The number of ‘dirty deals’ between UK banks and fossil fuel firms surged in 2020 despite financial bosses pledging to be more climate conscious, as rare wildlife and vulnerable habitats overseas are given an £8 million funding boost. Meanwhile, companies must commit to a 2050 net zero target before bidding for government contracts under new rules, Liontrust launches its first ESG Investment Trust, and Scotland’s biggest local government pension fund is to drop investments in fossil fuel firms which fail to meet environmental standards. It’s the Good With Money weekly newsbrief.
Surge in ‘dirty deals’ between banks and fossil fuel firms
The number of ‘dirty deals’ between Britain’s biggest banks and the world’s largest fossil fuel companies surged in 2020, new data reveals.
UK lenders Barclays and HSBC made dozens of deals with major fossil fuel companies such as ExxonMobil, Royal Dutch Shell and Chevron in 2020, according to the analysis. The value of transactions was up from the previous year, despite financial bosses pledging to be more climate conscious.
Barclays, Europe’s largest fossil fuel financier, lent $5.1 billion (£3.7 billion) to ExxonMobil over 13 deals and $1.2 billion (£850 million) to Shell over six deals in 2020, according to Reclaim Finance, a group campaigning for an end to financial support for fossil fuels.
£8m boost for biodiversity hotspots
Rare wildlife and vulnerable habitats are to benefit from an £8 million boost to conservation in the UK’s Overseas Territories.
Over the next three years the money will go to projects in territories including Tristan da Cunha, the Falklands, South Georgia and the Caribbean.
The announcement follows a commitment by G7 nations including the UK to reverse the loss of biodiversity by 2030. The Darwin Plus funding from the Government will be used to help sei whales and southern right whales off the Falklands, wandering albatrosses in the South Atlantic and green turtles on Ascension Island.
Other projects include studying sharks off the Caribbean island of Anguilla and protecting rare species on the Cayman Islands. Lord Goldsmith, International Environment Minister, said: “The funding will support the magnificent biodiversity hotspots so threatened by climate change.”
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Companies must commit to net zero for government contracts
Businesses must commit to the UK’s 2050 net zero carbon emissions target before they can bid for major government contracts under new rules.
They will also have to publish “credible” carbon reduction plans setting out their existing greenhouse gas emissions such as fuel usage, power consumption and staff travel.
The measures will be put in place by September for contracts worth more than £5 million, making the UK government the first in the world to require such commitments.
Cabinet Office minister Lord Agnew said: “The Government spends more than £290 billion on procurement every year, so it’s important we use this purchasing power to help transform our economy to net zero.”
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Liontrust launches ESG Investment Trust
Sustainable investment specialists Liontrust has launched its first ESG Investment Trust.
The trust – called Liontrust ESG Investment Trust – will invest in 25 to 35 companies around the world that it deems sustainable, mostly in developed markets.
Investment trusts allow you to pool your money with that of other investors to access a range of assets through a single investment. They are set up as companies and traded on the London Stock Exchange.
Liontrust’s new trust will be managed by Peter Michaelis, Simon Clements and Chris Foster, who are currently part of the firm’s sustainable investment team.
It will be managed using Liontrust’s ‘sustainable future’ investment process, which identifies companies “helping to create a cleaner, safer and healthier world”.
Current trends in this sector that the trust will focus on include better resource efficiency, greater safety and resilience and improved health.
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Local government pension fund to divest from fossil fuels
Scotland’s biggest local government pension fund is to drop investments in fossil fuel firms which fail to meet environmental standards.
The Strathclyde Pension Fund, which is worth £24 billion and has around 250,000 members, will become one of the first major funds in the world to adopt such a divestment policy.
Members of the Strathclyde Pension Fund Committee have agreed the move in response to a call from Glasgow City Council – the fund’s biggest employer member.
It comes as city readies itself to host the Cop26 climate change conference this November.