ESG roundup: ICMA releases guidance on blue-themes bonds

No comments

The International Capital Market Association (ICMA) together with the International Finance Corporation (IFC) – a member of the World Bank Group, United Nations Global Compact (UN Global Compact), United Nations Environment Programme Finance Initiative (UNEP FI), and the Asian Development Bank (ADB) – have developed a global practitioner’s guide for bonds to finance the sustainable blue economy.

Released today, the voluntary guidance provides market participants with clear criteria, practices, and examples for “blue bond” lending and issuances. Based on the Principles supported by ICMA and gathering input from the financial markets, ocean industry and global institutions, it provides information on the key components involved in launching a credible “blue bond”, how to evaluate the environmental impact of “blue projects”; and the steps needed to facilitate transactions that preserve the integrity of the market.

The new global guidance helps:

define blue economy typology and eligibility criteria;
suggest key performance indicators;
showcase latest case studies from the field; and
highlight the critical need for increased financing to achieve Sustainable Development Goal 14, and other global sustainability targets.

The development of a sustainable blue economy, including preventing the decline of marine fisheries, the expansion of low-carbon aquaculture, the scaling of offshore renewable energy and the decarbonisation of maritime transport is integral to tackling the triple planetary crisis of a rapidly changing climate, nature loss and pollution, the ICMA said.

“The ocean serves as a vital heat and carbon sink, absorbing about 31% of the carbon dioxide emissions released and regulating the global climate,” the association added.

The Guidance builds on existing market standards that underpin the global sustainable bond markets such as the Green Bond Principles and also draws on pre-existing specific blue guidance – UNEP FI’s Sustainable Blue Economy Finance Principles and associated Blue Finance Guidance, among others.

CA100+ publishes first net zero standards for mining industry

Climate Action 100+ (CA100+), the investor engagement initiative on climate change, has released its Net Zero Standard for Diversified Mining – the first of its kind in this sector.

The new standard aims to help investors assess the progress of diversified mining companies as they move towards net zero, CA100+ stated.

“Mining companies have a critical role to play in the transition of the global economy, but it is not without significant transition risk. It is vital therefore that investors have robust tools to independently and consistently assess their transition plans, in order to understand their transition risk and support their engagement efforts,” it said.

Designed to complement the sector-neutral Climate Action 100+ Net Zero Company Benchmark, the standard will provide a transparent, systematic, and evidence-backed engagement tool, giving CA100+ signatories and the wider investor landscape the metrics most specific to this important, but complex, sector.

The Net Zero Standard for Diversified Mining reflects the outcome of extensive consultation with investors, mining companies themselves and other key stakeholders, the initiative stated. A final consultation on a draft of the Standard was conducted May-June 2023 before the final release.

Fidelity International expands fund range to include SFDR Article 9 strategies

Fidelity International has expanded its fund range to include eight funds classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR), which are open to retail, wholesale and institutional clients.

The funds address the growing client demand for strategies that invest in issuers that contribute to and benefit from the transition to a more sustainable economy, the firm announced.

Jenn-Hui Tan, chief sustainability officer at Fidelity International, said: “These funds are supported by the further enhancement of Fidelity’s sustainable investing framework, including a proprietary dataset which assesses an issuer’s positive contribution to the targets and indicators of the UN Sustainable Development Goals (SDG). From this foundation, we have been able to develop a series of fund solutions for clients wishing to align their investments with the transition to a sustainable economy.”

The firm’s sustainable range of funds is a cross-asset class fund range with a focused ESG framework and Its investment approach is underpinned by three pillars centred around engagement, exclusion, and Fidelity’s proprietary research.

Fidelity International has launched two new active Article 9 funds – the Sustainable Global Equity Fund and the Sustainable Asian Focus Fund – that aim to achieve capital growth over the long term by investing in sustainable investments through investments in their respective country remits.

In addition, four of Fidelity International’s sustainable range of funds have been reclassified from SFDR Article 8 to Article 9. These strategies (Sustainable Biodiversity Fund, Sustainable Climate Solutions Fund, Sustainable Eurozone Equity Fund, and Sustainable US Equity Fund) have been adapted to fit with Fidelity International’s Article 9 framework.

The portfolio management team for these reclassified funds remains unchanged.