CLIMATE CHANGE

A third of top UK firms emit enough CO2 to push up global warming by 2.7◦C 

Nearly one-third of the UK’s FTSE 100 companies emit carbon dioxide at rates that would contribute significantly to the climate crisis, according sustainable finance advisor Arabesque. Oil companies including BP, Royal Dutch Shell and mining firms such as Anglo American, Antofagasta, BHP, Evraz, Fresnillo and Polymetal are among the 31 FTSE 100 companies emitting carbon dioxide at a rate consistent with global temperature increases of 2.7◦C or more by 2050. Such temperatures surpass the Paris Accord’s aim to limit global warming to below 2◦C, and will likely cause severe damage to the environment and to human life. The study analysed 83 FTSE 100 companies, taking account of scope 1 and 2 emissions per dollar of revenue, with emissions likely being even higher if also considering scope 3 emissions. (The Guardian)

GENDER EQUALITY

Women earn two-thirds less than men in top finance roles  

Female directors at the UK’s largest financial services firms earn on average two-thirds less than their male counterparts, underlining the gender pay gap that exists at the highest levels of the financial sector. Average pay for female directors at FTSE 350 financial services companies stands at £247,100, 66% lower than the average £722,300 paid to male directors, according to research by employment and partnership law firm Fox & Partners. Despite firms increasing board diversity, 86% of the female company directors occupy non-executive roles, which tend to be lower paid than executive positions, and involve less responsibility for running the business. The revelations come days after the final report in the government-backed Hampton-Alexander review, which showed women represent more than a third of boardrooms of Britain’s FTSE 350. (The Guardian) 

CORPORATE REPUTATION 

Asian banks are the biggest backers of the coal industry and still growing 

Asian banks were responsible for 61% of total lending and underwriting for the coal trade 2019, rising to 66% in 2020, according to a report from civic society groups Urgewald, Reclaim Finance, 350.org Japan and 25 further NGO partners. Japanese banks Mizuho, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Banking Corporation (SMBC) were the biggest lenders. All three have made public commitments to reduce their coal exposure, but these only cover a small portion of the banks’ lending and do not rule out corporate loans or underwriting for companies that are still building new coal plants. Japan, China, and India together account for 70% of global underwriting to coal companies. As for institutional investors, the United States is the biggest backer of coal, accounting for 58% of institutional investment. (Eco-Business*) 

STRATEGY

British insurer Aviva sets out net zero 2040 climate strategy 

British insurer Aviva plans to reach net zero emissions from its investments by 2040 and net zero from its own operations and supply chain by 2030, hailing its commitments as the most demanding targets set by any major insurer worldwide. The insurer’s plans include expanding green investments, and switching to renewable electricity in its offices and to electric or hybrid vehicles in its motor fleet. By the end of this year, the firm will stop underwriting insurance for companies making more than 5% of their revenue from coal or “unconventional” fossil fuels such as shale gas, unless they have signed up to the Science Based Targets initiative (SBTi). If they do not sign up, Aviva plans to divest from such companies by the end of 2022. (Reuters) 

WATER

CDP warns water risk will cost corporates five times more than cost of action 

According to a major report by environmental disclosure non-profit CDP, some $301 billion of business value is at risk of water stewardship challenges, yet it would take corporates just $55 billion to deliver appropriate mitigation and adaptation initiatives. Despite a 20% year-on-year increase in businesses undertaking CDP’s water security questionnaire, of the 2,934 companies that disclosed information in 2020, more than one-third increased water withdrawals, and more than 95% were not able to evidence progress against pollution targets.  CDP warns that better measurement and disclosure of water-related risks, along with increased investment in mitigation and adaptation measures, will be needed to avoid major financial losses resulting from physical damage or transition risks, including a loss of investor interest. Investors managing $110 trillion of assets collectively support CDP’s water security questionnaire. (Edie)