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MARCH 2022 ISSUE 15TATTVAThe Elements2022 began with key framework providers for sustainability disclosure upgrading their frameworks to enable better ESGdisclosure and many securities commissions making watertight norms to avoid greenwashing. The Science Based Targetsinitiative (SBTi) has developed scope 3 target setting while EU’s expert advisors openly opposed the inclusion of gas andnuclear energy into the EU Taxonomy guidelines.www.sganalytics.com
Carbon markets seem to be all the talk for this month as IncubEx and Trayport launched a carbon marketplaceand Climate Impact X unveiled a carbon credits platform. The Global Reporting Initiative (GRI) launched newsustainability reporting standards for the coal sector. Climate Action 100 published its second annual ‘NetZero Company Benchmark assessment’ revealing results that were not up to the mark.Sustainability Accounting Standards Board (SASB) hired New Chair and Vice Chair for its Investor AdvisoryGroup. The International Financial Reporting Standards (IFRS) Foundation and the GRI signed a new agreementto integrate their financial markets and multi-stakeholder norms for sustainability disclosure.Nasdaq launched the first-ever carbon removal index for tracking carbon removal, while Chilebecame the first country to launch a sovereign sustainability-linked bond. The InternationalSustainability Standards Board (ISSB) released a proposal focusing on exposure draftsadvocating standards for climate-related disclosures and companies’ sustainability.India’s Axis Bank was fined for violating merchant bankers’ regulation and Volkswagen may recall more than100,000 cars in view of fire risk. Meanwhile, Rabobank exits Russia, causing more economic loss as a result ofthe war declared on Ukraine in February 2022.
TATTVATATTVAMARCH 2022 ISSUE 15MARCH 2022 ISSUE 153IndexMARKET TRENDS04COLLABORATION06PEOPLE MOVEMENTS08FINTECH10PRODUCTS & SERVICES12LAWS, POLICIES, AND REGULATIONS14CONTROVERSIES16www.sganalytics.com
TATTVATrends driving positiveenvironmental and social changeMARCH 2022 ISSUE 15Businesses, financial institutions, and regulatory bodies have realized the significance ofaddressing ESG risks and capitalizing on the underlying opportunities to adopt sustainability.Catch the latest developments in industries from government mandates to revolutionaryinitiatives in this section.MARKET TRENDS4www.sganalytics.com
TATTVATrends driving positive environmental and social changeBusinesses, financial institutions, and regulatory bodies have realized the significance of addressing ESG risks and capitalizing on theunderlying opportunities to adopt sustainability. Catch the latest developments in industries from government mandates to revolutionaryinitiatives in this section.EU proposes new strategies to boost sustainability intextile industryEU banks’ climate risk disclosures fail to meet ECB’sexpectationsThe European Commission (EU) launched proposals to tackle the negativeenvironmental impact of “fast fashion” which has the model of “take, make,break and throw away.” Based on the EU’s proposals, clothing would belabeled for for its environmental friendliness and the ease of recyclability. TheCommission is also targeting smartphone and construction sectors on thelines of sustainability.In an updated compliance assessment, the European Central Bank(ECB) stated that there had been improvements in climate changerisk disclosure by Euro zone banks since the late 2020 assessment.However, none of them met the ECB’s supervisory expectations.With climate regulations and environmental risk disclosuresbecoming tighter and the market’s expectancy of higher disclosure, banksneed to buck up.Source: Deutsche WelleCanada introduces CAD9.1bn investment plan to meet its2030 GHG emission reduction targetsCanada contributes to 1.6% of the global carbon emissions and is amongthe top 10 largest emitters in the world. The Canadian Prime Minister (PM)announced a CAD9.1bn investment plan to achieve its 2030 carbon reductiontargets. The PM unveiled plans to invest CAD2.9bn in zero-emission vehiclesand their infrastructure along with CAD1bn toward ‘green’ construction acrossthe country.Source: Al JazeeraMARCH 2022 ISSUE 15ESMA releases its final EU carbon market report5The European Securities and Markets Authority (ESMA), the EU’ssecurities market regulator, published its in-depth analysis ofthe trading of emission allowances and emission allowancederivatives. Based on the available data, ESMA found no majordeficiencies in the functioning of the EU carbon market. Additionally,ESMA has recommended several policies to improve market transparency andmonitoring.Source: esmaSource: ReutersSBTi removes validated carbon targets and commitmentsfrom fossil fuel companies and suppliersThe Science