G20 leaders have acknowledged the need for green finance to be scaled up to “support environmentally sustainable growth globally”, identifying challenges facing the development of green finance and possible remedies.
It is said to be the first time leaders of the 20 largest world economies have referenced the importance of green finance in a communiqué following a summit, which this year was held in Hangzhou, China, on 4-5 September.
In their communiqué, the leaders said: “We believe efforts could be made to provide clear strategic policy signals and frameworks, promote voluntary principles for green finance, expand learning networks for capacity building, support the development of local green bond markets, promote international collaboration to facilitate cross-border investment in green bonds, encourage and facilitate knowledge sharing on environmental and financial risks, and improve the measurement of green finance activities and their impacts.”
The G20 leaders also welcomed a report submitted by the Green Finance Study Group (GFSG), the first such group established by the G20, which outlined options for mobilising private capital for green investment.
Research by the UN Sustainable Stock Exchanges (SSE) initiative has found that, although stock exchanges have increasingly been taking steps that help integrate sustainable development in capital markets, “more action is needed”.
Out of 82 stock exchanges, 58 – representing more than 70% of listed equity markets – have made a public commitment to advancing sustainability in their market, according to a biennial report from the SSE initiative.
Twelve exchanges incorporate reporting on environmental, social and governance (ESG) information into their listing rules, and 15 provide formal guidance to issuers.
The SEE said ESG indices remained the most popular sustainability instrument among exchanges, with 38 of 82 providing them.
On a policy level, government action is skewed toward encouraging corporate disclosure of ESG factors, while “involvement on the investment side is less developed”.
Eight of the 50 countries covered by the SSE initiative’s research implement an investor stewardship code that addresses ESG factors.
In other news, the Asset Owners Disclosure Project (AODP) has published a report comparing how investors voted on a climate change shareholder resolution at Exxon.
The resolution was defeated, with 38% voting in favour, a marked difference with the support for similar resolutions at BP and Shell AGMs in 2015, which the AODP said were passed by the same shareholders.
The boards of BP and Shell supported the shareholder resolutions, while Exxon’s did not.
The AODP cited a “new and significant split amongst the giant fund managers, with leading funds BlackRock and Vanguard voting against [the shareholder resolution] and State Street voting most of its stock in favour”.
The AODP said its analysis showed that “many investors [were] ignoring responsible investment commitments they have made”.
Edward Mason, head of responsible investment at the UK’s £6.7bn (€8.4bn) Church Commissioners, has previously said the difference between the voting at the Exxon and the BP and Shell AGMs highlighted the need for “a cultural shift”.
BlackRock Investment Institute, which supports BlackRock asset management, has said that “investors can no longer ignore climate change”. It published a report today, 6 September, on how investors can adapt portfolios to address climate-related market risks. These include technological advances in power production, storage and consumption that undermine existing business models, and regulatory efforts to limit carbon emissions and improve energy efficiency.
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