Eurosif January Newsletter
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Church of England joins passive push with new climate transition index
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The Church of England pension board is today launching a “passive index” onto the London Stock Exchange, which will be aligned with the goals of the Paris climate deal.  It adds: “The church will invest an initial £600m in the FTSE TPI Climate Transition Index which follows calls from Mark Carney, the outgoing governor of the Bank of England, for pension funds to tackle the financial risk of climate change.” The paper says the church’s endowment and investment funds plan to sell shares in “fossil fuel companies that are slow to respond to global warming” starting in 2023. To bring this to life in the Oil & Gas sector they will sell shares in Exxon, Chevron and BP amongst others that dont have scope 3 targets. In contrast Shell and Repsol are in the index.

The Ecolabel and FNG-Label

The EU Commission is currently extending their Ecolabel for Financial Products, which is anticipated to contribute to the success of the Action Plan by encouraging investments in sustainable economic activities.The Ecolabel will define the minimum environmental performance of product groups marketed explicitly as green.

This will complement national SRI labels already established in various European countries and who are part of the ad-hoc-working group for defining the criteria of this purely green Ecolabel.

The FNG label is a holistic label for sustainable investment funds that was introduced in 2015. After five years, it is established on the German-speaking markets, especially in Germany and Austria. 104 successful applicants were awarded the label for 2020 at the end of November.105 funds had applied, which corresponds to an increase of 60% over the previous year. This means that the pace of growth has accelerated again after 25% and 40% in the last two years. The number of competing fund houses rose from 30 to 47. The awarded funds manage assets of around EUR 30 billion. The European dimension of the FNG label is evidenced by the fact that funds from 12 countries have been awarded the SRI quality standard. This label will go hand in hand with the efforts at EU level.

In other news, the FNG-market report will launch on 8 June 2020. Keep an eye on the website for more. 

French SIF’s handbook on supply chains and responsible investment available in English

This handbook, the third from French SIF after those on green finance and on the French article 173-VI, is intended to raise awareness among asset management companies and institutional investors of the environmental, social and governance (ESG) issues related to the supply chain and to encourage them to adopt best practices to manage the related risks. It is still an unknown topic even though it represents major risks.

Download the handbook
Discover the other handbooks
2020 Edition of FIR-PRI Awards “Finance & Sustainability” is launched

Competition in the five categories – Best Published Article, Best Master Thesis, Best PhD Thesis, Best Pedagogical Innovation and Research Grant – is open until April 19th. Please share with your networks!

New reports on the SRI market in Italy: climate change and pension plans in the spotlight

New insights on the Italian SRI market are available for international analysts. ItaSIF published the executive summaries (English version) of two reports that were presented last November during the Italian SRI Week.
  • “Italian Savers and Climate Change” deep dives into the relevance of environmental and climate issues in Italian retail investors’ financial choices; propensity to invest in SRI products is also explored.
Most of Italian savers have embraced consumption-wise practices in their daily life, and are somewhat sensitive to environmental issues in financial products, but still need to increase the propensity to integrate this interest into their investment decisions. The research shows that there is still room for improvement on information about SRI.

The inquiry was conducted by ItaSIF in collaboration with BVA Doxa. The English version of the Executive Summary is available here.
  • The fifth edition of “The sustainable and responsible investments policies of pension plans” was conducted through a questionnaire sent to the main pension plans in Italy. In the 2019 edition the sample was broadened and the questionnaire updated: overall, 115 plans were included in the sample, totaling €219,462 million AUM.

The survey shows a growing interest of Italian pension plans for SRI: the response rate was 78%; 47% of respondents adopt a sustainable investment strategy and the majority of respondents that do not integrate ESG criteria are now considering introducing SRI policy. The Italian pension plans are updated on the EU action on sustainable finance: almost all respondents (98%) are aware, at least in general, of the measures that the European Commission is working on.

The research was conducted by ItaSIF in collaboration with Mefop and MondoInstitutional.  The research is originally based on a methodology developed by VBDO. The English version on the Executive Summary is available here.
On 21 November the closing event took place in Rome and was dedicated to the presentation of the fifth edition of a study on the SRI policies of pension funds: this year marked a turning point, since the sample was expanded and the questionnaire restyled in order to better capture the evolution of the industry.

Climate and Engagement concerns

On the 28 January 2020 Spainsif organised in Madrid an event on the matter of Climate Engagement in order to discuss the upcoming and challenges that climate change is bringing to the financial market and its players.

Representatives from different groups like Alembeeks Group, ECODES, IE University y Pictet Asset Management, discussed their different approaches towards the rapid changes that this sector is facing. As SRI transforms it is important to analyse the the drivers of change. Engagement and voting strategies are one of these drivers and seems especially important in climate related issues. 

Larry Fink’s letter has fueled a debate on the effectiveness of the actual engagement strategies on climate and the need for risk management, as the director of Alembeeks, Alex Bardaji stated, information is changing as well as our social responsibility towards the companies and clients.

Other international initiatives to foster engagement and coordination between companies such as the Climate Action 100+ were covered, stressing the difficulties of a lack of common standards of information from companies create and and a lack of transparency around engagement from some active managers despite concerned investors and members of public.

The climate emergency has raised concerns over the effectiveness of climate and social engagement that financial entities and companies are taking, not only at the national level but at an international one as well.

Good Money Week goes global 

Good Money Week 2020 - the UK's retail facing finance campaign - will reach Australian and Canadian retail audiences thanks to collaboration with RIAA and RIA Canada

The campaign will spotlight the climate crisis and a just transition and help ensure everyone knows they have sustainable and ethical options when it comes to their banking, pensions, savings and investments.

The mission is even more critical given the force of the recent Australian bush fires and carbon emissions continuing to rise at a rate that will ensure we fail to achieve a 1.5 degrees future. Good Money Week will highlight means for action ahead of COP26 held in Glasgow just over a week later.

Campaign organisers are looking for sponsors. This opportunity will interest those with products and services that may help increase retail investors' financial resilience against carbon risk and make it easier for them to finance a just low carbon transition. Get in touch if interested.

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