January 2024 Newsletter

1 Feb

Written By Kate Pruden

Please see our latest ESG updates and articles for January.

Three PRI Updates:

Danesmead ESG is delighted to announce that Daniella Woolf, has been selected as a member of the PRI's Hedge Fund Advisory Committee. This opportunity will help us to advocate for over 30 of our hedge fund clients who are PRI signatories, ensuring their voice is heard as it relates to the design, delivery, and dissemination of hedge funds guidance to help implement the Six Principles, including reporting and assessment. If you have any topics you’d like us to raise at the next Hedge Fund Advisory Committee meeting, please let us know.
We anticipate the PRI will release the 2024 PRI Reporting Modules in the next 2-3 weeks, which will kick off the 2024 PRI reporting season. For PRI reporting clients, we will be in touch soon to set out the reporting timeline for this year. If you’d like to discus, do let us know.
The PRI In Person Conference is taking place in Toronto 8-10 October. We will be there! Let us know if you are going to be there too so we can include you in side-events.

Danesmead ESG at PE Wire 2024

Catch our founder Daniella Woolf at Private Equity Wire European ESG Summit in London on 28th February 2024. She’ll be talking about ESG Reporting Requirements in 2024. From SFDR and SDR to ISSB and TCFD, there's a lot of new information to digest, particularly for alternative asset managers. Find out more about the event here.

FRC - Updates to UK Corporate Governance Code

The Financial Reporting Council (FRC) published its revised UK Corporate Governance Code on 22nd January 2024. The main updates to the code relate to internal controls; an FRC policy update in November had already hinted that most changes proposed during the consultation process would not be progressed. The change means that, from 2026, company boards must explain, in their annual report, their process for monitoring and reviewing the effectiveness of internal controls. Boards must also make a declaration on the effectiveness of material controls. The FRC has stated that the changes seek to enhance trust and confidence in governance while supporting economic growth and competitiveness.

BlackRock sued by Tennessee for “deceiving consumers” about ESG investing

let us knowTennessee’s Attorney General has launched a consumer protection lawsuit against investment giant BlackRock, alleging the company misrepresented its use of ESG considerations in both sustainable and non-sustainable investment strategies. The complaint asserts that BlackRock deceived consumers about its commitment to ESG goals while making conflicting statements about the impact of ESG on its decision making. The lawsuit focuses on BlackRock's engagement and proxy voting for climate-related objectives, with the firm being accused of overstating the extent to which ESG considerations influence financial positioning. BlackRock will contest the accusations levelled at the organisation.

New Hampshire bill attack on ESG

New Hampshire legislators are proposing two bills to restrict ESG investing of state and taxpayer funds. One bill, introduced in the House of Representatives, seeks to make it a felony to “knowingly” invest state funds using ESG criteria deemed to violate fiduciary duty. The other bill, introduced in the State Senate, specifies that fiduciary actions must not further social, political, or ideological interests beyond legal limits. The first bill proposes that the New Hampshire Retirement System would be unable to invest with firms that “consider environmental, social and governance (‘ESG’) criteria”; since governance is tied up in fiduciary duty for many investors, it is unclear whether it would be possible for the state to fully exclude firms which pay attention to ESG considerations. Collectively, the bills have been criticised for conflicting with existing laws. There are concerns that the bills could result in uncertain administrative charges and potentially damage investor returns.

Principles for GHG-Emission Accounting in Alternative Strategies

The Standards Board for Alternative Investments (SBAI) has introduced a new set of principles for greenhouse gas emission accounting in alternative investment strategies. The new principles expand upon existing frameworks to incorporate derivatives and short positions into greenhouse gas emission accounting, with the aim of standardising accounting practices across assets including equities, bonds, loans, and real estate. The framework emphasises measuring greenhouse gas emission risk exposure and sustainability impact. The data generated from greenhouse gas emission accounting can aid in monitoring greenhouse gas-related risks, tracking progress toward reduction targets, and reporting to stakeholders.

As always, let us know if you’d like to discuss any of these in more detail.