The International Federation of Accountants (IFAC) has revised its professional training standards to incorporate sustainability reporting skills. The organisation said that this change is necessary so that professional accountants worldwide are properly equipped to implement sustainability-related disclosure and assurance standards, including those issued by the International Auditing and Assurance Standards Board, the International Ethics Standards Board for Accountants, and the International Sustainability Standards Board. “IFAC and our members work together to shape the future of the profession through learning, innovation, a collective voice, and a shared commitment to the public interest,” said Lee White, CEO at IFAC. Additionally, the IFAC has updated one of its educational standards – Initial Professional Development – Formal Assessment of Professional Competence – to include two new principles: integrity and authenticity. The principle of equity has also been incorporated into this standard, alongside enhanced guidance on hybrid and remote assessments. The IFAC connects professional accountancy organisations worldwide.
Sustainable Investor
News in Brief
Goldman Sachs Alternatives has created a dedicated private credit strategy for financing climate projects. The vehicle has already netted US$1 billion of institutional equity. “Sustainable solutions have emerged as a key thematic for many corporations, while innovation and scale are increasing the cost-effectiveness of many climate solutions, and policy considerations are creating unique market opportunities,” Goldman Sachs stated. The Climate Credit strategy will look to capitalise on a “significant opportunity” created by a scarcity of private debt capital coupled with increasing demand. Goldman Sachs also noted that given regulatory changes, tax incentives, and the maturation of climate transition industries, companies are increasingly seeking flexible debt capital to meet their financing needs. This new strategy is managed by the Private Credit business at Goldman Sachs Alternatives, which has invested in environment and climate solutions for almost two decades. “We see significant opportunities to address the supply-demand imbalance in private credit solutions related to climate transition,” said James Reynolds, Global Co-head of Private Credit at Goldman Sachs Alternatives. “Substantial capital has been raised for private equity investment in the space and debt solutions are needed to provide further scale. We look forward to partnering with leading companies and financial sponsors to deliver performance for our clients and are deeply appreciative of the support we have received so far from investors in this new strategy.”
European private debt investment firm Arcmont Asset Management has secured two mandates and launched a new impact lending strategy. The mandates – collectively totalling €475 million (US$520 million) – were awarded by pension asset manager APG and retirement and financial services provider TIAA. “The approach of this new strategy aligns nicely with our aim of being responsible stewards of our participants’ capital by seeking diversified, long-term performance while driving positive change,” said Wen-Fu Wu, TIAA’s Head of Fixed Income. Arcmont’s strategy involves providing debt financing to companies whose products and services aim to address environmental and social challenges across climate, health, education and sustainable economic growth. Arcmont will regularly report on impact KPIs for its investments. “At APG, we want to be at the forefront of impact investing,” said Menno van den Elsaker, APG’s Head of Alternative Credits. “Through this partnership, we can deliver attractive returns for [our clients], while contributing to their ambitious impact objectives.” The strategy has been developed in collaboration with Bridgespan Social Impact, an impact consultant, and is aligned with the Operating Principles for Impact Management. It has been independently verified by third-party verification firm BlueMark.
A review by the Singapore Exchange Regulation (SGX RegCo) and the National University Singapore Business School’s Centre for Governance and Sustainability has found that almost all listed issuers are including some sort of climate-related disclosures in their sustainability reports. According to the review, which examined 529 sustainability reports, as of 31 July 2024 97% of issuers included at least one disclosure aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, up from 73% in 2023. However, only 28% of issuers provided all 11 recommended disclosures under the TCFD framework. The research found that about 80% of issuers disclosed Scope 1 emissions, up from 50% in 2023 – while 87% disclosed Scope 2 emissions, up from 61% in 2023. Only 29% reported Scope 3 emissions, but this is almost double from the previous review. While 64% of companies with a market cap above SGD 1 billion (US$750 million) disclosed Scope 3 emissions, only 22% of small-cap firms did so. The review also found that disclosures on climate scenario analysis, risk management integration, and climate targets were the most lacking. While issuers have improved their reporting, gaps remain in achieving full compliance with the International Sustainability Standards Board standards, which SGX has committed to incorporating into its reporting framework. SGX RegCo has adopted a phased approach to mandatory climate reporting following its 2021 public consultation. Companies in the materials, buildings, and transportation sectors need to comply with full TCFD reporting from FY2024, while all other issuers must continue climate reporting on a “comply or explain” basis. Last September, SGX RegCo announced that Scope 1 and Scope 2 emissions reporting will be mandatory from FY2025. Scope 3 reporting remains voluntary for now, with larger issuers expected to begin reporting from FY2026.
ESG investment solutions provider Impact Cubed has been chosen by Japan’s Government Pension Investment Fund (GPIF) to support its integration of sustainability data into investment decision-making. The pension fund will leverage Impact Cubed’s ESG datasets, via data firm FactSet, which covers fund-level impact metrics, Sustainable Development Goal alignment scores, biodiversity and climate indicators, and sovereign-level ESG analytics. “Our approach to ESG data is based on modern portfolio theory and rooted in empirical sustainability research,” said Arleta Majoch, Chief Operating Officer at Impact Cubed. “We provide asset owners with tools that allow them to analyse sustainability factors with the same rigour as traditional investment factors – across all asset classes.” GPIF is the largest pension fund in the world, with ¥258.7 trillion (US$1.7 trillion) in assets. Last year, GPIF conducted research on further diversifying its asset mix to include illiquid assets such as forests, farmland, gold and bitcoin.
