The International Organization of Securities Commissions (IOSCO) has announced the principal themes that will feature during the eighth edition of World Investor Week (WIW) – with sustainable finance being one of them. Other key themes will include technology and digital finance, as well as cryptoassets, while complementary discussions and workshops on fraud and scam prevention, investor resilience, and the basics of investing, will also be hosted. WIW is a week-long global campaign to raise awareness on the importance of investor education and protection, highlighting various initiatives in these areas and aiming to strengthen collaboration among IOSCO members. Launching on 7 October this year, the event will target two primary objectives: disseminating key messages that support investor education, protection and financial literacy; and fostering learning opportunities for investors. Organisations representing more than 100 jurisdictions are due to attend this year’s event. “The principal themes we have identified this year result from extensive engagement with [our] members and unanimously reflect the most urgent issues facing investors today,” said Pasquale Munafò, Senior Officer at the Commissione Nazionale per le Società e la Borsa – the public authority responsible for regulating Italian financial markets – and Chair of IOSCO’s Committee 8. “By placing the spotlight on these critical areas, we aim to empower and protect investors worldwide, providing them with the knowledge and tools needed to navigate an increasingly complex financial landscape.”

Specialist independent investment manager Redwheel will be acquiring the assets of Ecofin, a specialist investor in sustainable infrastructure and environmental solutions, which has US$1.4 billion in AUM. It is hoped that the Ecofin team will bring in its experience of investing in companies enabling systemic decarbonisation of the economy. “Their expertise is complementary to our existing thematic sustainability capabilities and is aligned with our overall focus on fundamental, long-term specialist investment strategies,” said Redwheel CEO Tord Stallvik. In turn, Ecofin will benefit from Redwheel’s sustainability ecosystem Greenwheel, which powers the firm’s enhanced integration, transition and sustainable funds. “Ecofin’s extensive knowledge will broaden Greenwheel’s reach,” said Stallvik. “We are pleased that the team recognises the benefits of the long-term alignment that Redwheel offers.” The transaction is expected to close in Q3 2024. The financial terms have not yet been disclosed.

Investments ranging from US$160 billion to US$200 billion will be required each year to fund India’s energy transition, according to French asset manager Amundi. The funding is equivalent to around 5% of the country’s GDP, and is necessary if India is to meet its targets of reducing emissions intensity by 45% by 2030, and reaching net zero by 2070. Despite increased budgetary allocations and efforts to establish a green bonds market, substantial policy actions are needed to attract private – especially international – capital, Amundi said. India is the third largest greenhouse gas-emitting country on the planet, and its emissions continue to rise. It is highly dependent on coal for electricity generation and power, and its demand for the most polluting fuel is not expected to peak until 2030 to 2035. Although creating a just transition that ensures minimal social impact is a particular challenge for the country, Amundi said there were hopeful signs. For instance, stricter disclosure standards introduced by the Securities and Exchange Board of India (SEBI) should bring companies more in line with global investors’ expectations. India is Asia’s second largest emerging market for green bonds, with issuances representing the equivalent of $25 billion as of December 2023. Some reforms have already resulted in a rise in private equity investment, while changes to make foreign investment simpler and more tax-efficient, including the Gujarat International Finance Tec-City (GIFT City), have shown promising signs, Amundi found. The report called for more collaboration between the public and private sectors.

The Science Based Target Network has updated its guidance for corporate nature targets. It laid out five steps corporates should take to align their approach to nature with science – assess, prioritise, set targets, act and track – providing guidance for each of them. The first step involves gaining an understanding of a company’s impact on nature, including through transformation of land, extraction of resources, and release of harmful emissions. The second step consists in deciding where a company’s activities have the most adverse impact on nature, and where those impacts can most effectively be mitigated. In the third step, targets are set and validated by the SBTN. The final two steps involve implementing and reporting on the targets. The latest guidance provided methodology for land and freshwater targets, both of which integrate biodiversity. Ocean targets will be made available in 2025, the SBTN said, while climate targets have been dealt with separately in the affiliated Science Based Targets initiative (SBTi). “By setting science-based targets for nature with [the] SBTN, companies can meet the requirements of disclosure frameworks such as CDP, GRI, TCFD and TNFD (in development), and demonstrate to the investor community that their company is working towards addressing and managing their impacts and dependencies on nature,” the group said.

