ERISA, European Banking Authority, Paris Accord, and Politics
Here are 5 things you might have missed this week:
ERISA Rule to Curb Sustainable Investing by Pension Funds-
U.S. Labor Department finalizes rule on The Employee Retirement Income Security Act of 1974 (ERISA).
The U.S. Department of Labor finalized a rule clarifying that pension fund managers must put retirees’ financial interests first when allocating investments, rather than other concerns such as climate change or racial justice.
ImpactAlpha reports: "The rule drew more than 8,700 comments in a shortened 30-day comment period, with more than 95% opposing it, including all but one of 86 asset managers who filed comments."
European Banking Authority is Looking to Integrate ESG into Regulation and Supervision-
The new paper provides a comprehensive proposal on how ESG factors and ESG risks could be included in the regulatory and supervisory framework for credit institutions and investment firms.
The EBA stated that this integration could be accomplished by evaluating the long-term resilience of institutions’ business models, setting ESG risk-related objectives, engaging with customers, and considering the development of sustainable products.
The EBA consultation runs until 3 February 2021.
Source: https://www.esgtoday.com/eba-launches-consultation-paper-on-integrating-esg-risks-into-regulatory-framework/ & https://eba.europa.eu/eba-launches-consultation-incorporate-esg-risks-governance-risk-management-and-supervision-credit
Global Investor Group Urges the United States to Rejoin Paris Climate Accord-
A group representing European and U.S. investors with a collective $30 trillion in assets urged the current US government to rejoin the Agreement.
The group's members, including big investors such as New York-based BlackRock Inc, the world’s largest asset manager, warned that the United States risked falling behind in the race to create a cleaner global economy by leaving the 2015 Paris Agreement.
Democratic presidential candidate Joe Biden said that he would take the country back into the Paris accord.
Investment Manager Selection, Appointment, and Monitoring-
PRI has published a guide toolbox for asset owners and investment managers.
The guides will act as road map for asset owners to thoroughly embed ESG issues in their investment processes and at the core of the relationship between them and investment managers.
Modules highlight the asset owner leaders that have a thorough and systematic process for investment manager selection.
An Investor Guide to Negative Emission Technologies and the Importance of Land Use-
Unlocking new business models and investment opportunities for avoided deforestation, reforestation, and land restoration.
An entirely new industry and asset class is emerging that values carbon stored in vegetation and soil, according to Vivid Economics.
Negative Emission Technologies (NETs) are the next investment frontier and offer trillion-dollar upside opportunities for investors.
The report provides transparency around NETs assumptions of climate scenarios and corporate net-zero commitments, presents risks and uncertainties associated with NETs, and assesses what upside opportunities NETs can offer to investors.
One more thing: Ranking: Top 10 Fund Houses Committed to ESG. The H&K Responsible Investment Brand Index 2020 highlights the asset managers that are leading the way with their commitment to ESG.
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