By Kate Abnett and Simon Jessop
BRUSSELS/LONDON (Reuters) – The gas and nuclear industries have ramped up lobbying to secure last-ditch changes to European rules defining which investments are sustainable, fearing that exclusion from a new “green” list could deprive them of billions of dollars of funding.
The climate section of the EU’s Sustainable Finance Taxonomy is due to be finalised this year and it could prove crucial as nuclear power and most natural gas plants and pipelines were excluded from a provisional list published in March.
By forcing providers of financial products to disclose which investments meet climate criteria from the end of 2021, the new EU green finance rules are designed to channel cash towards projects that support the bloc’s climate goals.
In the four months since the rules were published, gas and nuclear industry representatives held 52 meetings – in person or virtually – with EU officials, according to EU logs analysed by non-profit Reclaim Finance and shared exclusively with Reuters.
Overall, industry representatives have held a total of 310 meetings with EU policymakers since the start of 2018, according to the data based on transparency filings published by July 8.
Nuclear groups in particular have stepped up their lobbying, Of the 36 meetings they’ve held over the past two-and-a-half years, 10 have taken place since March.
Brussels is facing calls to use the rules to guarantee spending from its 750 billion euro ($888 billion) COVID-19 recovery fund goes to green projects. The money starts flowing in 2021, meaning any delay to the rules could thwart this plan.
‘NEED TO BREAK FREE’
Climate campaigners urged the EU not to bow to pressure from the oil and gas industry as the stakes were too high.
“If EU institutions and member states are serious about building a sustainable Europe that confronts the climate emergency, they need to break free from fossil-fuel lobbyists,” said Paul Schreiber, a campaigner at Reclaim Finance.
One of the main gripes of both energy industries is that they were locked out of the group of finance experts that came up with the proposals released in March.
A new EU sustainable finance platform will take over as the European Commission’s advisor on taxonomy next month – and both industries are jostling to be included on the panel.
Rebecca Vaughan, an analyst at InfluenceMap, a non-profit whose lobbying data is used by investors, said the platform was probably the gas industry’s “last shot” at changing the rules.
All four gas and nuclear lobby groups interviewed by Reuters have applied to be part of the sustainable finance platform, along with more than 500 other applicants.
The current expert group – whose 35 members include asset managers, non-governmental organisations, banks and two energy industry representatives – has said gas power plants should only be labeled “sustainable” if they meet strict emissions limits.
Experts say those limits would certainly be breached unless the industry captures the greenhouse gases it produces while “green” hydrogen could play a significant role.
Investments to expand gas pipelines would also not be labeled sustainable, though infrastructure earmarked for the use of hydrogen generated with renewable energy could be.
The International Association of Oil & Gas Producers (IOGP), Eurogas and FuelsEurope lobby groups all told Reuters the sustainable finance rules should acknowledge more incremental cuts in emissions.
“The report was drafted, in a way, like we need to transition tomorrow,” said Kamila Piotrowska, IOGP senior manager for policy strategy. “This is a journey and we need these transitional activities.”
They want the taxonomy to include a list of so-called transitional activities, including gas power plants, which some EU member states are looking to use as they move away from a heavy dependence on more-polluting coal-fired power stations.
Lobby groups, including Eurogas, also want pipelines to be classed as sustainable, if they can be converted to low-carbon gas at some point in future.
“There’s a real danger that that means the existing (gas) plants in Europe could be deemed not sustainable and therefore unable to raise any finance for anything,” said John Cooper director general of refining industry association FuelsEurope.
FuelsEurope and IOGP have also asked the Commission to consider extending the deadline for companies to comply.
Asked whether transitional activities might be included, a European Commission spokeswoman said in an emailed statement to Reuters that it was exploring all the arguments on what should be included, based on the recommendations of its expert group and feedback from the industry.
‘IT’S TOO LATE’
The EU’s expert group says its criteria are science-based and designed to give incentives to bring about the rapid emissions cuts needed to give the world a chance of avoiding catastrophic climate change.
“A lot of people still think the transition is about incremental small steps, and it’s too late for that, unfortunately,” said Helena Vines Fiestas, global head of stewardship and policy at BNP Paribas Asset Management and a member of the expert group.
