Before merging with UBS, Credit Suisse became a key player in the debt-for-nature market, which aims to help developing nations alleviate their debt in exchange for environmental protection.
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Before merging with UBS, Credit Suisse became a key player in the debt-for-nature market, which aims to help developing nations alleviate their debt in exchange for environmental protection. While the practice may pose significant greenwashing risks, Credit Suisse played a major role in reviving interest in these financial instruments, such as the largest ever debt-for-nature swap — a $364 million deal for Belize in 2021 — and another $150 million deal for Barbados last year. Other efforts they were involved with included the World Bank's $150 million "rhino bond" for black rhino conservation in South Africa, and a commitment to spend over $300 billion in sustainable financing by 2030.
As UBS acquires the failed bank — and its associated emissions burden — the new management plans to downsize the firm's investment banking division. This could result in a diminished focus on sustainable finance, making it increasingly challenging for nations to locate lenders open to participating in debt-for-nature swaps.
Hidden in plain sight
The SEC will soon release a final rule requiring public companies to make climate-related financial disclosures. But many carbon-intensive companies are not publicly registered and don’t provide even basic operations, financials, or investor risk information. Even worse, some public companies are moving their carbon-intensive operations out of the public markets.
A new report by Center for American Progress describes how exemptions from the public disclosure and reporting framework have grown dramatically in recent years, enabling private funds and companies to raise money from a wide swath of the public without disclosing essential information about risks that can affect their financials, like climate-related risks. This alarming trend could harm investors and distort capital formation as the economy transitions to clean energy.
Texas targets insurers
Texas lawmakers, fresh from attacking asset managers, have a new target in their sights: the insurance industry. The chair of the House insurance committee, Rep. Tom Oliverson, wants to strip the insurance industry’s ability to consider longer-term climate and other risks. Which, last time we checked, is what insurance and risk assessment is all about. While the insurance industry has a history of crying wolf at any new hint of regulation, laws like the Texas one are the real threats coming for the industry’s DNA of evidence-based risk assessment. But trade bodies like the American Property Casualty Insurance Association undermine their own message when they oppose greater climate risk oversight and regulation.
(Some) Oil & gas too risky, says Chubb
Chubb, one of the world’s largest insurers, put new limits on some of its oil and gas business. Chubb will tighten its requirements on policies for oil and gas producers to demand reductions of methane emissions, as well as stop underwriting oil and gas extraction projects located in specific protected areas. Chubb CEO Evan Greenberg’s decision may kick-start a new climate race among insurers. More from Insure Our Future here.
As expectations mount for other major insurers such as AIG and Liberty Mutual to follow suit, it will be interesting to see how key proxy votes at insurance giants this year unfold against a backdrop of action at the state level. New activist proposals requesting firms set net-zero targets will be voted on at the annual meetings, while a bill in Connecticut proposes a surcharge on insurers that underwrite fossil fuel, and coordinated state-level anti-ESG attacks pressures the industry as a whole.
Mar 28: Senate Banking hearing on Recent Bank Failures and the Federal Regulatory Response (10am ET)
Mar 29: House Financial Services hearing on The Federal Regulators' Response to Recent Bank Failures (10am ET)
Mar 30: An E3G presser covering essential background and context ahead of the World Bank and IMF Spring Meetings. Register here.
Mar 30:Poynter training on Private Equity for journalists - use the promo code 23POYSTAFF100 for free access - recommend this one for everyone relatively new to Private Equity, which plays a huge role in fossil fuel investment.
Apr 10-16: 2023 Spring Meetings of the International Monetary Fund and the World Bank Group.
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