Friday Funds: Ilmarinen invests €580m in Amundi climate ETF

The latest developments in ESG-related funds: Morningstar announces SDG-aligned societal development index; AXA IM launches people and planet equity fund.

Amundi has launched its MSCI Europe Climate Action UCITS ETF, an equity fund that selects investees based on climate indicators. Finnish pensions giant Ilmarinen Mutual Pension Insurance has acted as anchor investor, allocating €580 million to the fund. MSCI’s methodology identifies European companies assessed as the top 50 percent sector leaders on climate transition using indicators including carbon intensity, Science Based Targets and climate risk management. It also excludes companies involved in controversial weapons, tobacco, thermal coal mining, oil sands and nuclear weapons. The fund adds to Amundi’s existing suite of around 30 climate ETFs.

Morningstar has announced the launch its Eurozone Societal Development Select 80 Index, adding to its series of sustainability indexes. It has been exclusively licensed by HSBC as the basis for new index-based structured products. The index provides investors with exposure to large and mid-cap European companies that show a stronger commitment to policies that are aligned to the SDGs, and support economic development across emerging market countries with the lowest levels of economic development. The index uses the Eurozone Large-Mid Cap Index, with approximately 400 companies, and selects and weights eligible constituents based on Sustainalytics’ societal development score system, in addition to a scaling factor based on company revenue.

AXA Investment Management (AXA IM) has launched an ACT People and Planet Equity fund, a multi-cap global equity portfolio that looks to invest in companies that are positively contributing to the SDGs. The strategy invests in companies that support three underlying sustainable growth themes including social progress, energy transition and biodiversity. Smart Pension, a UK workplace pension provider, is the first investor to commit to the fund through its Sustainable Growth Plus Fund. The UK-domiciled fund is an official reshaping and rebrand of the AXA Framlington Emerging Markets fund.

The Investment Management Corporation of Ontario (IMCO) has invested $400 million in Northvolt, an integrated battery platform. Northvolt’s first gigafactory, based in northern Sweden, produces batteries using fossil-free electricity. Future gigafactory additions will support Northvolt’s goal of delivering 150GWh of annual production capacity by 2030. The investment will also contribute to IMCO’s goal to invest 20 percent of its assets in climate solutions by 2030.

Adaptogen Capital – an investment firm focused on the energy transition – has reached final close of its battery storage fund on £207 million ($263 million; €242 million), surpassing its £175 million target. The Battery Storage LP fund received commitments from a total 50 investors across the UK, Europe and the US. The energy infrastructure fund is focused on developing grid-scale and distributed storage assets in the UK and Ireland to facilitate a net-zero transition. The fund plans to develop a 500MW portfolio of six large scale projects at key nodal points on the energy grid across the UK.