Based Targets initiative (SBTi) announced an altered policy inwhich it would “no longer accept commitments or validate targets from fossilfuel companies.” Companies impacted by this policy include those that have“any level of direct involvement” in the exploration, extraction, mining, and/orproduction of oil, natural gas, coal, or other fossil fuels. SBTi announced plansto introduce a new target-setting methodology that would involve peerreviewing.Source: Environment AnalystGRI launches new sustainability reporting standards forcoal sectorWith coal companies under increasing pressure regarding sustainability goals,the GRI announced new standards for disclosure. The GRI 12 aims to guidecoal companies to deliver comprehensive and comparable reporting on theeconomy, environment, and people.Source: ESG Todaywww.sganalytics.com
MARCH 2022 ISSUE 15TATTVACOLLABORATION6www.sganalytics.com
TATTVACompanies joining forces to shape sustainable solutionsESG issues continue to grow in relevance, be it employee health & safety or climate change. The impact is multi-fold in current times.Investor groups and corporates are increasingly collaborating to address such issues and drive sustainability. Following are the majorcoalitions in the ESG space.RepTrak acquires ESG Analytics, a provider of ESG dataThe RepTrak Company, one of the world’s prominent reputation data andinsights firms, acquired ESG Analytics, a Toronto-based research firm thattracks ESG for countries, corporations, and executives worldwide. By utilizingthe overlap between ESG and reputation to deliver a data-driven strategy thatfulfills a need in the market, the takeover will expand RepTrak’s reach in the ESGdomain and expedite its ESG Strategy.Source: ReptrakTo augment APAC sustainability services, ERM acquiresPoint AdvisoryPoint Advisory, an Australian climate change and sustainabilityconsultancy that provides strategic and technical assistance toorganizations, was acquired by ERM, the world’s largest pure-playsustainability advisory firm. The acquisition will improve ERM’s skillsin sustainable economics, energy, procurement, strategy, andhuman rights, allowing it to assist clients in Australia in adapting toand strategically incorporating sustainability measures.Source: The ERM International Group LimitedMARCH 2022 ISSUE 15Converging frameworks for sustainability reporting: IFRSand GRI agree to align disclosure standards7The International Financial Reporting Standards (IFRS) Foundation and theGRI signed a new agreement to integrate their financial markets and multistakeholder norms for sustainability disclosure. This alignment is a compellingstatement to financial markets and the community that a holistic disclosuremechanism for sustainability reporting that integrates financial and effecttransparency is viable on a global scale.Source: ESG TodayDHL forms major sustainable aviation fuel partnershipswith bp and NesteDHL Express has made a significant contribution toward the decarbonizationand sustainability of aircraft logistics. DHL has signed new strategic ties withAir bp (bp) and Neste to supply more than 800 million liters of SustainableAviation Fuel (SAF) to DHL Express over the next five years, making it one of thelargest SAF contracts in aviation history. DHL anticipates the proactive alliancesto save around two million tons of carbon dioxide emissions over the aviationfuel lifecycle.Source: DHLFederated Hermes partners with London’s Natural HistoryMuseum to launch Biodiversity FundFederated Hermes, a global investment management firm, announced thedevelopment of a Biodiversity Equity Fund in collaboration with the NaturalHistory Museum of the UK. The new fund will invest in a spectrum of enterprisesthat assist in the preservation and restoration of biodiversity. The two institutionsare collaborating to inspect how the Museum’s biodiversity experts and datascientists can bridge the gap between biodiversity impacts and investmentcompanies’ offerings.Source: ESG TodayMAS and CDP to collaborate to increase quality ESG dataaccessThe Monetary Authority of Singapore (MAS) and CDP signed an MOUto promote sustainability disclosures and access to high-qualityESG data across the financial sector and real economy. CDP is aninternational non-profit organization that runs one of the world’stop environmental reporting systems for companies and subnational authorities. This collaboration will enable financial firmsand corporate entities to effectively track and monitor their ESG performanceand effect.Source: Monetary Authority of Singaporewww.sganalytics.com
TATTVAMARCH 2022 ISSUE 15PEOPLE MOVEMENTS8www.sganalytics.com
