European Central Bank (ECB) president Christine Lagarde has repeated previous warnings made by the supervisor about the potential negative implications of the EU Omnibus proposal to simplify and streamline sustainable finance regulations. A letter sent by Lagarde to members of the European Parliament noted that proposals to reduce the amount of sustainability disclosure requirements for EU companies and delays in transposition would weaken the ECB’s “ability to perform a granular assessment of climate-related financial risks on its balance sheet and within its collateral framework”.
Simplification initiatives need to “strike the right balance between retaining the benefits of sustainability reporting for the European economy and the financial system while also ensuring that the requirements are proportionate”, said Lagarde. The ECB warned earlier this year that slashing sustainability disclosure requirements under the Corporate Sustainability Reporting Directive (CSRD) “can lead to systematic and unquantifiable bias in the computation of aggregate sustainability information”.
Norges Bank Investment Management decided on 8 August to exclude six companies with connections to the West Bank and Gaza, based on recommendations from its Council on Ethics. It has also sent the council “information about several Israeli companies” following a fresh review of the firms in its equity portfolio. The investment giant outlined these actions in a response to a letter from the Norwegian government asking it to provide a new review of its investments in Israeli companies and any new measures it considers necessary. It said the six excluded companies will be named once the divestment has been completed, in line with standard practice.
With regards to the new review, NBIM said it had looked at Israeli companies in its portfolio, using public information to assess the nature of the business and connections to operations in occupied areas, contracts with Israeli defence and ownership of companies already excluded. Based on this, it had referred a number of firms to the Council on Ethics, which has the power to recommend excluding firms or putting them under observation. The fund also said that since 2024 it has required external managers to seek approval for new investments into Israeli companies – which has not always been granted – and that its exposure to Israel has decreased significantly since the end of H1. This comes after NBIM announced last week its decision to bring management of Israeli assets in house and exit 11 Israeli companies outside its benchmark index.
The UK Transition Finance Council has launched a consultation on draft guidelines designed to support capital allocation to credibly transitioning entities, closing on 19 September. The guidelines set out basic principles and minimum expectations for company transitions with the aim of creating common minimum expectations for users to “confidently distinguish what is and what is not credible transition finance”. The Council will launch a second round of consultation in November and aims to have the final guidelines in place by March next year.
Nearly three quarters of UK funds using one of the country’s sustainable investment labels have less than £500 million in assets, according to analysis by Barclays of the 93 open-ended funds using a label. Just over 10 percent of the funds have more than £1 billion, with slightly under 40 percent smaller than £100 million. Sustainability Focus takes the lion’s share of labels by both count and AUM, while second place is split between Impact funds, which are more numerous, and Improver funds, which have a larger aggregate AUM.
APG has handed a 22-year mandate to InfraRed Capital Partners for European social infrastructure investments, with an initial portfolio of £225 million in assets acquired from its listed infrastructure vehicle HICL. The seven assets in the initial portfolio are spread across health and education projects, and HICL has also agreed a “partnership framework” with APG which will allow scope for future divestments and co-investments.