asian nations. “The world’s four billion consumers in emerging markets constitute half of the global population – they have every right to advance but, without green tools and technologies, their total emissions will blow through the world’s carbon budget,” said Andy Kuper, CEO and Founder of LeapFrog Investments. “This is also where the greatest opportunities lie — investing to support a generational transition for the majority of global consumers and producers.”
Sustainable Investor
News in Brief
French asset manager Mirova is asking the 600 largest listed firms in Europe to adopt international frameworks for nature reporting and to set science-based targets for contributing to nature restoration and conservation. Mirova, an affiliate of Natixis Investment Managers dedicated to sustainable investment, has written to all firms in the STOXX 600 index ahead of the 2025 AGM season. The firm said it wanted to encourage large companies to demonstrate ambition by utilising the reporting framework of the Taskforce on Nature-related Financial Disclosures and to report biodiversity as a material issue under the EU’s Corporate Sustainability Reporting Directive. Mirova also urged companies to fulfil their commitment to preserving natural ecosystems by setting science-based targets aligned with standards such as the Science-Based Targets for Nature. The campaign follows a similar one conducted last year, which focused on firms in France’s CAC-40 index. It is part of Mirova’s overall engagement strategy, which involves active dialogue with companies throughout the year, targeted action in high-impact sectors, and “ongoing participation in the development of the best frameworks”. According to Mirova, the vast majority of firms contacted in 2024 were able to demonstrate advanced approaches on nature and biodiversity. “Despite some disparity, the initiative fostered a constructive and promising dialogue, the results of which are expected to manifest progressively over the long term,” it said. “By expanding our engagement campaign to STOXX 600, we aim to strengthen our direct dialogue with the companies in our portfolio in a constructive manner to improve their consideration of biodiversity issues, which, like climate change, should be integrated into the core strategy of each company,” said Louise Schreiber, Head of Sustainable Development Research – Listed Assets.
Royal London Asset Management (RLAM) has announced that all eight funds making up its £11 billion (US$14.6 billion) sustainable suite will be aligned with the UK’s Sustainability Disclosure Requirements (SDR). The funds will adopt the ‘Sustainability Focus’ label, meaning that they will each be targeting specific social and environmental objectives and align with the Financial Conduct Authority’s recently introduced disclosure and marketing requirements. “Adopting the Sustainability Focus label provides reassurance to our clients regarding the high standards of sustainability practices embedded in our funds, which have also delivered award-winning investment performance,” said Mike Fox, RLAM’s Head of Equities. “We remain committed to ensuring clients benefit from our clear and consistent sustainability-driven approach to investing.” The eight funds include dedicated equity, fixed income and multi-asset funds. The suite includes Royal London’s Sustainable Leaders Trust, Global Sustainable Equity Fund and Sustainable Corporate Bond Trust. “Sustainable investing is about driving long-term value for our clients, the wider economy and society,” said Fox. “By actively investing in companies, we can encourage continuous improvement in their sustainability practices for the benefit of everyone.”
New guidance has encouraged members of the Net Zero Banking Alliance (NZBA) to support their clients’ efforts to reduce emissions. Updated recommendations for banks on climate target setting – issued by the United Nations Environment Programme Finance Initiative (UNEP FI) – introduced sections covering stakeholder engagement and the role of carbon credits for the first time. The guidance outlines key principles to underpin the setting of credible, robust, impactful and ambitious targets for achieving net zero greenhouse gas emissions goals in alignment with the Paris Agreement. The added section on stakeholder engagement emphasised the importance of banks supporting their clients in their efforts to reduce real economy emissions and calls on banks to assist policymakers in finding solutions to transition challenges. The other addition stated that carbon credits should not be used as a primary strategy to achieve emissions reductions but rather as a supplementary tool. Where they are used, carbon credits should always be additional and certified, and banks should conduct appropriate due diligence on client credit claims. First published in 2021, this is third version of the guidance, which will be reviewed at least every three years. The update also clarified that the ambition is to align with the Paris Agreement goals of limiting global warming to well below 2°C, striving for 1.5°C. It also expanded in scope to include specific sectors and activities. The NZBA recently voted in favour of changes to its framework following a series of high-profile exits, largely from US banks.
