Responsible Investing

  • UBS forms central sustainability body, Baldinger to lead

    UBS forms central sustainability body, Baldinger to lead

    UBS has revamped its management of sustainability and appointed Michael Baldinger as chief sustainability officer. Last month it named Suni Harford, president of UBS Asset Management, as group executive board sponsor for sustainability and impact.

  • Allied bid backers to split $100m fees as G4S debt package lands

    Allied bid backers to split $100m fees as G4S debt package lands

    Banks backing the successful Allied Universal bid for UK security company G4S are set to split around $100m in financing fees for backing the deal, with Credit Suisse and Morgan Stanley in line for the lion’s share of the profits, as the $6.3bn eight tranche syndication is priced and the firm is delisted.

  • ESG progress needs the sharp and the blunt

    ESG progress needs the sharp and the blunt

    A small band of committed investors in Tesco has achieved spectacular success with a shareholder motion on healthy food. This should embolden investors to hold issuers to account on a wider range of social matters — and also contains a deeper lesson about how markets bring about change.

  • How green is your budget?

    How green is your budget?

    ‘Look at the issuer as a whole’ is the mantra of the corporate and supranational green bond markets, and rightly so. But we need to apply the same approach to sovereigns.

  • Ignorance is bliss

    Ignorance is bliss

    “What gets measured gets managed,” goes an old saw popular in sustainable finance circles. If companies, investors and banks, the argument says, collect better environmental and social data, this knowledge will naturally breed improvements in performance.

  • Tullow Oil dodges restructuring, aims to break free of RBL crunch points

    Tullow Oil dodges restructuring, aims to break free of RBL crunch points

    Tullow Oil is marketing a new $1.8bn senior secured bond to repay its near-term maturities and cancel its reserve-based lending facility entirely, ending the twice yearly cycle of RBL determinations that has pushed some oil explorers close to the edge since the coronavirus pandemic struck.

  • Attacks on 'woke capital' put GOP at odds with markets

    Attacks on 'woke capital' put GOP at odds with markets

    Senator Marco Rubio is the latest Republican in the US to launch an attack on what conservative voices have recently dubbed “woke capital,” apparently putting the GOP at odds with an investment world that has embraced ESG.

  • Taxonomy’s troubled birth shakes its power to green markets

    Taxonomy’s troubled birth shakes its power to green markets

    Market participants will embark in the coming weeks on the difficult task of working out how to use the European Union’s sustainable finance Taxonomy, after the first criteria were published this week. In doing so, they will be conscious that the smooth tide of green finance is now breaking against the hard reality of power politics and resistance by fossil fuel industries — a clash that is rocking the Taxonomy’s credibility, writes Jon Hay.

  • IFFIm steps up to meet Covid crisis

    IFFIm steps up to meet Covid crisis

    Kenneth Lay, chair of the International Finance Facility for Immunisation (IFFIm), is no stranger to using financial innovation to help tackle some of the world's biggest problems. He spoke to GlobalCapital about the importance of IFFIm as a vehicle to finance the global vaccine rollout in the fight against the coronavirus pandemic.

  • Taxonomy ducks gas and caves on bioenergy

    Taxonomy ducks gas and caves on bioenergy

    The detailed rules for the EU Taxonomy of Sustainable Economic Activities look set to come into force, as the European Commission published them on Wednesday, after weeks of intense lobbying and negotiation that had raised the prospect of them being delayed again. Gas will not enter the Taxonomy for now and will be dealt with in separate legislation, but nuclear power could enter the Taxonomy later this year, alarming greens.

  • Germany, Belgium join battle over Taxonomy credibility as it goes to wire

    Germany, Belgium join battle over Taxonomy credibility as it goes to wire

    Hectic negotiations and lobbying are going on at the European Commission about the Taxonomy of Sustainable Economic Activities, in the last day before it is due to publish the detailed rules. Key countries including Germany have changed their positions, GlobalCapital can reveal, while supporters of gas and nuclear power are digging in. Battlelines are now being drawn over the timing.

  • Corporate reporting to enter the age of sustainability

    Corporate reporting to enter the age of sustainability

    A new acronym is joining the sustainable finance lexicon — the SRD. The EU’s Sustainability Reporting Directive will become the cornerstone of corporate reporting on sustainability, which is the foundation of responsible investing. A draft of it has been leaked, showing that it will impose much stricter rules on companies about reporting their environmental and social impacts, but also contains loopholes.

  • DBS sets the stage to cut thermal coal exposure

    DBS sets the stage to cut thermal coal exposure

    DBS Bank is aiming to reduce its thermal coal exposure to zero by 2039, joining a group of global investors and banks that have made similar commitments to tackle climate change.

