9 things on climate change and your money you might have missed

This is a round up of other news on climate change, investors and financing the low carbon transition that caught my eye in last week. For the big story scroll to the end.

1. Only one in 20 European pension funds consider climate risks: The FT report a Mercer study that: ‘found that just 5 per cent of European pension schemes have considered the investment risk posed by climate change, after gathering information from 1,241 institutional investors across 13 countries that manage combined assets of about €1.1tn.’ … ‘Luke Hildyard, policy officer at the PLSA which represents 1,300 UK retirement funds with combined assets of £1tn, said it was wrong to assume that pension trustees who were responsible for investments were blase about the threat of climate change. “But more needs to be done by regulators to encourage trustees to put effective climate change risk measures in place,” said Mr Hildyard. (Pension funds pressed to protect portfolios from climate change, 26 June, FT ($). Responsible Investor also look in depth at the report (Hugh Wheelan: The Mexican stand-off behind Mercer’s 5% of pension funds ‘considering’ climate in AA figures, 26 June, ($)).
2. Nearly 400 global investors (managing more than $22 trillion in assets) urge G20 to stand by Paris Agreement and drive its swift implementation: ‘Long-term institutional investors (389 representing more than USD 22 trillion in assets) have written to G20 leaders urging governments to stand by their commitments to the Paris Agreement at their upcoming Summit in Hamburg on 07- 8 July 2017.’ (See updated Press release).
3. Methodist Church step closer to fossil fuel divestment: In the UK, the ‘Methodist Conference has voted for the principle of withdrawing investments from fossil fuel companies whose plans are at odds with the Paris Agreement on climate change. … The Central Finance Board of the Methodist Church manages investments of £1.2bn for the Church, which includes £38.2m invested in BP and Shell alone.’ (Brightnow)
4. Japan $8.8bn ESG move: RI report ‘the $1.3 trillion Government Pension Investment Fund in Japan (GPIF) has started allocating a huge planned ¥3 trillion ($26.7bn) shift into shares with strong ESG characteristics by making an initial ¥1 trillion ($8.8bn) move into three ESG indices for Japanese equities; two run by MSCI and one by FTSE Russell. (3 July, Responsible Investor $).
5. Coal plant plans revealed: A new database reveals a ‘who’s who’ of the world’s largest coal plant developers and their expansion plans — information which has so far been hard to get for investors. RI report ($) that ‘The database (coalexit.org) has been developed by environmental NGO Urgewald. Heffa Schuecking, director of Urgewald, explains it contains many companies not usually on the finance sector radar. The divestment threshold applied by insurance company Allianz and the Norwegian Government Pension Fund refers to coal plant developers with revenue from coal higher than 30%. But in practice, this only covers a third of the top coal plant developers; the remaining two thirds are either highly diversified companies or in other sectors like oil, according to the research.’
6. ‘No legal barrier’ for UK funds on ESG investments: Law Commission: IPE.com report ‘Defined contribution (DC) pension schemes in the UK have invested much less than peers abroad in socially and environmentally beneficial investments because trustees seem unsure whether they are allowed to’ according to a new Law Commission report. Simon Howard, UKSIF CEO, writes in RI that ‘the big change in this report is a full frontal attempt to make contract-based DC schemes conform to the Law Commission’s generally excellent work on fiduciary duty, stewardship and ESG.’
7. ‘Stocks with high environmental, social and governance (ESG) scores have signalled a higher return on equity (ROE) across sectors’ according to a new research report from BofA Merrill Lynch’s US Equity & Quant Strategy team. (28 June, Responsible Investor ($))
8. Unilever pension fund has joined the Portfolio Decarbonization Coalition. This is the first Corporate Pension Fund to do so.
9. UNEP Inquiry into Sustainable Finance released two reports on Financial Centres for Sustainability, and Mobilizing Sustainable Finance for Small and Medium Sized Enterprises to support the discussions of the G7 Environment ministers.

The major story of last week was the TCFD (media round up here, all the reports here).