The US Sustainable Investment Forum (SIF) has elected a new Board Chair and seven directors for its 2025-2027 term. US SIF has selected Stephanie Cohn Rupp, CEO of Veris Wealth Partners, as its chair, having served as a board member since 2021. She has more than two decades of global impact investing experience and succeeds Diederik Timmer, who served as US SIF’s board chair for seven years. Cohn Rupp is joined by seven new directors, who will guide the organisation’s strategic direction. This includes Nelle Coady Joubert, a Managing Director at MSCI who oversees a team of sustainability and climate relationship and product focused solutions specialists, Leslie Samuelrich, President of Green Century Funds, global investment firm Calvert Impact CFO Derek Strocher, and former US Securities and Exchange lawyer Beth-ann Roth. Kimberly Gluck, Managing Director at Boston Trust Walden, has also been re-elected to the board for the third time. “Our seven new board members and returning directors will help us build on the legacy of our organisation and support the shift to a more resilient economy,” said Maria Lettini, CEO of US SIF. “They bring a wealth of experience on sustainable and impact investing as well as deep financial acumen — all of which support our strategic plan and vision. This is an exciting time for the sustainable investing industry, and I am delighted to work alongside pre-eminent leaders in the field to deliver on our ambitious aims for the coming years.”
Sustainable Investor
News in Brief
UK-based wealth manager Cazenove Capital intends to adopt the Financial Conduct Authority’s (FCA) Sustainability Disclosure Requirements (SDR) labels across three sustainable funds. The funds – which collectively manage more than £3 billion (US$3.7 billion) of assets – will all use the ‘Sustainability Focus’ label. Two of the funds – the SUTL Cazenove Sustainable Growth Fund and the SUTL Cazenove Sustainable Balanced Fund – serve private clients, while the third – the SUTL Cazenove Charity Sustainable Multi-Asset Fund – is available to charities. The ‘Sustainability Focus’ label requires a minimum of 70% of the assets within the fund to contribute to a sustainability objective, and no assets can be held that conflict with the sustainability objective. Parent company Schroders announced plans to adopt SDR labels for ten funds in December, with eight adopting the ‘Sustainability Focus’ label and two targeting the ‘Sustainability Impact’ label. The Cazenove announcement takes the group’s total to 16. “We believe that our planned early adoption of SDR labels reflects the integrity and robustness of our sustainable and impact investment approach,” said Anna O’Donoghue, Global Head of Product Development and Governance at Schroders. “The labels will help to differentiate our sustainable product range, making it easier for clients who are seeking sustainable outcomes to identify opportunities to invest. We are appreciative of the FCA’s ongoing collaboration and we continue to liaise closely with them as we work through the regulatory process across other relevant Schroders funds.” Cazenove Capital serves private individuals, family offices, trusts, institutions and charities. Schroders Wealth Management, including Cazenove Capital, has £121.3 billion in AUM globally.
Market data and technology solutions provider S&P Global has picked Lauren Smart as Head of Sustainable1, the firm’s sustainability-focused unit. The move comes ahead of the integration of S&P Global Sustainable1 with S&P Global Commodity Insights to form an expanded energy transition and sustainability business. Smart has been with S&P Global since its 2016 acquisition of climate analytics company Trucost, and was part of core start up leadership team which created the Sustainable1 business in 2020. She replaces Richard Mattison, who left Global Sustainable1 in October for the role of Head of Climate and ESG at data provider MSCI. Smart was most recently Chief Commercial and Market Engagement Officer at S&P Global Sustainable1, a role she held from 2021, and was previously Global Head of ESG Commercial for two years. She spent more than 11-and-a-half years at Trucost and was an Executive Director and Member of the Board when the company was sold. “As the sustainability market grows and evolves, so does the sophistication of our clients’ needs,” said Smart. “Alongside our longstanding work on climate, nature, and sustainability, the newly integrated business will support clients end to end throughout their sustainability journey; from risk management and reporting to industrial decarbonisation and identifying the opportunities to finance a more sustainable future.”
The Autorité des Marchés Financiers (AMF), the French securities commission, has updated its policy on fund names in line with EU-wide guidelines. Rules on the names of funds using ESG-related terms were introduced and finalised by the European Securities and Markets Authority (ESMA) last year to limit greenwashing across member states. As such, the AMF has amended position-recommendation 2020-03, which sets out minimum standards for France-domiciled funds to communicate the consideration of non-financial criteria in their names and attached documentation and marketing materials. Its previous criteria have been fully replaced by those set out in the ESMA guidelines and extended to all collective investment undertakings – including funds reserved for professional clients. For example, the changes allow market participants wishing to communicate centrally on non-financial criteria to count fossil fuel exclusions resulting from the ESMA guidelines as part of the 20% investment universe reduction rate for funds applying such exclusions. The changes are immediately applicable.