Sustainability tech firm Clarity AI has created an AI-powered tool to support institutional investors and asset managers in conducting sustainability-related research at pace. The solution provides an on-demand report generation feature, leveraging Clarity AI’s proprietary sustainability data and more than 200,000 company reports collected and curated in the firm’s platform. This functionality eliminates delays in the supply of updates from the need for third-party sources analysts by automating the process of gathering and analysing sustainability data. “Analysts and portfolio managers rely on fragmented data, outdated third-party reports, and time-intensive manual processes that fail to keep up with fast-changing demands, making traditional ESG research obsolete,” Clarity AI stated. The new solution offers automatically generated company briefs and an AI aAssistant that provides real-time, factual insights across key sustainability dimensions, such as company policies, climate transition plans, ESG risks, and corporate controversies. “This launch marks a turning point in the industry – AI is no longer just an add-on but a core driver of smarter, faster, and more strategic investment decisions,” said Ángel Agudo, Chief Product Officer at Clarity AI. “From the very beginning, our mission has been to equip decision-makers with the tools to integrate sustainability on their own terms. Now, we are breaking the reliance on outdated, subjective analysis and replacing it with something dynamic, customized, and unbiased, built for today’s investors.”
Reducing methane offers one of the most “impactful and immediate opportunities” for companies in the food sector that want to deliver long-term business value, says research from investor network Ceres. In a new report, the organisation said that methane emissions from cattle and other animals represent a “substantial proportion of total emissions” for food companies sourcing meat and dairy products. It also noted that food retailers, including grocery and convenience stores, are on the high end of the exposure spectrum compared to other sub-industries. The assessment of restaurants is more mixed. For restaurants with more diverse menus, livestock will be a smaller proportion of total emissions but still impactful. Methane is an extremely potent greenhouse gas, with a global warming potential more than 80 times greater than carbon dioxide. However, it also has a far shorter lifespan in the atmosphere. “This means that reducing methane emissions could deliver rapid benefits – eliminating methane emissions today would create a cooling effect within 12 years, while similar short-term reductions in carbon dioxide wouldn’t affect temperatures for centuries,” said the report.
Taxonomy-aligned capital expenditures (capex) from large listed European companies grew by a third in 2023, reaching €250 billion (US$271 billion) by year end, according to a new report from the Platform on Sustainable Finance (PSF). Half of this was directed toward enabling activities, while transitional activities accounted for 11% of the total (double the previous year). According to the report, debt financing remains the dominant source of sustainable investment flows, with green European bond issuance exceeding €200 billion every year since 2021. Outstanding green loans stood at €908 billion in 2023 while green bond volumes reached €781 billion. Total outstanding green debt finance at the end of 2023 was €1.7 trillion. Nonetheless, the PSF says there is still a significant investment gap, requiring at least 7-8% of GDP annually to be directed toward green investments if 2030 and 2040 climate targets are to be met. The largest gaps remain in industrial decarbonisation, energy supply, and building renovations, says the PSF.
The US’ decision to drop its funding commitments to emerging markets via Just Energy Transition Partnerships (JETP) is unlikely to have a long-term impact, according to research by BMI, a Fitch Solutions company. The US has played a pivotal part as a significant financier and co-leader of JETPs to date, including the partnership for Indonesia (where it was contributing 18% of total public spending) and South Africa (where it was contributing 11% of the US$13.8 billion funding pledge). The US decision to drop these commitments has been made following President Donald Trump’s decision to slash foreign aid. As such, these markets will need to find alternative sources to support their energy transitions. “Although we expect the loss of US funding in the JETP partnerships to be disruptive and potentially add further delays to these programmes, we see other international partners stepping up to fill the void and ensure the continuity of the JETPs,” the report said. Germany has confirmed it will take on the co-leadership role with Japan for Indonesia’s partnership, while France and the rest of the EU have also launched the Indonesia Energy Transition Facility, committing an additional €14.7 million (US$15.9 million) to accelerate the JETP process. “South Africa’s energy transition under the JETP is expected to press forward, with a focus on maintaining momentum through alternative funding sources and strategic partnerships,” the report added. Other international partners, including the UK, will continue to provide financial backing.
Recycling systems in South Korea could offer a flight path for the country to become a leader on producing sustainable aviation fuels (SAFs), from says the Institute for Energy Economics and Financial Analysis (IEEFA). The institute stated that South Korea has “one of the world’s best waste recycling systems”, a strength that it could leverage to become a frontrunner in SAF production. The International Air Transport Association has forecast that 449 billion litres of SAF will be needed by 2050 to achieve net zero emissions in the aviation sector, while the International Renewable Energy Agency’s 1.5°C Scenario projects that bioenergy, including SAF, will account for more than 18% of the total final energy consumption by 2050. South Korea has expedited various SAF-related projects and policies since implementing a mandate in August 2024, which requires a 1% SAF blending starting in 2027. The South Korean government is in the process of designating SAF as a ‘national strategic technology’. It has launched a taskforce to develop a roadmap for mandatory SAF blending and plans to establish an experiment centre by 2031. “Widespread SAF adoption requires strong governance to balance sustainable feedstock use, environmental impact, and economic equity,” IEEFA stated. “Leveraging its strategic initiatives, waste recycling expertise, and leadership in the jet fuel market, South Korea is well-positioned to develop a domestic SAF industry and accelerate the transition toward a greener aviation future.”