Most audit reports conducted for high-emissions companies do not provide sufficient clarity over whether and how auditors addressed the impacts of climate risk on financial statements, according to Carbon Tracker. The think tank’s assessment of the fiscal year 2022 financial statements of 140 firms in Climate Action 100+’s Net Zero Company Benchmark found that just four audit reports comprehensively discussed climate considerations, and/or commented on inconsistencies across the company’s reporting. Carbon Tracker said the audits that represented best practice were prepared by Deloitte for BP, KPMG for Rio Tinto, PwC for Rolls-Royce and EY for Shell. It suggested incumbency was a potential problem, calling for increased audit rotation to induce greater rigour. Carbon Tracker also found different practices across jurisdictions, noting that allowing local offices to make decisions on appropriate levels of disclosure was “sub-optimal for addressing global climate-related matters”. The firm’s third annual assessment said improvements in audit report transparency are not happening at scale or in line with the pace of the energy transition. “This can impact the value of the audit report for investors and overall trust in financial markets,” it added. Carbon Tracker called on regulators to undertake reviews of audit tenure rules and audit report disclosures to understand whether and how such rules may have impacted transparency on how auditors considered climate-related matters. It also encouraged investors to engage with audit committees and/or the auditors about the usefulness of audit reports, as well as ensuring their voting policies include considerations of, and potential responses to, excessively long audit firm tenures.
Pension funds have called on Equinor’s directors to justify plans to increase production in light of expectations from its majority shareholder that the oil and gas firm would operate in line with the Paris Agreement. A resolution filed by Sampension of Denmark and Sweden’s Folksam will be voted on by shareholders in Equinor – 71% owned by the state of Norway – at its 2025 AGM on 14 May. At the firm’s 2023 AGM, Norway’s Ministry of Trade, Industry and Fisheries said it expected Equinor to set targets and implement measures to reduce greenhouse gas emissions in line with the Paris Agreement. The resolution was co-filed by the Australasian Centre for Corporate Responsibility (ACCR), which also backed a campaign against the re-election of BP Chair Helge Lund – on grounds of a lack of consultation over weakened climate commitments – supported by almost a quarter of shareholders. Investors said they were also concerned about the inadequate returns generated by Equinor’s international oil and gas operations, which also conflict with Norway’s goals for the firm to deliver the highest possible returns over time in a sustainable manner. “This resolution draws attention to the fundamental inconsistencies between Norway’s expectations and Equinor’s oil and gas expansion plans,” said Emilie Westholm, Head of Responsible Investments and Corporate Governance at Folksam.”As a net zero investor, we hope this resolution will bring more clarity on Equinor transition work, including how it aims to achieve its long-term net zero target.” Earlier this year, UK-based asset manager Sarasin & Partners said it was divesting from Equinor after four years of encouraging the firm to accelerate its net zero transition plans.