David Kennedy, formerly chief executive of the UK’s Climate Change Committee (CCC), will become the new CEO of the Science Based Targets initiative (SBTi) in the second quarter of this year. Kennedy, currently a Partner at ‘big four’ accounting firm EY, will succeed Sue Jenny Ehr, who has served as interim CEO since the departure of Luiz Amaral last July. Amaral stepped down following controversy over plans to allow use of carbon credits to offset Scope 3 greenhouse gas emissions (GHG) under the SBTI’s Corporate Net Zero Standard (CNZS). “I am excited at the prospect of working with the team and partners to advance the mission of the SBTi and deliver even more change at scale, supporting business to make its contribution to the global climate objective in the next crucial period,” said Kennedy, also previously Director General of Food, Biosecurity and Trade at the UK’s Department for Environment, Food and Rural Affairs. According to a statement, Kennedy joins the SBTi as it “evolves to support a wider range of companies around the world, ensuring it has the appropriate structures and technical capacity to deliver its ambitious workplan”. The SBTi develops standards, tools and guidance to help companies and financial institutions to set GHG emissions reduction targets in line with climate science and the goals of the Paris Agreement. Around 40% of global companies by market capitalisation have validated SBTi targets or commitments to set targets. First released in 2021, the SBTi intends to launch a consultation on its CNZS update this year, ahead of final release in early 2026. It consulted on an update to its Financial Institutions Net Zero standard last year, which is expected to be finalised this year. Kennedy was chief executive of the CCC from its foundation as an independent advisor to the UK and devolved governments, via the 2008 Climate Change Act, until 2014. Ehr, previously SBTI’s chief legal officer, will stay on for a period to help provide a smooth transition. The SBTi was founded by the UN Global Compact, the We Mean Business Coalition, the World Resources Institute and the World Wide Fund for Nature.
China’s financial authorities have jointly released finalised standards outlining general sustainability disclosure requirements for companies. The ‘Sustainability Disclosure Standards for Enterprises — Basic Standards’ are designed to align with IFRS S1, seeking to promote disclosures of information on risks, opportunities and impacts related to sustainability issues in the environment, society and governance. Formally issued by the International Sustainability Standards Board in June 2023, IFRS S1 sets out the requirements for disclosing information about an entity’s sustainability-related risks and opportunities. This includes governance processes used to monitor, manage and oversee sustainability-related risks and opportunities, as well as strategies for managing such risks and opportunities. The standards were proposed in May as part of establishing a national unified standards system for sustainability disclosures by 2030. Under the basic standards, disclosure should comply with the principle of materiality. This means enterprises must conduct materiality assessments to evaluate whether sustainability risk and opportunity information would reasonably affect the decision-making of basic users such as investors and creditors. They also need to consider the scale, scope, and irreparability of potential negative impacts, and the scale, scope, and likelihood of potential positive impacts. Like IFRS S1, the disclosure elements in China’s basic standards include governance, strategy, risk and opportunity management, and metrics and targets. The final version of the standards adds ‘scenario analysis’ as an assessment method enterprises should consider when evaluating the resilience of corporate strategies and business models to sustainability risks. It also expands the definition of ‘value chain’ to cover the entire life cycle of an enterprise’s products or services, along with the interactions, resources and relationships related to its business model and its external environment. The basic standards will initially be implemented by enterprises on a voluntary basis.
Global business and financial information provider Bloomberg has bought voluntary carbon markets (VCM) data and analytics firm Viridios AI from its parent company. The transaction covers Viridios AI’s database of voluntary carbon credit projects, its pricing and valuation analytics, and several members of staff. This will include Viridios AI CEO Bertrand Le Nezet, according to Carbon Herald. The deal increases the carbon markets data and analytics available to Bloomberg customers. “This agreement with Bloomberg is the culmination of five years of innovative data science, research and analysis by the team at Viridios AI and I would like to acknowledge everyone in the team who has worked to build such a unique and powerful carbon market dataset,” said Eddie Listorti, CEO of Viridios, a global carbon credit origination, climate services and asset management business. “We welcome the voluntary carbon credit data, analytics and expertise that Viridios has transferred to Bloomberg, and we look forward to the valuable ways our new colleagues will contribute to Bloomberg’s expansion of offerings in the carbon markets space,” said Emilie Gallagher, Global Head of Commodities, FX and Macro Product at Bloomberg. “Our goal is to maintain innovation and provide our customers with the quality data and insights they need to navigate these rapidly evolving markets.” Global data provider MSCI acquired UK-based carbon markets intelligence specialist Trove Research in October 2023, rebranding it MSCI Carbon Markets.
