The UK-based Institute of Directors (IoD) has launched a consultation on its first voluntary code of conduct for company directors. The IoD said the code would serve as a practical tool to help directors make “better decisions”, also providing a “behavioural framework” to help firms build and maintain trust among stakeholders. The code is based on six principles of director conduct, comprising: leading by example, integrity, transparency, accountability, fairness, and responsible business, which it defines as “integrating ethical and sustainable practices into business decisions, taking into account societal and environmental impacts”. It was developed for the IoD by a commission chaired by Lord McNicol of West Kilbride, a former general secretary of the Labour Party and senior officer of the GMB union. IoD Director General Jonathan Geldart said recent corporate scandals – including at the Post Office, Carillion and BHS – has seen business leaders fall short of society’s expectations, exerting a negative effect on perceptions. “The purpose of this code is to help UK business win back public trust by embedding the ethics and values that are already adopted as a matter of course by most responsible business leaders,” he said. Revisions to the UK Corporate Governance Code were finalised in January by the Financial Reporting Council, which emphasised the need to promote growth and competition, while also enhancing transparency and accountability.  

BNP Paribas Asset Management, Federated Hermes, Mirova, Robeco and Storebrand Asset Management have stressed the “urgent” need for better data and tools on ocean biodiversity to support investment decisions in a joint statement. The group of investors is seeking innovative ways to capture investee’s dependencies, impacts, risks and opportunities related to ocean and support the implementation of the Kunming-Montreal Agreement. The statement highlights the importance of oceans as the world’s largest ecosystem, covering 71% of the earths’ surface and holding an annual economic value estimated at USD$2.5 trillion. According to the asset managers, data is lacking on areas including aquaculture, coastal and deep-sea mining, marine renewable energy, offshore oil and gas, and shipping. The group suggested improved data on performance indicators, supply chain, local context, and sector estimates would be useful, underlining the need for ease of use, flexibility, and transparency. The statement said the added tools and data would help investors make informed decisions about, and investment in, companies and activities that are causing or resolving this significant harm to ocean biodiversity, allowing them to allocate capital in a way that provides solutions to protect biodiversity. Credible data, consistent with international standards, would enable investors to highlight areas of ocean-related risks and opportunities within portfolios to bolster decision making, and engage on ocean-related topics with investees, the group said.

New rules for EU funds are expected to have significant implications for fund managers, according to analysis by data and research provider Morningstar Sustainalytics. Following the European Securities and Markets Authority (ESMA) final guidelines of funds names using ESG or sustainability-related terms, funds will now be required to comply with the new portfolio requirements or change their names. Morningstar Sustainalytics identified 4,300 EU-domiciled funds with ESG or sustainability-related terms in their names. At best, only 56% of funds with the specific term “sustainable” in their titles would be able to keep the term if the minimum threshold for a meaningful allocation of sustainable investments is set at 30%, the paper said. The remaining 44% of funds would need to increase their sustainable investment allocations, adjust their methodologies or rebrand. If all assessed funds kept their existing names, it could lead to stock divestments worth up to US$40 billion, Morningstar Sustainalytics warned. “While it is impossible to predict the full impact of these guidelines, we expect their implications to be significant,” said Hortense Bioy, Head of Sustainable Investing Research at Morningstar Sustainalytics. “It may be tempting to assume that the big reshuffle ahead means many ESG funds may have been greenwashing. But the reality is that up until now, there were no standards, and it’s a complex area. The guidelines have the benefit of setting minimum standards for ESG products and will hopefully bring greater clarity to investors on what they are investing in.”

Countries are already off track on the COP28 target of tripling global renewable energy generation capacity by 2030, according to a new report by the International Energy Agency (IEA). The report found countries’ official commitments under the Paris Agreement would achieve only 12% of that goal. However, less formal domestic ambitions were higher than the official commitments, the country-by-country analysis found, and could achieve 70% of the goal by 2030. But governments would have to act fast to achieve the goal, The IEA said. At the United Nations COP28 climate conference in Dubai last year, countries agreed to “triple the world’s installed renewable energy generation capacity to at least 11,000 gigawatts (GW)” by the end of the decade. IEA Executive Director Fatih Birol said this target was “one of the critical actions to keep alive hopes of limiting global warming to 1.5 °C”. He said the latest report made it clear the tripling target was “ambitious but achievable” but would require urgent action. “By delivering on the goals agreed at COP28 – including tripling renewables and doubling energy efficiency improvements by 2030 – countries worldwide have a major opportunity to accelerate progress towards a more secure, affordable and sustainable energy system,” said Birol. The report found the cost of solar and wind had fallen more than 40% since the Paris Agreement was signed in 2015, making them “widely competitive” with fossil fuels. Rollout has tripled every year since that date, and last year 560 GW of new renewables were added globally, the report found. But it found other obstacles remained, including permitting delays, inadequate grid infrastructure, technical issues firming up variable generation, and the cost of borrowing.