May 7, 2021 Read More →

Global asset managers call for uniform climate reporting metrics

IHS Markit ($):

Global asset managers, tired of dealing with multiple regimes for disclosing climate and environment-related risks, say governments need to establish a uniform, yet simple, metric for reporting that will drive investments for achieving net-zero carbon goals.

“We cannot live with 300 different standards. It should be a global one; so it’s comparable and it’s also simple,” Thomas Burberl, CEO of AXA, a French insurer that also runs an investment firm, said during a 5 May panel discussion on net-zero carbon goals organized by the Financial Times.

As more and more companies announce net-zero carbon targets and align their strategies, accurate reporting of the risks arising from climate as well as broader environmental, social, and governance (ESG) factors are needed.

Faced with pressure from governments and shareholders, asset managers like AXA, 

BlackRock, and others are incorporating climate risk into their decisions, whether that means increasing investments in companies that are developing clean technology, or supporting the manufacturing, or pulling out of fossil fuel-related investments.

Burberl said he was encouraged by the EU’s work on developing a taxonomy, which will protect against greenwashing by defining which investments are truly green. Updates to that taxonomy for the energy sector were released in late April by the European Commission (EC).

The US government lags behind the EC, but Burberl said he expects a combination of legal action and executive orders from President Joe Biden may result in development of uniform climate metrics. Burberl in fact sounded confident that the US, under Biden’s leadership on climate, would soon overtake the EU.

The US Securities and Exchange Commission (SEC) has indicated it will work with international partners on developing a common set of principles for reporting risk arising from climate and environment-related impacts.

The SEC also alerted public companies against greenwashing their credentials in an alert sent out a month ago.

[Amena Saiyid]

More: Asset managers unhappy with multiple climate disclosure regimes, seek consistency

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