  • EU eyes separate gas law, leaves harmful bioenergy in Taxonomy

    EU eyes separate gas law, leaves harmful bioenergy in Taxonomy

    The European Commission is set to put forward a new solution to the intense battle over the EU's sustainable finance Taxonomy, between green finance supporters and EU member states that want to safeguard their plans to use gas, GlobalCapital has learned. This would appear to involve leaving gas out of the sustainable category of the Taxonomy, as environmentalists have demanded, and making a "separate legislative proposal" to deal with gas and nuclear power.

  • Jefferies skewers bank ESG ratings for ignoring climate

    Jefferies skewers bank ESG ratings for ignoring climate

    Several European banks’ noses were put out of joint this week by research from Jefferies, which suggested a very different ranking of banks’ ESG characteristics from that investors usually get from rating providers. The study argued commercial ESG ratings on banks are not fit for purpose.

  • Showing ESG rankings everywhere is good biz

    Showing ESG rankings everywhere is good biz

    ESG ratings are starting to appear in term sheets for high grade corporate bond issuers, regardless of whether or not the deal is a themed issuance. This is a sensible move and ought to have a positive impact on the curve for the issuer.

  • ESG ratings importance growing as IG corporates line up

    ESG ratings importance growing as IG corporates line up

    A slew of mandates hit Europe’s high grade corporate bond market on Monday, with issuers increasingly adding their ESG ratings to investor communications that cover their whole enterprise, even if the deal being marketed is not a designated socially responsible investment.

  • UOB appoints new chief sustainability officer

    UOB appoints new chief sustainability officer

    Singapore’s UOB has appointed Eric Lim as its chief sustainability officer, a newly created position to support the bank’s focus on ESG, which got a fresh impetus this week with the sale of the lender’s first sustainability bond.

  • CLOs can preserve investment flexibility despite growth of ESG limits

    CLOs can preserve investment flexibility despite growth of ESG limits

    CLOs have 'by nature' a limited exposure to the industries commonly excluded under ESG criteria, meaning their investment flexibility will be preserved, despite the exclusions appearing in more and more deal documents. This bodes well for the growth of ESG screening in the US CLO market, which has lagged behind other markets, with only 10 deals so far featuring the language, according to Deutsche Bank.

  • Trump exit unleashes Financial Stability Board to act on climate

    Trump exit unleashes Financial Stability Board to act on climate

    The G20’s Financial Stability Board is cranking up its action on climate change again now that Donald Trump is no longer US president. This will feed the hopes of some sustainable finance supporters who want the FSB to drive progress on issues including environmental accounting.

  • Digesting Deliveroo: timing the likeliest cause of first day woes

    Digesting Deliveroo: timing the likeliest cause of first day woes

    The equity market — and beyond — has been puzzling over how Deliveroo, one of the most anticipated IPOs of the year, could have suffered so badly in trading on its first day on Wednesday. Some blamed ESG concerns about the working conditions of the firm's delivery riders, others the dual class-share structure but the simplest explanation was that Deliveroo came at the wrong end of an IPO market that was losing steam.

  • ESG: the filter that lets everything through

    ESG: the filter that lets everything through

    Deliveroo and its shareholders raised £1.5bn this week. The IPO was a dog, priced at the bottom of its range and falling 20% on its debut. But it’s hard to feel sympathy for the investors.

  • KNOC bond clashed with banks’ own climate policies, NGO charges

    KNOC bond clashed with banks’ own climate policies, NGO charges

    An environmental activist institute has argued that the bookrunners of a Korea National Oil Corp $700m bond priced on Tuesday are being inconsistent with their own climate policies, and might even be taking legal risks, because of the issuer's exposure to tar sands oil production in Canada.

  • KNOC fires up first dollar bond of 2021

    KNOC fires up first dollar bond of 2021

    Korea National Oil Corp’s (KNOC) quasi-sovereign credentials helped drive demand for its $700m bond on Monday, its first international debt transaction of the year.

  • Huge investor group adopts Net Zero goal

    Huge investor group adopts Net Zero goal

    The financial markets’ stance on climate change has taken a stride forward as 43 asset managers with $23tr of assets including some of the biggest such as BlackRock and Vanguard have joined the Net Zero Asset Managers’ Initiative. A critical mass of investors is now committed to reducing carbon emissions in their portfolios to zero, meaning that companies can be in no doubt which way they have to go if they want to maximise their potential investor base.

  • Political deals tarnish Taxonomy’s claim to science-based objectivity

    Political deals tarnish Taxonomy’s claim to science-based objectivity

    The polite world of sustainable finance has collided with the ugly reality of politics in the past week, as open strife has broken out over the European Union’s sustainable finance legislation, especially the Taxonomy. Conservative and progressive elements are battling over a host of issues, above all whether gas power should ever be classed as sustainable, and the validity and even legality of the Taxonomy is being called into question.

