Copy
View this email in your browser


SRI HEADLINES


 The news that shaped the week in responsible investing 
Tweet
Forward

 

Dear SRI reader,

The G7 Environment Ministerial Meeting in Bologna finished on the 12th of June, putting the emphasis on the 'fundamental' role of sustainable finance, possibly for the first time. Meanwhile, the SDGs were recognised as the way forward, allowing for further integration of economic, social and environmental dimensions in accomplishing the 2030 Agenda and in the global policy agenda.
The Ministers recalled the extent to which the implementation of the Paris Agreement will present unmissable opportunities to step up the fight against both the social and environmental challenges the world is still facing and which are deeply intertwined with the economic ones. The role of private sector actions which is also encouraged by the work around the SDGs, was strongly supported by the Ministers, as part of their role to mobilise the increase of capital flow in sustainable finance.   
The role of financial centres and how to improve access to finance for SMEs garnered special attention in the
Ministerial Communiqué. Strong emphasis was put on the role that financial centres are already playing today, as well as the potential they represent in bringing parties together to conjure up sustainable international solutions. Gian Luca Galletti, Italy’s Environment Minister was quoted as saying: “This is why Italy asked the G7, for the first time, to look at how to boost the role of the global financial system in sustainable development, and turn trillions of dollars in capital towards green investments.”
 
Access to finance for the SMEs and the relevance of assisting them with their endeavours to capitalise and increase their role towards a sustainable growth needs to continue and be further promoted. SMEs are the foundation of the economy, as they represent around 99% of all enterprises and employ an increasing number of people. There are just under 23 million of SMEs in Europe today. The financial system needs to find a way to support them in their investments and bring them closer to sustainability.
 
A fiscal reform to promote sustainable development was welcomed by the Ministers, with particular emphasis on how to remove inefficient incentives which are antithetic to sustainability goals. Fiscal policies generate domestic public resources and encourage more effective public spending, create fiscal space for priority investments and support broader fiscal reform. By pricing environmental externalities, green fiscal policies can also leverage additional resources, including from the private sector, and shift consumption towards environmentally friendly, socially inclusive activities.
 
Everyone is summoned. Citizen involvement is considered essential to engaging civil society and business. The private sector, through best practice and leading initiatives, is going to be a key partner. There are many possibilities for investors who have the opportunity to take the lead and embark on a sustainable journey, bringing different stakeholders together.
Happy reading,
Flavia Micilotta
- Eurosif's Executive Director
ESG
Paris agreement: Parliament backs new carbon cuts, debates U.S. withdrawal (European Parliament press release) Plans for new compulsory greenhouse gas cuts under the Paris agreement were backed by MEPs on Wednesday, following a debate on the announced U.S. withdrawal.

U.S, G7 partners remain at odds on climate at environment meeting (Reuters) Differences between the United States and other leading economies over climate change remain wide and are not likely to narrow, environment ministers from G7 countries said on Sunday. The G7 met in Bologna to discuss issues ranging from climate change to sustainable development and litter at sea.

The Universal Basic Income discussion (Bruegel) What’s at stake: the concept of a Universal Basic Income (UBI), an unconditional transfer paid to each individual, was prominent earlier this year when Finland announced a pilot project. It’s now back in the discussion as the OECD published a report illustrating costs and distributional implications for selected countries. We review the most recent contributions on this topic.

EU targets terror financing with VAT fraud crackdown (EURACTIV) To gain the cooperation of reluctant countries such as Germany in its anti-fraud efforts, the EU executive is highlighting the link between VAT fraud and terrorism. The European Public Prosecutor’s Office (EPPO) received the green light from 20 EU countries last Thursday (8 June). But after an arduous negotiation process, several northern member states decided not to cooperate.

 

 
This is what a private-sector solution to the refugee crisis looks like (Eco-Business) With the right approach, the €20 billion ($21.9 billion) in annual development funding provided by the European Union could be leveraged to mobilise €300 billion of capital for the developing world, changing millions of people’s lives for the better. The model is straightforward: first, blend public, private, and charitable contributions; second, invest the funds under rigorous private-sector standards, rather than entrusting them to profligate public-sector actors who often treat donor money with contempt.

European Parliament on the fence over tax transparency for multinationals (EURACTIV) After a vote on Monday (12 June) by the European Parliament’s ECON and JURI committees, European multinationals will be obliged publish details of their activities in every country where they operate. But a number of loopholes weaken the tax transparency drive.
 
