“EBRD and EU join efforts to boost green finance” – EBRD – June 30, 2020

On June 30, 2020 the European Bank for Reconstruction and Development (EBRD) and the European Union (EU) announced that they “are stepping up their support for green investments and climate resilience in Egypt, Morocco and the countries of the Eastern Partnership (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine).

The EU is providing a total of €61.3 million in grants to support three EBRD programmes helping businesses invest in energy efficiency, cut their carbon footprint, introduce innovative green technologies, support the circular economy and improve legal frameworks for energy and resource efficiency investments.

In Egypt, a €24.8 million grant from the EU will support the EBRD’s Green Energy Financing Facility (GEFF), which focuses on supporting energy-efficient and renewable energy investments through local financial institutions for lending on to private companies.

Similarly, in Morocco, GEFF will benefit from a €21.1 million EU grant that will allow local businesses to invest in green technologies. Beneficiaries will reduce their costs by implementing climate adaptation measures, energy-efficient and renewable-energy technologies, thus also improving their overall competitiveness.

In the Eastern Partnership region, €15.4 million from the EU4Climate initiative will be channelled through the EBRD’s Finance and Technology Centre for Climate Change  (FINTECC) programme to corporate sector clients via investment grants, technical assistance and the offer of climate innovation vouchers, which are expected to accelerate the adoption of innovative climate technologies and sustainable business practices.

The EBRD is a pioneer in financing projects that promote renewable energy and combat climate change. To date, the EBRD has signed €34 billion in green investments, financed more than 1,900 green projects and reduced over 102 million tonnes of carbon dioxide emissions.”

You may read the press release on the news page of the EBRD internet site.

 

“Denmark’s PFA says sustainable investment does not harm returns” – Investment & Pensions Europe – June 29, 2020

On June 29, 2020 Investment & Pensions Europe reported that “(t)he chief strategist of DKK688bn (€92bn) Danish pension fund PFA has set out a series of arguments to show that investing sustainably does not jeopardise returns, and said firms with top environmental, social, and governance (ESG) credentials outperformed in the worst of the COVID-19 crisis.

Tine Choi Danielsen, chief strategist at the Nordic country’s second-biggest pension provider, said:  ‘If you look at the development, there is no doubt that sustainable and responsible companies have performed at least as well as the remaining in the stock market – and in some periods even noticeably better.’

She said history, the fund’s own experience and societal trends showed returns on investments were not compromised when investing responsibly and sustainably.

In the coronavirus crisis, companies with high environmental, social and governance (ESG) standards outperformed the overall market, and in emerging markets in particular, sustainable companies had returned more than the index over the last few years, she said in a commentary on the commercial mutual provider’s website.

Choi Danielsen said since index provider MSCI launched the ESG Leaders version of its All-Country World Index, the return difference between the ESG-filtered and standard indices had grown to around 20 percentage points in favour of the ESG Leaders.

However, stripping out emerging markets from both indices would trim that return premium to just 0.5 percentage points, she said.

In emerging markets, Choi Danielsen explained, a high ESG score resulted in a wider return advantage than it did in developed markets, partly because of the greater variation in ESG development which existed in the corporate scenes of emerging markets.”

You may read the article on the Investment & Pensions Europe internet site.

You may read PFA’s responsible investment policy on the PFA internet site.