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January 22, 2024

Editor’s note: climate lawsuit, cleantech investment and TNFD adoption issues

Gavel and block image
Milieudefensie says it will take ING to court if the Dutch bank does not offer a satisfactory response to its environmental demands within eight weeks (Photo: Sora Shimazaki/Pexels)

The latest edition of our Sustainable Views newsletter

Dear reader,

We launch into this week with the news that Dutch bank ING faces being hit with a lawsuit by environmental group Milieudefensie (Friends of the Earth Netherlands). The group is accusing ING of breaching its duty of care under Dutch law by providing financial backing to big carbon emitters, and is demanding that the lender slashes its carbon emissions by at least 48 per cent by 2030.

If ING does not offer a satisfactory response to its demands within eight weeks, Milieudefensie has said it will take the lender to court. In a statement, ING said it is “confident” it takes “impactful action to fight climate change”, adding that “we will of course respond in court if necessary”. Claudia has the full account here.

Claudia’s also been busy alongside Florence on this excellent piece concerning European cleantech investment. Policymakers have talked a good game about the need for greater investment in clean energy, but experts are starting to get frustrated with the EU’s lack of progress, especially in the face of competition from the US and China, which are both investing heavily in the sector. 

It is time the EU gave “a clear offer of investment” rather than “just more words at the podium”, says Ciarán Humphreys, research fellow for cleantech at Paris-based non-profit the Institute for Climate Economics.

Elsewhere, I report in our knowledge hub on how companies view the Taskforce on Nature-related Financial Disclosures. In Davos last week, it was announced that 320 companies and financial institutions were planning on producing TNFD-aligned disclosures in 2024 or 2025.

That’s all well and good, but UK non-profit Aldersgate says most companies have a poor understanding of nature and lack the capacity needed to execute these disclosures. You can find my summary and the full report here.

FRC updates corporate governance code

In today’s ESG developments, the UK’s Financial Reporting Council has published its revised corporate governance code. We reported in November 2023 about the FRC’s plans to make limited changes to the code and how more than half of the 18 original proposals for the code had been dropped. Today’s announcement confirms that revisions linked to the role of audit committees on ESG issues, expanding diversity and inclusion expectations, and expectations around how committee chairs should engage with shareholders didn’t make it into the final code.

I’ve done a fair amount of analysis on ESG shareholder proposals recently, largely considering whether there’s much point to them given the diminishing support they receive from the big US asset managers. While they’re extremely unlikely to receive majority backing at the moment, it’s still rare for companies to take action to have them removed from the voting process entirely. 

But that’s exactly what oil and gas giant ExxonMobil is doing. Exxon is suing activist group Follow This over a resolution calling for the company to increase the pace of its greenhouse gas reductions. Our colleagues at the FT have the details for you here.

Finally, there’s continued speculation over the UK’s main opposition party and its commitment to green investment. The Labour party, which is expected to enter government at this year’s planned general election, has denied rumours it is shelving its promise to invest £28bn annually in green projects. 

“The ongoing news cycle about Labour’s commitment on £28bn of public investment is quickly becoming a distraction, when the real prize is to attract hundreds of billions of private capital,” the UK Sustainable Investment and Finance Association’s CEO, James Alexander, told me over the weekend. “While public funding does of course make a difference, policymakers must remain clear-eyed about the much greater quantity of private capital available to help the UK reach net zero.”

Wishing you all a good week,

Alex

Alex Janiaud is the senior investment correspondent at Sustainable Views 

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