  • EU Parliament tries to fight dilution of SFDR

    EU Parliament tries to fight dilution of SFDR

    A leaked letter from the European Parliament, seen by GlobalCapital, shows the Parliament has joined in the debate about the Sustainable Finance Disclosure Regulation, which has been watered down to make life easier for institutional investors. The Parliament is calling for the rules to be strengthened, to help savers know which investments are green and ensure compliance does not become just a “tick box exercise”.

  • Science-Based Targets questioned as Axa excludes RWE

    Science-Based Targets questioned as Axa excludes RWE

    The reliability of Science-Based Targets — one of the most promising systems for helping companies decarbonise — has been questioned after RWE, the German power company, was excluded by Axa, the French insurance group, for being too wedded to coal, despite having an approved SBT.

  • Polluters: embrace ESG or lose funding choice

    Polluters: embrace ESG or lose funding choice

    Investors have shunned carbon-intensive and sin sectors this month. The message is clear: if they want to raise capital, companies in dirty industries need to show they are making meaningful moves towards becoming socially and environmentally responsible.

  • Sustainable finance gets real

    Sustainable finance gets real

    Hundreds of things happened this week in sustainable finance. That’s normal now — it’s become a fizzing, global market which is ever-present. Anyone who predicted, say, four years ago that sustainable finance would take over the whole capital market probably feels the outcome has exceeded their expectations.

  • NZIF ‘a game changer’ says UK pension leader

    NZIF ‘a game changer’ says UK pension leader

    This week 35 investors with $8.5tr of assets — many of them UK and Nordic pension funds — launched the Net Zero Investment Framework, a primer for investors wanting to decarbonise their portfolios. Faith Ward, chair of the Institutional Investors’ Group on Climate Change, answers some key questions for GlobalCapital about why the Framework is important and how it will be implemented.

  • HSBC sharpens Net Zero policy after shareholder resolution

    HSBC sharpens Net Zero policy after shareholder resolution

    HSBC has agreed to tighten its policies on climate transition and coal funding, in response to a shareholder motion calling on it to phase out fossil fuel financing. The move underlines the power investors have to accelerate change on environmental and social issues using shareholder votes, and could raise the bar for other banks.

  • Investors launch Net Zero framework with threat of divestment

    Investors launch Net Zero framework with threat of divestment

    The prospect of investors exerting real pressure on companies to reduce greenhouse gas emissions, including divesting from big polluters, came a step closer on Wednesday with the release of the Net Zero Investment Framework, a map to guide investors on the journey to carbon neutrality.

  • Tesco shows investor power by moving fast on healthy food

    Tesco shows investor power by moving fast on healthy food

    Tesco, the UK supermarket chain, has reacted quickly by setting new targets to sell healthier food, less than a month after a group of shareholders filed a resolution calling for this — a sign of how sensitive companies are to having environmental, social and governance motions voted on at their annual general meetings.

  • Citi’s Fraser makes net zero pledge on first day

    Citi’s Fraser makes net zero pledge on first day

    Jane Fraser, CEO of Citigroup, said on Monday — her first day in the post — that the bank was committing itself to net zero financed greenhouse gas emissions by 2050. It joins major banks such as Barclays, HSBC and Morgan Stanley in having made such a promise.

  • NIB expands SRI bond investments

    NIB expands SRI bond investments

    The Nordic Investment Bank has broadened its investments in the socially responsible bond market to include social, sustainability and sustainability-linked bonds from issuers in the bank’s member countries.

  • Banks grow anxious over ECB’s ESG criteria

    Banks grow anxious over ECB’s ESG criteria

    Senior bank finance and capital markets figures speculated this week about where the ECB would be most likely to throw its weight in its effort to boost the sustainability of its balance sheet. With a senior eurozone central banker having recently urged it to decarbonise its assets, banks are on high alert as they anticipate sweeping changes to asset purchase and repo terms, writes Bill Thornhill.

  • Finance is fossilised

    Finance is fossilised

    Look at any bank’s website or hear its CEO speak and you will get a torrent of virtuous words about climate change, sustainability and supporting clients on their journeys to net zero. The same goes for big investors, from BlackRock down, but the windows of their ivory towers are misted up with all the hot air being spouted.

  • BlackRock and Amundi: climate actions to speak louder than words

    BlackRock and Amundi: climate actions to speak louder than words

    BlackRock and Amundi, the largest asset managers in the US and Europe, have both published policies on how they intend to engage with companies about climate change. After widespread criticism, BlackRock has moved a long way towards a more proactive stance, but it is not clear yet that either firm is prepared to get really tough with high carbon emitters — especially in their passive portfolios.