ESG Briefing: New funds from Allianz, Pelargos and WWF

Allianz Global Investors has announced the first close of its first private market impact fund, after it raised a third of the fund’s maximum €300m limit from German, Scandinavian and Austrian institutional clients. The Euro-denominated Allianz Impact Investment Fund will invest across sectors such as energy efficiency, sustainable land use and agriculture, and is expected to reach final close in Q4.

Danish public pension pot LD Pensions has put out a tender for a DKK750m (€100m) high conviction global emerging markets equities mandate, with “ESG fully integrated in the investment process”. The contract, which will run for four years, is worth an estimated €3.5m.

OGCI Climate Investments, a $1bn (€0.9bn) climate innovation fund launched by the oil & gas industry, and Connecticut-based energy investment company Starwood Energy Group, have agreed to co-invest in a large-scale carbon capture facility which will capture 90% of carbon emissions from an existing natural gas power plant. The fund is an initiative of the Oil & Gas Climate Initiative, a CEO-led industry group accounting for 30% of global oil production.

The Craftory, a $375m (€344.7m) venture capital fund investing exclusively in mission-driven consumer brands, has received B Corp certification – the first UK investment company to do so, according to a release. Certified B Corporations are social enterprises verified by B Lab, a non-profit organisation.

The Global Reporting Initiative, a provider of sustainability reporting standards, has released a set of recommendations to help policymakers capture contributions from companies as part of national SDGs strategies. These include facilitating effective SDGs disclosure through mandatory reporting and developing a measuring tool to track private sector input.

Pelargos Capital, a Japan-focused asset manager based in the Netherlands, and Universal-Investment, a €510bn Frankfurt-based independent investment company, have launched a Japanese equity fund in anticipation of “a major revolution in Japan in terms of corporate governance”. The Pelargos Japan Reiwa Fund, which has a strong engagement angle, is benchmarked to the TOPIX equity index.

BMO Global Asset Management engaged with 765 companies across 44 countries last year, resulting in 313 instances of improvement in ESG practices, according to its annual responsible investing report. Of the 313 ‘milestones’ achieved last year, 28% related to climate change and 16%  to environmental stewardship. BMO GAM voted against executive pay at 55% of AGMs overall and 71% in the North American markets.

Milltrust International Group, an emerging markets-focused boutique, has partnered with Hong Kong-based Environmental Investment Services Asia and WWF-Hong Kong to launch The Climate Impact Asia Fund. The fund, which aims to raise $500m (€460m), will invest in leading Asian-listed companies providing climate change solutions. WWF is to serve as an environmental consultant to the fund and will sit on its investment advisory committee.

Morgan Stanley Research has found that the bonus gender pay gap in the UK has increased materially in 2019 compared to the previous year, while the gender pay gap showed little movement. Nearly half of UK based companies which reported their gender pay gap performance last year chose to do so again in 2020, despite the suspension of pay gap reporting due to COVID19.

US faith-based investor Wespath has become the latest member of the UN-convened Net-Zero Asset Owner Alliance, taking total assets associated with the initiative to $4.6trn. Wespath, which manages $26bn in pension assets on behalf of US faith organisations, is the 22nd asset owner to commit to decarbonising its portfolio to net-zero emissions by 2050. In the coming months, members of the Alliance will focus on developing the reporting guidelines and targets aligned with the Paris Climate Agreement.