TATTVAThought leadership through key hiresCompanies across the globe are demanding analysts, strategists, and knowledgeable professionals to understand and drive theirESG data, strategies, and solutions for a range of stakeholders. This section brings you the latest movements of such highly skilledprofessionals in the ESG sector.Actis extends its footprint in Japan with two senior hiresActis, a global sustainable infrastructureinvestor, expanded its operations in Japanand hired Jun Ohashi as a Partner and Headof Actis Japan and Tareq Sirhan as the Headof Energy for North Asia, based in Tokyo. Thefirm is expected to commit almost USD500mnin Japan over the next 4–5 years and exploreopportunities in Taiwan and Korea related toNew Economy Real Estate and energy transition assets.Source: ActisAbrdn forms a new ‘Sustainability Group’Officer.Abrdn created a new ‘Sustainability LeadershipGroup’ that will guide the firm’s green strategyand provide subject-matter expertise to theinvestment process. The group will be ledby the company’s former Global Head ofResponsible Investment, Amanda Young,who has been named the Chief Sustainabilityacross its investment platform and Tankwe will deliver assurance frameworksfor the firm’s sustainability commitments to customers and partners.Source: ESG TodaySASB hires New Chair and Vice Chair for its InvestorAdvisory GroupSASB hired Richard Manley, ManagingDirector, Head of Sustainable Investing at CPPinvestment as the Chair and Carine SmithIhenacho, Chief Governance and ComplianceOfficer at Norges Bank Investment as the ViceChair for its Investor Advisory Group (IAG).SASB IAG comprises leading asset ownersand managers committed to improvingsustainability-related disclosure to investors.Source: GlobenewswireJonathan Cole joins Macquarie’s GIG as CEO to lead itsnew offshore wind businessMacquarie’s Green Investment Group (GIG)launched Corio Generation, a new specialistoffshore wind business, which will be led bythe firm’s new CEO, Jonathan Cole. He willstep down from his position as the Head ofIberdrola Renewable’s Global Offshore WindBusiness to join his new position.Source: CitywireselectorMARCH 2022 ISSUE 15HSBC AM appoints Fatima Hadj and Laëtitia Tankwe for itsSustainable Investing Team9HSBC Asset Management appointed FatimaHadj as the Climate Investment Strategist andLaëtitia Tankwe as the Head of nable Investing Team. In the new roles,Hadj will lead the company’s climate changestrategy to ensure climate considerationsSource: ESG Todaywww.sganalytics.com
MARCH 2022 ISSUE 15TATTVAFINTECH10www.sganalytics.com
TATTVAInnovation in sustainable investingThe fintech section captures various innovations in the data analytics, software solutioning, and technology space that benefit bothinvestors and data providers. Learn about the most groundbreaking technologies leading their way to ESG.ESG Playbook and Native Energy join hands to provide ESGsolutions to aid businesses offset emissionsAMX inaugurates a climate reporting hub for pensiontrusteesNative Energy and ESG Playbook collaborated to offer a one-stopsolution for the sustainability needs of businesses in line with thetop ESG frameworks. The solution aims to help make a carbonreport, sustainability report, materiality matrix, and industry-leaderbenchmarks on various topics.AMX launched the AMX Zero, a low-cost climate reporting hubdesigned to collect climate-related data on behalf of pensionfunds. It also addresses the issue related to the lack of standardizedclimate data reporting to meet the increasing regulatoryrequirements regarding climate.Source: ESG TodaySource: WTWcoNormative launches free carbon emissions trackerIncubEx and Trayport unveil carbon marketplace–TVCMFocusing on small- to -medium-sized businesses, Normative, a Swedish startup backed by Google, launched a carbon emissions tracker for managingtheir carbon footprints. The free version is available through the SME ClimateHub initiative of the UN. The calculator is designed to estimate direct andindirect emissions on feeding certain data requirements, and it also indicatesthe baseline for action.IncubEx and Trayport developed The Voluntary Climate Marketplace (TVCM), afinancial product, for carbon offset projects from different offset registries. Themarketplace further enables its participants to choose specific attributes likegeography, size, type, vintage, and price on a trading platform with live offersand bids.Source: CNBCInteractive Brokers launches Carbon OffsetsInteractive Brokers launched a carbon offsetting feature, CarbonOffsets, on its IMPACT mobile app that focuses on socially consciousinvestors. The tool reports the carbon tons neutralized and helpsinvestors track the progress of reducing their carbon footprintalongside aiming to streamline the sustainable investing process.CIX introduces Project Marketplace for carbon creditsClimate Impact X (CIX) introduced its first-ever digital platform,Project Marketplace, to offer information on projects and otherrelated details to “list, compare, buy and retire carbon credits.” Itis aimed at fast-tracking the ability of the corporate sector to takeappropriate climate action.Source: BusinessTimesMARCH 2022 ISSUE 15Source: Finance FeedsSource: ESG Today11www.sganalytics.com
