In this week’s edition of Economy and Society:
- EU regulators propose ESG stress test standards
- Oregon governor signs ESG investing law
- New York governor promotes nuclear power to meet carbon goals
- ESG legislation update
- Sierra Club pulls investments from BlackRock
- Northern Trust hires UN pension chief
Around the world
EU regulators propose ESG stress test standards
What’s the story?
Three EU financial regulators—the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities and Markets Authority—have proposed new rules requiring national banking and insurance regulators in member states to apply consistent ESG standards in their future stress tests.
Why does it matter?
EU members already include ESG in financial stress tests, but the proposed rules would set new standards for consistency across the Union.
Read more
According to Law360:
National regulators use supervisory stress-testing to assess whether finance firms can resist severe shocks, including from ESG-linked risks.
“Aiming to foster a consistent and long-term approach to ESG stress-testing, the draft guidelines are designed to accommodate future methodological advancements and improvements in data availability,” the watchdogs said in a joint statement. …
National regulators should apply the proposed guidelines when undertaking supervisory stress-tests focused on ESG, according to the watchdogs. They should also keep their approach to ESG stress-testing under review as new ways of measuring exposure to risk become available, the watchdogs added.
In the states
Oregon governor signs ESG investing law
What’s the story?
Oregon Gov. Tina Kotek (D) signed the Climate Resilience Investment Act on June 26, directing the state’s $96 billion Public Employees Retirement System to study the effects of its investments on climate change and to “pursue the goal of reducing the carbon intensity of the fund.”
Why does it matter?
The law is among the first to directly require ESG investments in a pension system. Other large pensions like CalPERS, CalSTRS, and the New York City pension system have promised to use what they call sustainable investing standards but aren’t bound to such commitments under the law.
What’s the background?
To see other laws requiring nonfinancial considerations in investing, proxy voting, and disclosures in Ballotpedia’s ESG legislation tracker, click here.
Read more
According to Pensions & Investments:
“The Climate Resilience Investment Act is a clean-energy investment law, not a divestment mandate,” Treasurer Elizabeth Steiner said in a news release June 17. The bill “protects employee retirement funds by enabling Treasury’s investments to take full advantage of the opportunities the clean-energy transition creates.”
The bill directs the Oregon Investment Council, which manages the $96 billion Oregon Public Employees Retirement Fund, Tigard, and the state treasurer, to “pursue the goal of reducing the carbon intensity of the fund,” the bill said. They are being asked to prefer investments that reduce greenhouse gas emissions, the bill said. …
The bill requires a progress report every two years by the state treasurer and pension system to the Legislature on efforts to address climate change’s impact on the pension fund’s portfolio.
New York governor promotes nuclear power to meet carbon goals
What’s the story?
New York Gov. Kathy Hochul (D) directed the New York Power Authority (NYPA) to site, develop, and build an advanced nuclear power plant—the first new U.S. nuclear facility announced in 15 years.
Why does it matter?
The planned plant would have a capacity of at least one gigawatt, enough to power roughly a million homes. Hochul argued the plant’s carbon-free power would help New York meet its clean energy goals.
Read more
According to SenecaESG:
The initiative reflects a growing recognition of nuclear power’s ability to deliver reliable, around-the-clock clean energy. As intermittent renewable sources like wind and solar expand, nuclear energy offers a stable foundation to maintain grid reliability while supporting aggressive decarbonization targets. …
The project will begin with comprehensive feasibility studies in collaboration with the Department of Public Service (DPS), focusing on advanced reactor technologies, financing models, and site selection. Public-private partnerships will be central to advancing development, financing, and long-term operations.
This nuclear expansion builds on ongoing state support for early permitting at Constellation’s Nine Mile Point Clean Energy Center and paves the way for broader regional collaboration with other U.S. states and Ontario. Such partnerships aim to accelerate nuclear deployment, workforce development, and resilient supply chains essential for long-term ESG and carbon neutral strategy success.
ESG legislation update
Eight states took action on 10 ESG-related bills last week (since June 24). Legislation was enacted in Oregon. Bills passed both chambers in Florida, Ohio, New Hampshire, and North Carolina.
States with legislative activity on ESG last week are highlighted in the map below. Click here to see the details of each bill in the legislation tracker.
On Wall Street and in the private sector
Sierra Club pulls investments from BlackRock
What’s the story?
The Sierra Club Foundation, which sponsors the environmental organization, announced plans to pull more than $10 million in investments from BlackRock, arguing the firm has failed to address climate change through its investments.
Why does it matter?
BlackRock, the world’s largest asset manager, faces pressure from both ESG opponents and supporters. Opponents criticize the firm’s past ESG advocacy and ongoing sustainability practices, while supporters argue it has publicly shifted away from ESG and continues investing in fossil fuels.
Read more
According to Bloomberg:
“Climate risk is financial risk,” said Paul Rissman, an emeritus board member of the Sierra Club Foundation, in an announcement on Wednesday. BlackRock has failed to “support real-world decarbonization through stronger stewardship practices” he said. …
The group said it decided to withdraw $10.5 million of funds — a tiny fraction of BlackRock’s $11.6 trillion assets under management — in part because of the company’s exit from the Net Zero Asset Managers initiative in January. …
Once seen as a vocal leader in sustainable investing, BlackRock has shifted its strategy after coming under fire from Republicans and conservative activists. The New York-based firm said earlier this month that it plans to shut several US-based sustainable funds as part of a wider review of its investment products and based on the “evolving needs” of clients.
Northern Trust hires UN pension chief
What’s the story?
Northern Trust—one of the world’s largest asset managers with about $1.3 trillion in assets under management—hired Pedro Guazo, former head of the $100 billion United Nations Joint Staff Pension Fund, as its head of international and responsible investing.
Why does it matter?
Guazo oversaw asset growth at the UN pension fund and incorporated ESG factors into investment decisions. His hiring suggests Northern Trust aims to align more closely with the UN’s sustainability approach and definitions.
Read more
According to Citywire:
Pedro Guazo will move to the US-based asset manager, which runs $1.3tn in client money, to both lead Northern Trust AM’s Emea and Apac offerings, while also taking over responsibility for its $189bn global responsible investing platform. …
In his five years as chief executive officer of the United Nations Joint Staff Pension Fund’s Office of Investment Management, Guazo helped grow the assets by nearly 60% and diversify into new asset classes, as well as investing into private markets. Northern Trust AM said Guazo did this while also championing responsible investment ideas. …
Throughout his career Guazo has held high-profile positions at a number organisations, including being chief financial officer at the UN prior to his promotion to run the pension fund.