Hermes, UBS and Federated launch SDG engagement high yield funds
Hermes Investment Management is launching high yield funds focused on social and environmental engagement, together with investment banks, FederatedInvestors and UBS. The trio are launching the SDG Engagement High Yield Credit funds, which will look to achieve a meaningful social and/or environmental impact on top of a strong return by investing in high yield bonds and engaging with their issuers. The new products will form part of UBS’s $5 billion commitment to SDG-related impact investing and will also be the first new strategy added to its sustainable multi-asset portfolio since its launch last year. The new funds aim to support key sustainability initiatives across the financial services industry, including the UN-backed Principles for Responsible Investment (PRI), which, as reported yesterday, has called for fund managers to engage more effectively with bond issuers, and the International Finance Corporation’s Operating Principles for Impact Management, a new set of global impact investing standards. (Business Green)
IHS Markit launches world-first carbon credit index
The first ever index for tracking the global price of carbon credits has been launched by global information provider, IHS Markit, allowing investors to access opportunities arising from “a primary strategy for reducing carbon emissions”. IHS Markit’s ‘Global Carbon index’, which combines proprietary information and futures markets data, tracks the performance of the largest, most liquid and most accessible tradable carbon markets: the European Union Emission Trading System, the California Cap-and-Trade Program, and the Regional Greenhouse Gas Initiative. The index currently values carbon credits at $23.65 and shows that to date investors would have seen a return of 132 percent if they had invested at the beginning of 2018. It is calculated using Oil Price Information Service (OPIS) data and carbon credit futures pricing in those markets. Co-founder of Climate Finance Partners, Eron Bloomgarden said it “creates an important benchmark which helps financial institutions to better assess and price climate-related financial risks”. (Business Green)
Climate Change
UN plans vast urban forests to fight climate change
The United Nations plans to work with Britain’s Kew Royal Botanic Gardens to grow forests in 90 cities across 30 countries in Africa and Asia. The UN Food and Agriculture Organisation (FAO) said the pace of urbanisation on both continents was contributing to climate change and planting trees could improve air quality, cut the risk of floods and heatwaves and halt land degradation. Almost 70 percent of the world’s population are estimated to be living in cities by 2050, mainly in Africa and Asia, environmental impacts of urbanisation could worsen without solutions, experts have warned. As well as working with the U.N. housing agency, Britain’s Kew Royal Botanic Gardens, and the C40, a global network of cities pushing for climate action. The FAO is also working with Stefano Boeri Architetti, the urban planning firm that designed a “vertical forest” in Milan by incorporating trees equivalent to two hectares of forests in two residential towers. (Eco-Businesses)
Energy
Energy suppliers accused of ‘greenwashing’ tariffs to attract environmentally friendly customers
Energy companies are misleading customers with a “greenwash” by claiming to sell renewable electricity but not directly buying any power from renewable sources, according to Which?, the product and service review group. Which? analysed 355 tariffs offering renewable electricity in June 2019 and found 20 suppliers selling 100 percent renewable electricity tariffs without contracts to buy any renewable electricity. One supplier states “electricity supplied to your home is 100 percent green”, which Which? says is “impossible” to guarantee. Under current government rules, suppliers can sell 100 percent renewable electricity by purchasing Renewable Energy Guarantees of Origin (REGO) certificates for as little as £1.55 per customer. Which? is calling on the government regulator of gas and electricity, Ofgem, to offer greater clarity on how renewable energy is defined as the current system allows suppliers to rely exclusively on REGOs, “greenwash” their tariffs, and do “very little” to support new renewable electricity generation. (The Telegraph)
Strategy
Kering goes carbon-neutral through offsets
The luxury fashion group, Kering, which is behind brands such as Guccia, Balenciaga and SaintLaurent has confirmed plans to offset its entire 2018 greenhouse gas (GHG) footprint. It will purchase offsets for the GHGs emitted by its operations, power sourcing and supply chain after a string of efforts to reduce its emissions over the past few years – with results tracked through the company’s ‘Environmental Profit & Loss’ accounting model, based on a natural capital approach. Continued efforts to reduce its footprint further is a priority, however offsets to achieve carbon neutrality have increasingly been under consideration since the publication of the IPCC’s landmark report on climate change. The firm’s offsets for 2018 emissions will cover 2.4 million tonnes of CO2e and be verified by REDD+. Kering has chosen for the offset funding to be earmarked for projects supporting biodiversity and habitat conservation and restoration and claims its contribution will preserve around two million hectares of forests. (edie)
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