Real estate software-as-a-service provider BuildingMinds has released a whitepaper penned by the Global Real Estate Sustainability Benchmark (GRESB), examining how asset-level data can drive sustainability performance and investment decisions in the sector. The paper looks to support real estate investors and managers in their evaluation of ESG initiatives. Key findings included aggregated portfolio data not being sufficient for meaningful decarbonisation; and the choice of interventions and assets they are applied to having a significant impact on the achievement of long-term decarbonisation goals. BuildingMinds also found brown-to-green investment strategies had a more significant impact on reducing energy consumption, compared to improving assets that are already green. “Fund managers looking for comprehensive insights into their real estate portfolios understand the critical role asset-level performance data and benchmarks play in driving decision-making,” said GRESB CEO Sebastien Roussotte. “We are pleased to collaborate with BuildingsMinds to share perspectives on how managers can approach their portfolios to optimise individual assets and drive positive outcomes, both financially and environmentally.” Earlier this week, GRESB’s Asset Impact team launched Transition Analytics – a specialised product designed for asset owners and managers to better manage transition risk, engage their portfolio companies with detailed insights, and meet their varied environmental commitments and reporting requirements. The tool offers users an emissions and activity database for 11 of the most emissions-intensive sectors – linking more than 148,000 physical assets to 3,000 listed companies with ownership stakes in those, along with their 32,000 listed and private subsidiaries.

The economic impact of climate change is steadily climbing up the list of concerns among central bankers, according to UBS’s Annual Reserve Manager Survey 2024. The survey of 40 central banks, managing around half of the world’s foreign exchange reserves, found 16% consider climate change one of the “main risks” facing the global economy. While climate came behind issues like war, inflation, economic volatility, surging government debt, and energy security, the 16% figure represents a sharp increase on previous years. In the same survey last year, just 8% of respondents listed climate change as a main concern. And back in 2019 – a year when climate peaked as a public and political concern, with mass protests globally and the launch of the EU Green Deal – not a single central banker had named the issue as a main economic risk. This year, the top concern among central bankers (87%) by far was further escalation of geopolitical conflict, including between China and the US, and in Russia and the Middle East. In addition, 71% of respondents cited inflation or rise in long-term yields as key concerns, and 50% mentioned economic volatility. Asked which financial assets they planned to increase exposure to, green bonds topped the list, with 57% of respondents saying planning to buy more of these instruments. Meanwhile, the supposed ESG backlash in the US does not seem to have registered among central bankers. This year, 47% said they had updated or were considering updating their benchmarks to include ESG factors, up from 27% last year.

Over 90% of oil and gas companies globally do not report Scope 3 emissions from their investments, leading to discrepancies in calculating portfolio carbon footprints. New research from global sustainability tech platform Clarity AI based on analysis of environmental platform CDP’s 2023 climate change questionnaire revealed that while all publicly traded oil and gas companies listed in the MSCI All Country World Index (ACWI) report Scope 1 and Scope 2 greenhouse gas (GHG) emissions from their investments, only 9% report on Scope 3. The study found the same pattern among the top 20 companies in the industry, with only one currently reporting emissions from assets it has a stake in but does not control. If missing investment emissions were accounted for, a portfolio consisting of investments in those top 20 companies would have a 24% higher carbon footprint – a significant discrepancy in overall carbon impact, Clarity AI argued. Seven of the 20 companies would also fall in GHG emissions intensity rankings – with one company tumbling six places, from ninth to 15th. “While reporting and disclosure remain a foremost priority for organisations throughout the business world, data quality, transparency, and completeness continue to be a noticeable problem area for businesses and regulators alike,” said Patricia Pina, Head of Product Research and Innovation at Clarity AI. “This is particularly true within the oil and gas industry as it relates to Scope 3 emissions, whereby reporting and data gaps lead to chronic underreporting of portfolio carbon footprints and provide a distorted view of how companies compare on carbon intensity.” The report examined and quantified GHG emissions from all physical owned by the companies – including minority investments – as well as key reporting and disclosure trends, leveraging data from non-profit Climate TRACE. “The impacts of not reporting investment Scope 3 data are incredibly stark and underline the importance of having a comprehensive and transparent view of an organisation’s emissions footprint,” said Pina.

New research from accountancy firm RSM UK has found that almost a third of mid-market companies don’t have a formal sustainability-focused strategy. Around 30% of businesses surveyed confirmed they did not have such a strategy in place. While 25% planned to create one in the next 12 months, 5% said they had no plans to do so. “The delay in formalising a plan for many businesses could be due to sustainability fatigue,” said Rich Hall, Head of Sustainability at RSM UK. “Globally, there are different levels of proactivity around the green agenda, and when you combine this with inconsistency in strategy both in the UK and across the globe, the complexity can be exhausting, and in some cases – leads to paralysis.” In addition, the report found that 24% of companies haven’t set net zero targets. Of the 74% of companies that have, 21% don’t have a transition plan in place to achieve their decarbonisation goals. “With upcoming legislation that will require businesses to disclose not only climate but broader sustainability risk, businesses need to create a comprehensive strategy, underpinned with a funding plan that is embedded at board level, throughout the business and its supply chain,” said Hall. Rooting sustainability within the culture and fabric of a business will not only facilitate progress and mitigate risk, but unlock commercial opportunities, increase competitive edge, and attract key talent to an organisation, he added.