TATTVAMARCH 2022 ISSUE 15PRODUCTS & SERVICES12www.sganalytics.com
TATTVAIndustry demands met with sustainable investmentproducts and ESG data & servicesAs businesses work toward getting ESG-compliant and investors channel their funds into ESG products, the market is gearing up tofacilitate all forms of products and services. In this section, you will find news on key products and services including the launch ofclimate change-targeted funds as well as ESG data and services.Nasdaq launches carbon removal indexes for trackingcarbon removalNasdaq launched the CORC Carbon Removal Price Index (CORCX)along with other indexes, the first of its kind, to track the price ofremoving carbon dioxide from the atmosphere. The exchange willfollow the price of Carbon Removal Certificates (CORCs) issued by Puro. Earth,a company Nasdaq acquired in June 2021. The indexes became effective fromMarch 24, 2022.Source: NasdaqSanofi issues a dual-tranche sustainability-linked bondworth EUR1.5bnFrench healthcare giant, Sanofi S.A, issued a one-of-a-kind dualtranche sustainability-linked bond to help low- and lower-middleincome nations gain access to essential medicines. The dualtranche bond consists of two fixed-rate notes: one for EUR850mndue in April 2025 and a second one worth EUR650mn due in April2029. The framework aligns with the “Sustainability-Linked BondFramework” of the ICMA Bond Principles.Unigestion unveils a climate transition equity fundGeneva-based Unigestion launched a climate transition equityfund in line with Article 9 of the UN Sustainable Finance DisclosureRegulation (SFDR). The fund seeks to invest in companies that areclimate change compliant and will use technology to classifycompanies into two categories: ‘mitigators’ and ‘enablers’.Source: Citywire SelectorBNP Paribus issues ESG ETFs targeting medical technologyand hydrogen economyBNP Paribus Asset Management (BNPP AM) issued two ESG ETFs thatfocus on investing in medical technology and hydrogen economy.The medical technology ETF focuses on biotech and life sciencestools and services and is in line with the Article 8 of UN SFDR. Thehydrogen economy ETF tracks companies that derive proceedingsfrom the “production, supply, and storage of green hydrogen.” It isaligned with the Article 9 of the UN SFDR.Source: ETF StreamMARCH 2022 ISSUE 15Source: GlobalNewswire13Chile becomes the first-ever government to launch asovereign sustainability-linked bondChile becomes the pioneer sovereign to globally launch a sovereignsustainability-linked bond. The coupon rates of this bond are tiedto the criteria of meeting the sustainability performance goals.The bond was oversubscribed three times more than the originalvalue, with a final orderbook value of USD6bn.Source: PRNewswirewww.sganalytics.com
MARCH 2022 ISSUE 15TATTVALAWS, POLICIES, AND REGULATIONS14www.sganalytics.com
TATTVAMajor policies that pave the way to disclosure in the industryPolicy reformation and amendments in the ESG reporting space are at an all-time high. What started as a voluntary disclosure isnow making its way to becoming mandates. Be it sustainable investments standards or climate change reporting mandates andtransparency in governance practices, we bring you the latest regulatory updates in this section.IOSCO introduces 2022sustainable financeworkplanfordevelopingTo develop sustainable finance, the International Organization ofSecurities Commissions (IOSCO) on March 14, 2022, released a workplan with details. IOSCO 2022 aims to review the exposure draftproposed by ISSB and identify the vulnerabilities in the voluntarycarbon market. The authority also plans to increase its engagementactivities with national regulators and market participants.Source: LexologySEC climate disclosures mandatory for registrantsThe US Securities and Exchange Commission (SEC) on March21, 2022, announced a proposed rule that mandates climaterelated disclosures in registration statements and Exchange Actannual reports. Under the rule, registrants would require disclosinginformation regarding climate-related risks, greenhouse gasemissions, and climate targets progress reports to investors.Comments on the proposal are open till May 20, 2022, for the public.Source: JDSUPRAMARCH 2022 ISSUE 15ESMA introduces guidelines to improve transparency incarbon market15To increase market transparency in the carbon market, theESMA issued a set of guideline recommendations. The proposalincludes “transparency in over-the-counter (OTC) derivatives andchanges to position reporting requirements.” Providing informationto market participants, regulators, and