A coalition of NGOs has issued a formal complaint with the European Ombudsman against the European Commission (EC) arguing that the development of its sustainable finance omnibus proposal was “undemocratic, untransparent and rushed”. The omnibus looks to reduce the sustainability reporting burden for companies by modifying the Corporate Sustainability Due Diligence Directive (CSDDD), the Corporate Sustainability Reporting Directive (CSRD), and the EU’s Taxonomy Regulation. The eight NGOs – namely ClientEarth, Anti-Slavery International, Clean Clothes Campaign, European Coalition for Corporate Justice, Friends of the Earth Europe, Global Witness, Notre Affaire À Tous and T&E – allege the omnibus seeks to “significantly water down” key EU sustainability laws. “We are contesting the Commission’s rushed dismantling of three key pillars of the Green Deal – including laws meant to improve the environmental and human impacts of global trade – a process that completely disregards people and nature’s rights,” the NGOs said in a statement. “The Omnibus proposal was made without any public consultation, sidelining civil society, with a lack of evidence or environmental and social impact assessments, and with a primary focus on narrow industry interests.” The organisations added that the “reckless move” both weakens sustainability rules and “damages public trust in the EU’s democratic foundations”. Investors, businesses, civil society organisations, lawyers, members of European Parliament and sustainable finance experts have also criticised the omnibus and the EC process surrounding it. Last week, the EU published the final legal text for the stop-the-clock mechanism approved by the European Council and Parliament earlier this month, delaying elements of the CSRD and CSDDD’s application. The council also shared its current draft position on the EC’s simplification proposals under the omnibus.
The UK government is consulting on the implementation of principles for voluntary carbon and nature market integrity, originally issued last November. The consultation invites views on the implementation of the six principles, taking account of their applicability in the context of the varying maturity of markets. It also aims to clarify expected standards for guiding supplier and buyer engagement in voluntary carbon and nature markets. The consultation invites responses on how these approaches could be reflected in guidance, policy and potentially regulation, supported by market architecture that could embed and scale high-integrity practice. The government said it was supportive of action to unlock high-integrity voluntary carbon and nature markets which enable the generation and trade of units or credits representing climate and broader environmental outcomes. The consultation proposes that standards developed by Voluntary Carbon Markets Integrity Initiative (VCMI) are adopted as best practice, for use by companies active in the market. “VCMs are essential for mobilising additional finance to address the climate crisis,” said Usha Rao-Monari, VCMI Steering Committee Chair and former Under Secretary-General of the UN. “By building on standards already set by VCMI, the UK is helping to provide the clarity and assurance businesses need to invest in high-quality carbon credits, deliver financial flows to support low carbon sustainable development in developing economies, and accelerate global progress towards net zero.” The consultation closes on 10 July.
Thailand’s Securities and Exchange Commission (SEC) is consulting on changes to rules governing sustainable and responsible investing (SRI) funds, aiming to enhance transparency, raise investment standards and eliminate greenwashing. The proposed reforms will introduce a new classification system for SRI funds, set stricter requirements on what companies qualify for investment, and compel asset managers to be more transparent about sustainability claims and fund performance. Under the new framework, SRI funds would be grouped into five distinct categories based on their sustainability objectives and the ESG characteristics of the businesses they invest in. The categories are SRI Focus, SRI Impact, SRI Improver, SRI Mixed Goals and SRI Promote. In a statement, the SEC said the move is designed to help investors make more informed decisions and bring Thailand’s regulatory framework closer to global best practices. Four of these categories share names with the UK’s Sustainability Disclosure Requirements. To reduce the risk of misleading sustainability claims, the SEC also plans to introduce minimum exclusion criteria for all SRI funds, barring investments in industries such as alcohol, tobacco, arms, pornography, and gambling. The consultation is open for feedback until 6 May.
The International Association of Insurance Supervisors (IAIS) has issued recommendations on the supervision of climate-related risks in the insurance sector. The paper noted the increasing impact of climate change, including extreme weather events, highlighting the subsequent need for a “resilient global insurance sector”, with supervisors able to effectively assess insurers’ management of such risks. The application paper has outlined good practices and guidance for supervisors across several areas, including the integration of climate-related risks into supervisory frameworks with respect to corporate governance, risk management and internal controls. In addition, the paper considers the impact of climate-related risks on valuation and investment practices, supervisory reporting, and climate-related scenario analysis. The IAIS pointed to its support for multi-party efforts to shore up resilience in the sector, including work addressing natural catastrophe protection gaps. The IAIS is a global standard-setting body looking to promote effective and globally consistent supervision of the insurance industry and contribute to global financial stability.