The Investor Forum, a stewardship-focused not-for-profit organisation created by institutional investors in UK equities, has appointed seven directors to its board. The new board members include Valeria Piani, Phoenix Group’s Head of Stewardship, Kimberley Lewis, Head of Active Ownership at Schroders, and Matthew Brazier, Head of Investment Advisory at Invesco. IFM Investors’ Chief Strategy Officer Luba Nikulina and Chantal Waight, Managing Director at European savings and retirement services group Athora, have stepped down from the board having served for five and four years respectively. Waight headed the forum’s operating oversight committee, and will be replaced by Andrew Millington, Global Head of Equity Research and Investment Process at abrdn. Following these changes, directors from the forum’s member firms make up 65% of board members, meeting a commitment made at the 2024 AGM. “Our call for nominations from amongst the member base resulted in some excellent candidates being put forward who bring diverse professional backgrounds and experience,” said Michael McLintock, Chair of the Investor Forum. “Whilst this increases the size of the board back to the historic high levels, we believe it is important to have this level of involvement from members, both as a desirable objective in itself and as we look to develop new activities and maintain oversight of the forum.” As of July 2024, the forum had 51 full members, representing approximately 23% of the FTSE All Share market capitalisation.
Three major US banks have departed the Net Zero Banking Alliance (NZBA), with Morgan Stanley joining co-founders Citi and Bank of America in deciding to quit the coalition. All three banks confirmed their intention to continue to work toward net zero goals. Morgan Stanley said it would “contribute to real-economy decarbonisation by providing our clients with the advice and capital required to transform business models and reduce carbon intensity”, adding that it would still report progress on 2030 emissions reduction targets. The statement follows earlier announcements by Citi and Bank of America. Wells Fargo and Goldman Sachs both confirmed their departures from the alliance in early December. The NZBA, formed in 2021 to provide guidance and support to banks in reducing portfolios emissions to net zero by 2050, is one of several sub-sector alliances operating under the umbrella of the UN-backed Glasgow Financial Alliance for Net Zero (GFANZ). The announcements from leading US banks follow legal proceedings against a number of finance sector firms on anti-trust grounds relating to climate-related investment decisions and products, as well as political pressures on other climate-focused finance sector initiatives, including the Net Zero Insurance Alliance and Climate Action 100+. NZBA, which has around 140 members across 44 countries, released a progress update in October, hailing “significant steps” toward climate goals, but other analyses have described actions by leading institutions, including US banks, as “insufficient”. GFANZ recently updated its terms to enable the participation of any finance sector firm supporting the energy transition, as part plans to “redouble its efforts” to mobilise private capital “in 2025 and beyond”. Both Citi and Bank of America will continue to be members of the GFANZ Principals Group.
The EU Platform on Sustainable Finance (PSF) has outlined a three-tier categorisation scheme in response to the European Commission’s (EC) review of the Sustainable Finance Disclosure Regulation (SFDR). The PSF, which advises the EC on sustainable finance, called for a “smooth transition” from the existing disclosure regime, factoring in the impact on existing offerings, as well as the sustainability preferences of investors investing in such products. The proposed scheme would include three strategies: sustainable; transition; and ESG collection, with all other products identified as “unclassified”. SFDR has been under review since a consultation conducted the EC found no clear market preference between formalising Article 8 and 9 as product categories or moving to new criteria more closely aligned with the UK’s Sustainability Disclosure Requirements fund labels. Under the PSF proposal, sustainable strategies would include EU Taxonomy-aligned investments or sustainable investments with no significant harmful activities, while transition strategies would support the transition to net zero and a sustainable economy, avoiding carbon lock-ins, in line with EC recommendations. ESG collection strategies would exclude significantly harmful activities, investing in assets with better environmental and/or social criteria or applying various sustainability features. The PSF said the scheme was focused on linking financial products to client perspectives, allowing for differentiation between products that can “largely be considered sustainable through their solutions or practices”. Earlier this month, Mathilde Loussert, Policy Officer at DG FISMA, the EC body for financial stability, financial services and the Capital Markets Union, confirmed it is developing new policy proposals. Separately, the PSF proposed two voluntary transition benchmark labels – with and without exclusions – to highlight use of the EU taxonomy in shaping climate and environmental benchmarks as well as in transition finance.