Nuclear industry groups say the energy deserves a sustainable label, based on its low carbon emissions and existing secure waste disposal sites.
They fear that if nuclear isn’t deemed sustainable, the cost of capital for power plants will rise – a concern for an industry where flagship projects, such as Britain’s Hinkley Point C reactor, are struggling with spiralling costs.
To help get the message across, several nuclear lobby groups enlisted the help of the public, tweeting to encourage responses to an EU consultation in April on the proposed rules – and suggesting what to write.
That helped generate 126 responses to the EU consultation from concerned citizens asking for nuclear power to be termed sustainable – nearly a third of all the responses received, according to InfluenceMap analysis.
The expert finance group was split on how to brand nuclear power and the Commission has now asked its scientific arm to report on the issue next year.
Lobby groups told Reuters they were confident nuclear power would ultimately be considered sustainable, but they want the energy section of the taxonomy delayed until the report is done.
The spokeswoman for the Commission said it was still planning to finish the sustainable finance rules this year, though they could be amended at a later date to accommodate nuclear, depending on the outcome of the scientific report.
(Reporting by Simon Jessop in London and Kate Abnett in Brussels; Editing by David Clarke)
UAE Makes Appointments to Investment Body, UN Aviation Group – BNN
(Bloomberg) — The United Arab Emirates appointed new heads to several federal committees, as well as a permanent representative to the International Civil Aviation Organization.
The UAE’s prime minister, Mohammed Bin Rashid Al Maktoum, named Thani Ahmed Al Zeyoudi as head of the federal committee for direct investment, according to the official news agency WAM. Saeed Mohammed Al Suwaidi was named as permanent representative for the UAE at the United Nations’ civil aviation body known as ICAO, WAM reported.
©2020 Bloomberg L.P.
Canadian Securities Regulators Publish Liquidity Risk Management Guidance for Investment Fund Managers – Canada NewsWire
TORONTO, Sept. 18, 2020 /CNW/ – The Canadian Securities Administrators (CSA) today published guidance to help investment fund managers develop and maintain effective liquidity risk management frameworks for investment funds.
For the purposes of this guidance, liquidity risk is the risk that a fund is unable to satisfy redemption requests without having a material impact on the remaining securityholders. A fund must be able to sell the underlying portfolio assets within a reasonable amount of time, in an orderly manner to satisfy redemption requests. Liquidity risk can increase when the liquidity of portfolio assets held by an investment fund does not match the redemption terms and conditions offered to its investors. In recent years, the management of this potential liquidity mismatch has been a key focus for regulators internationally and the asset management sector.
“Taking a preventative and proactive approach to liquidity risk management is critical to ensuring such risks are appropriately managed,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “We are publishing this guidance to support investment fund managers in their ongoing development and maintenance of robust, effective liquidity risk management frameworks.”
The guidance contemplates normal and stressed market conditions, such as the global financial crisis in 2008 or the COVID-19 pandemic, and is based on existing regulatory requirements. It also recognizes that liquidity risk management is not “one-size-fits-all.” Investment funds vary in size, structure, investor base and other fund characteristics, and what may be considered a material risk for one fund may not be material for another.
While the guidance is intended for investment funds that are subject to National Instrument 81-102 Investment Funds, many of the practices and examples outlined may be relevant to other investment funds.
Under securities legislation, investment fund managers must establish and maintain an effective liquidity risk management framework and exercise due care, skill and diligence in managing the liquidity of their funds.
Investment fund managers should contact the securities regulator in their principal jurisdiction to discuss any questions or concerns.
The CSA encourages investment fund managers to consult the global liquidity risk management recommendations developed by the International Organization of Securities Commissions (IOSCO). These recommendations are designed to help fund managers respond to stressed market conditions.
As part of its ongoing continuous disclosure review program, the CSA will continue to monitor the liquidity risk management of funds.
The CSA, the council of the securities regulators of Canada’s provinces and territories, co- ordinates and harmonizes regulation for the Canadian capital markets.
For Investor inquiries, please refer to your respective securities regulator. You can contact them here.
For media inquiries, please refer to the list of provincial and territorial representatives below or contact us at [email protected].
