Nordea Investment Management, Robeco, Royal London Asset Management and Ninety One are among the signatories of an investor statement calling on the European Commission, European Parliament and member states to maintain and implement the bloc’s methane regulation “as adopted” – including its timeline and core provisions. The regulation, which targets methane emissions reduction in the energy sector through reporting and mitigation measures, came into force in August 2024 and is due to be phased in over the next five years. It has, however, come under growing scrutiny from within the EU and the US.
“Reopening the regulation – via an omnibus or other process with unclear timing and scope – would introduce unpredictability and undermine companies and investors actively working toward compliance. What is needed now is consistency and clarity,” the statement said. Last week Responsible Investor spoke to a number of investors – some of which are also signatories of the statement – about concerns regarding the future of the regulation and engagement they were undertaking with policymakers.
European Central Bank (ECB) executive board member Frank Elderson has said that climate and nature risks will begin featuring in its regular supervision and enforcement activities. “European banks have reached a stage of maturity that we can now move from a foundational to a business-as-usual approach in our supervision,” said Elderson in a speech on Wednesday. The ECB introduced supervisory expectations on the topic and set a 2024 deadline for banks to achieve full alignment. Elderson added that EU banks could leverage their expertise on climate issues “by offering advisory services to assist their clients on their decarbonisation pathways, diversifying their revenue streams”.
The US Federal Housing Finance Agency has announced its departure from the Network for Greening the Financial System (NGFS). The agency – which regulates mortgage guarantee providers Fannie Mae, Freddie Mac and 11 government-sponsored home loan banks – slammed the previous Biden administration for driving “housing costs up with politicised nonsense that prioritised climate activists over American families”. The agency said that it has told the NGFS that it would no longer engage in committees, taskforces or working groups, and requested to be removed from the NGFS website and other public materials.
Separately, the NGFS has warned that central banks and supervisors face significant challenges to integrate high-quality physical data, in a note published this week. These include the lack of granular data on the location and characteristics of physical assets, the unreliability of the “damage function” used to predict future losses, and the limited availability of technical expertise.
The $13 billion pension fund for public employees in California’s Alameda County is set to vote on Wednesday on whether to expand its annual ESG questionnaire for asset managers. The list of questions had included basic information on whether a manager was a PRI signatory and on reporting, diversity and proxy voting, but the fund’s consultant, NEPC, suggested adding more detailed questions on reporting, as well as whether the manager is a signatory to Climate Action 100+ or a net-zero alliance, and how ESG metrics and ratings are integrated into the investment process.
The pension fund for Dutch telecoms firm KPN has handed M&G a €300 million impact private debt mandate. The strategy, classified as Article 9, aims to deliver measurable environmental and social outcomes across the themes of climate and biodiversity, technology and responsible production and consumption. The strategy is expected to prioritise Europe, with a clear focus on origination in the UK, Germany and the Netherlands, where M&G has local origination teams.
The Taskforce on Nature-related Financial Disclosures and the UN Sustainable Stock Exchanges have published guidance to provide stock exchanges with a starting point to support issuers in understanding and disclosing their nature-related issues. Published on Tuesday, the document summarises and collates existing resources rather than introducing a new standard for nature-related disclosures. “The intention is to provide exchanges with a consistent base from which to develop their own locally customised guidance,” it said.