Investors controlling $5tn have launched the Assessing Sovereign Climate-related Opportunities and Risk project, which aims to reframe how the market evaluates government bonds in order to release climate finance to emerging markets. The project has been spearheaded by BT Pension Scheme Management and the Church of England Pensions Board. They are concerned that simplistic ESG analysis might unfairly penalise the poorest nations most affected by climate change. Middle- and low-income countries will be exempted from ESG indicators such as the requirement that nations set a net-zero target by 2050 and the gradual elimination of internal combustion engine vehicles by 2035. Richer states will be evaluated on whether or not they are maintaining their collective commitment of $100bn of annual climate finance for poor nations.
Sustainable finance for sovereign debt is less developed than in the corporate sector where ESG is well established. Investors surveyed companies on social and environmental practices, as well as governance, in their portfolio companies. ESG scores for countries have been criticised for being too closely linked to a country’s wealth. The Assessing Sovereign Climate-related Opportunities and Risk project aims to create a free, voluntary tool that assesses countries on climate change and serves as an “industry standard for net zero-aligned sovereign investing”.
The ASCOR framework proposals aim to profit investors and issuers by making it more straightforward for countries to demonstrate their climate progress and provide climate finance over time. The ASCOR framework will analyse emission pathways, climate-policy action and opportunities to finance the transition, as well as examining how much emitting a country’s production causes. The aim is to assess every sovereign-debt-issuing country against this framework.
Some indicators that might reflect the climate track record of poorer nations aren’t yet available, says ASCOR. The ASCOR tool represents an attempt to incentivise the calculation and disclosure of consumption emissions. Ms Barron, head of sustainable investment at BT Pension Scheme, stated, “We are very mindful of the north-south divide in terms of the need for capital, and in terms of responsibilities for historic and for future emissions,” adding “We want to ensure issues of justice and fairness are fairly reflected.” The ASCOR project’s advisory committee includes Europe’s largest asset manager, Amundi SA, and Franklin Templeton.
عبدالرحمان زمین پیما
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آرمان جعفری
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