For more information:
Jason (Jay) Booth
Nunavut Securities Office
SOURCE Canadian Securities Administrators
Manulife Investment Management earns top scores from United Nations-supported Principles for Responsible Investment – Canada NewsWire
C$ unless otherwise stated
TSX/NYSE/PSE: MFC SEHK: 945
An A+ was awarded for the strategy and governance, listed equity incorporation, and fixed-income SSA modules
TORONTO, Sept. 18, 2020 /CNW/ – Manulife Investment Management announced today that it has been recognized with top scores from the United Nations-supported Principles for Responsible Investment (PRI) annual assessment report. For the second year in a row, Manulife Investment Management received a score of A+ for strategy and governance from the PRI for integrating environmental, social, and governance (ESG) considerations into investment practices across a range of asset classes. An A+ was also awarded in the listed equity and fixed-income sovereign, supranational, and agency (SSA) integration modules.
Other notable achievements included:
- Manulife Investment Management’s public markets received an A in all other direct investment and active ownership PRI modules for which it was assessed. Other modules covered its investments in corporate bonds and securitized debt. Manulife Investment Management saw notable increases in its scores as compared to 2018 in areas such as: communications regarding ESG screens, and integration and implementation of analysis of the ESG information for internally managed listed equity holdings. There was also improvement in the number of companies engaged with and the intensity of engagement and effort. Similarly, for fixed income, Manulife Investment Management saw improvements in the integration and implementation of the ESG issues reviewed and its disclosure of approach with the public. For securitized, an outcome of either financial/ESG performance was also noted as an additional assessment indicator.
- Manulife Investment Management’s private markets continued to be recognized as a leader with real estate receiving an A for the third consecutive year under the property module. In addition, Manulife Investment Management demonstrated its commitment to sustainable investing within private markets by expanding the scope of the assessment in 2019 to include submissions for infrastructure and private equity, achieving a B in each respective module.
“Manulife Investment Management strives to be a leader in ESG investment practices as a responsible steward of client capital,” said Christopher P. Conkey, CFA, global head of public markets, Manulife Investment Management. “We are very proud of our investment teams for achieving an A+ for ESG strategy and governance for the second year in a row and for earning superior marks in the screening, integration, and engagements modules for listed equities and in direct fixed-income SSA. This is not only important for our clients who entrust us to implement ESG for specific portfolio goals, but also for the overall relevance of our strategies as we look to the future of investment management.”
“Sustainability is one of the keys to creating long-term value for our clients within private markets,” added Stephen J. Blewitt, global head of private markets. “It is important for us to consider sustainability because we’re generally long-term investors across a diverse range of private markets asset classes and submitting to the PRI is an opportunity for us to demonstrate transparency while tracking our progress. It is rewarding for the work we have done to be recognized.”
The key activities within Manulife Investment Management’s investment teams in 2019, which helped to achieve the PRI scores include:
- The release of its inaugural sustainable and responsible investment report in 2019.
- Increased integration in industry analysis, sovereign analysis, and securitized fixed income. Manulife Investment Management developed a proprietary sovereign ESG assessment model in 2019, which is currently in use by its investment teams as an input into credit analysis. The model produces sovereign-specific baseline views on ESG issues.
- The use of scenario analysis—a key tool for companies in demonstrating planning for climate change.
- Engagement with 724 companies in 940 separate engagements across all investment teams. In 2019, 26% of engagements had an environmental factor focus, 20% had a social factor focus, and 54% had a governance factor focus.
For more information on Manulife Investment Management, please visit manulifeim.com/institutional
About Manulife Investment Management
Manulife Investment Management is the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our leading capabilities in public and private markets are strengthened by an investment footprint that spans 17 countries and territories. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We’re committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement.
As of June 30, 2020, Manulife Investment Management had CAD$900 billion (US$660 billion) in assets under management and administration. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.
SOURCE Manulife Investment Management
For further information: Media contacts: Brooke Tucker-Reid, Manulife Investment Management Canada, 647-528-9601, [email protected]; Elizabeth Bartlett, Manulife Investment Management US and Europe, 857-210-2286, [email protected]; Carl Wong, Manulife Investment Management Asia, 852-2510-3180, [email protected]
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