Investors
Investors Need a Better Green Filter (Institutional Investor) Investors need a better way of evaluating a fund manager's green credentials or risk being seduced by investment strategies dressed up as environmentally friendly. 

Is quantitative easing creating a bubble for carbon-intensive assets? (Fund Strategy) There is evidence that the ECB’s programme has impacted spreads in the utilities, energy and auto sectors. “Ethical bond investors may choose to avoid fossil-fuel emitters, among other principles, and therefore may not have benefited to the same extent from spread tightening.” However this could benefit ESG investors as the programme unwinds.

EIOPA reassures on persistent IORP solvency funding rule fears (Investment & Pensions Europe) The European Insurance and Occupational Pensions Authority (EIOPA) is not intent on introducing solvency funding requirements for pension funds, the supervisory authority’s executive director has said.

Consultation aims to strengthen finance sector guide on natural capital (Environmental Finance) A formal consultation has been launched on the draft Finance Sector Supplement to the Natural Capital Protocol. Investors and other stakeholders are being encouraged to use the consultation as an opportunity to help strengthen the value of the document to the financial sector.

 


NN IP calls for green bond issuers to report on quantitative impacts (NN IP press release) NN Investment Partners (IP) has called for green bond issuers to report on quantitative key performance indicators (KPIs) to boost transparency and interest from investors. The voluntary industry standards governing green bonds, like the Green Bond Principles, should include quantitative key performance indicators (KPIs) if they are to boost interest from investors, according to NN Investment Partners (NN IP). Green bonds are bonds whose proceeds are separated from general corporate purposes and used exclusively for projects that have a positive impact on the environment.
 
Asset Managers
European Parliament votes for corporate ‘get-out’ clause on tax transparency (Transparency International) Today, Transparency International EU welcomes the European Parliament’s support for global tax transparency and efforts to put an end to the secrecy surrounding multinational companies’ activities, structures and tax payments. However, an amendment tabled by the liberal ALDE group and supported by the centre-right EPP group includes a significant loophole which could undermine the entire proposal, according to Transparency International EU.

Utilities that are renewables leaders have competitive advantage - S&P (Environmental Finance) European utilities companies that are market leaders in renewables have a clear competitive advantage as the sector transforms, according to a report by S&P.

Four Methods To Guarantee Sustainability (The Market Mogul) Economic transformation towards a theme of sustainability has an importance beyond simply saving the environment, but rather achieving developmental needs and positive global change. Long-term transformation is needed to move towards a sustainable future and can be achieved through the following four methods.

Fund management industry failing to employ enough women (Fund Strategy) Fund management lags other industries in the UK for gender equity and undermines shareholder engagement on the issue, says Tilney as its latest analysis on female representation reveals just 9.2 per cent of managers are women.

 


Japan’s GPIF calls on external managers to disclose proxy shareholder votes (Pensions & Investments) Japan's Government Pension Investment Fund is calling on its external managers to disclose the details of the proxy shareholder votes they exercise on behalf of the ¥144 trillion ($1.3 trillion) Tokyo-based pension fund.
 
Major US pension fund divests Australian coal (Financial Standard) Environmental finance group Market Forces has called on Australian super funds and asset managers to follow the move and divest from Australian coal companies. "Almost every Australian is exposed to high-risk, high-carbon investments due to the failure of the investors who manage our money to understand the threat climate change poses to their portfolios," Market Forces analyst Dan Gocher said. "Hopefully, this clear, common sense statement from one of the world's most influential pension funds will start to shake them out of their current torpor."

ESG in private equity: from fringe to focal (CPI Financial) As institutional investors increasingly turn to alternative investments, including private equity to seek additional return and diversification, the pressure is now on private equity managers to step up and offer sustainable investment solutions.
 
QUOTE OF THE WEEK
"If we don't change our consumption habits, we won't meet the SDGs. Changes are unavoidable and humans are supposed to be intelligent. Let's prove it!

Janez Potočnik, Co-Chair of UN International Resource Panel, in his presentation '2030 Trends: Extending the Life of Things' at the FTA's Unleash Opportunity conference on Thursday the 15th of June.
Copyright © 2017 Eurosif, All rights reserved.


Click here to unsubscribe from this list

Email Marketing Powered by Mailchimp