the public will aid in thesmooth operation of the market.SEC is working on disclosure rules for ESG productsThe SEC is working on guidelines for ESG investing products,including include disclosure for fund managers, according to GaryGensler, the commission’s chairman. The chairman also statedthat 800 registered investment companies had achieved some ofthe ESG goals by investing in assets.Source: ESG-InvestingEC proposes new rules for product sustainabilityThe EC proposed a new rule to improve products sustainabilityacross Europe. The new proposal includes strategies for textilesto make them more durable, repairable, reusable, and recyclable.The proposal also focuses on consumer awareness regarding theenvironmental sustainability of products.Source: ESG TodayIFRS Foundation releases ISSB’s proposal draft for newsustainability and climate disclosure standardsThe IFRS Foundation released ISSB’s first ‘exposure drafts proposingstandards for climate-related disclosures and companies’sustainability’. The proposal incorporated the SASB requirementsand is based on the recommendations of the Task Force onClimate-Related Financial Disclosures (TCFD).Source: ESG TodaySource: Investment Executivewww.sganalytics.com
TATTVAMARCH 2022 ISSUE 15CONTROVERSIES16www.sganalytics.com
TATTVAGlobal sustainability watchdogs chasing wrongdoersDo companies follow their ESG commitments? Tracking corporate controversies helps in investment decisions and enables stakeholdersto determine whether the companies are being fair to their commitments or merely greenwashing. We bring you the top controversiesin this section.FSC fines three Celltrion firms KRW13bn over failure tocomply with accounting rulesin their financial statements.The Financial Services Commission (FSC) ofSouth Korea has imposed a fine of KRW6bnon Celltrion, along with KRW6.04bn andKRW992.1mn on Celltrion Healthcare andCelltrion Pharm, respectively, for violatingaccounting rules. The companies have beenaccused of misstating important informationSource: Yonhap News AgencyRabobank exits Russia over Ukraine warRabobank, the Dutch lender, and its subsidiary DLL have decided to exit Russiadue to the ongoing war with Ukraine. The company stated, “The bank doesnot want to engage business in a country with a regime that brutally invadesanother sovereign nation.”Source: ReutersMARCH 2022 ISSUE 15SEBI fines Axis Bank INR 5 lakhs for violating merchantbankers’ regulation17The Securities and Exchange Board of India(SEBI) imposed a fine of INR 5 lakhs on Axis Bankfor violating merchant banker regulations.The decision of penalizing the bank cameafter SEBI investigated the bank’s debt capitalmarket operations from August 2016 to August2019. The investigation revealed that the bankhad failed to report necessary disclosures under the regulations.Source: Zee NewsCredit Suisse board restructures post Schwan’s exitThe departure of Vice Chair Severin Schwanled to a change in the board structure ofCredit Suisse. According to the bank, Schwanwould not stand for re-election to the boardof directors at the next AGM. The directorhad faced criticism for “leading the Swisspharmaceuticals firm while acting as theVice Chair, as the bank struggled with several risk-management scandals thathit its share price.”Source: ReutersCMA criticizes banking giants Lloyds and Barclays formisleading customersThe Competition and Markets Authority(CMA) has criticized Lloyds Bank andBarclays for sharing incorrect information onthe products and services with consumers,misleading them into making wrong financialdecisions. CMA stated that both the banksbreached the rules several times by sharingwrong details about transaction and overdraft fees.Source: City A.MVolkswagen to recall over 100,000 cars due to fire riskVolkswagen Group plans to recall more than 100,000 plug-in hybrid vehiclesglobally due to fire risk. It is alleged that inadequate fastening of the enginedesign cover could lead to overheating and contact with hot parts that canthen cause fire.Source: Financial Expresswww.sganalytics.com
MARCH 2022 ISSUE 15TATTVASGA BLOGS18www.sganalytics.com
TATTVA“The U.S. & the UK Announce Ban on Russian Oil Imports; What is the Future of Global Energy Supply?”“The Top Ten Sins of Greenwashing”Read More.Read More.“Top New Energy Transitions Trends to Watch Out For in 2022”Read More.Read More.MARCH 2022 ISSUE 15“Climate Action Warriors – Top 15 Women Leaders Fighting Climate Change”19www.sganalytics.com
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insights firms, acquired ESG Analytics, a Toronto-based research firm that tracks ESG for countries, corporations, and executives worldwide. By utilizing the overlap between ESG and reputation to deliver a data-driven strategy that fulfills a need in the market, the takeover will expand RepTrak's reach in the ESG
