The overhaul of the global energy system may represent the single biggest investment opportunity in history, reports the Financial Times.

However, as the energy transition becomes more urgent, responsible investors need to think less about these ratings and more about outcomes, says Dr Ben Caldecott.

“What do ESG scores tell us about anything?” he asks. “They are mainly measuring processes and policies — if a company has a policy in place against deforestation it will get a good score, even if it is deforesting.”
 

The UK plans to allow some natural gas projects to be labeled as sustainable in its green investment rulebook due to be published later this year.

“Natural gas is not ‘green’ and its inclusion in the EU green taxonomy has completely discredited it,” said Dr Ben Caldecott. “We can have a robust, science-based green taxonomy that is adopted worldwide because it is trusted by the market, thereby supporting UK leadership in green finance, or we can end up with something that is irrelevant..."

The Oxford Sustainable Finance Group (OxSFG) recently launched an independent assessment of data quality within sustainable finance, dubbed the Sectoral Data Quality and Integrity Project. OxSFG believe that providing clear sector-specific guidance on data quality and characteristics will help improve and align the datasets that underpin different reporting and analytical frameworks.

Canada started taking orders for its inaugural green bond amid a renewed global push to reduce dependence on fossil fuels after the Russian invasion of Ukraine brought reliance on non-renewable sources of energy back into the spotlight.

The IKEA Foundation is supporting, with a grant of £4.5 million over three years, four key University of Oxford Sustainable Finance Group projects, aimed at making a significant contribution to aligning finance and the financial system with the goals of the Paris Agreement.