STRATEGY

UNFCCC publishes net-zero roadmap for financial markets

The United Nations Framework Convention on Climate Change, tasked with supporting the global response to climate change, announced the release of Finance Climate Action Pathway 2021, aiming to provide a roadmap for financial markets to align with global net-zero goals and finance the transition to a 1.5^oC future. Among its key goals are ensuring financial decisions incorporate climate change considerations, including adjusting price signals and profit motives to account for negative spillover effects, including using carbon pricing. The roadmap also calls for private finance to help drive capital flows to areas vital investment areas including clean energy and infrastructure. The Pathway also suggests some near, mid and long-term milestones, such as ending fossil fuel subsidies or aligning board and executive remuneration with net-zero targets and climate risk management by 2030. (ESGToday)

GOVERNANCE

Fidelity International hardens stance on climate and gender

Asset manager Fidelity International, which oversees $787 billion in client assets, will punish directors at more than 1,000 companies globally in 2022 if they fail to tackle climate change and lack of boardroom gender diversity. The company is targeting about 1,000 companies that are large emitters of greenhouse gases at a sector level or contribute heavily to carbon emissions within the asset manager’s portfolios. It will vote against directors where companies lack a policy on climate change or do not disclose emissions, or lack carbon reduction targets if they belong to the most exposed sectors. Fidelity will also vote against directors in developed markets where boards are not at least 30% female, or 15% female in markets where gender standards are still developing. Fidelity already votes against all-male boards. (Financial Times*)

DIVERSITY & INCLUSION 

UK ministers lay out plan for disability workplace inclusion

UK ministers have announced plans to help disabled people in the workplace, part of a wider disability strategy billed by some as the “most ambitious in a generation”. The first incarnation, backed by £1.6 billion in funding, focuses on tackling inclusion in the workplace, seeking to cut the 28.6% disability employment gap. Ideas include the possibility of making all larger companies disclose disability statistics, and increasing the number of disabled people employed by official institutions including the civilian military and reservists, MI5, MI6 and GCHQ. There will also be a pilot scheme for a so-called “access to work adjustments passport”, plus an online advice centre for disabled people and employers. However, some charities have critiqued the plan as being thin on immediate actions, medium-term plans and details of longer-term investment. (The Guardian)

SUSTAINABLE INVESTMENT

Philippines' Union Bank first social bond receives US$150m

The International Finance Corporation (IFC), the private investment arm of the World Bank Group, is funnelling US$150 million to the Union Bank of the Philippines’ social bond that aims to finance loans to micro, small and medium-sized enterprises (MSMEs) struggling from the Covid-19 crisis. The bond looks to raise money for projects with positive social outcomes, such as improving healthcare and financing, and is expected to finance over 2,000 loans to MSMEs and create thousands of jobs over the next seven years. Before the pandemic, MSMEs accounted for over 90% of businesses in the Philippines and over 60% of jobs, but they only received 6% of total bank loans in the country. The landmark deal highlights IFC’s first Covid-19 response social bond investment in Asia. (Eco-business)

ENVIRONMENT

APP's controversial Indonesian mill plans to triple in size

Ogan Komering Ilir (OKI) mill, one of the world’s biggest pulp mills that alarmed environmentalists when it went into production, and which is owned by one of the world’s largest paper companies Asia Pulp & Paper (APP), plans to triple in size. An environmental impact assessment for the extension to the mill in South Sumatra reveals its capacity could increase to 7 million tonnes per year, up from 2.8 million tonnes a year currently. Reaching that capacity will command an estimated 30.1 million tonnes of wood a year, up from 10 million tonnes a year now. Campaign group Indonesian Forum for Living Environment warned of the extension’s “grave consequences” for Indonesian forests, chronic transboundary air pollution from burning peatlands, and land disputes. APP insists the extension complies with government policy. (Eco-Business)

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