Friday Funds: Launches for SDGs, emerging markets and Japanese engagement

The latest developments in ESG-related funds

Solactive has collaborated with ISS ESG to release the Solactive ISS SDG Leaders Index, based on the 17 UN Sustainable Development Goals. The Germany-based index provider and the responsible investment arm of Institutional Shareholder Services have applied restrictions to companies involved in the manufacture or application of controversial weapons, those failing to respect norms on human or labour rights, and those who do not report on these issues. Subsequently, companies are selected based on their overall SDG Impact Rating. 

BMO Global Asset Management claims to have achieved several SDG milestones through its SDG Engagement Global Equity Fund, one year on from launch. The fund, which invests in global small- and mid-size cap equities, engages with companies to ensure they are driving meaningful change. The focus has been on climate change, consumption and production and decent work and economic growth. 37% of milestones, defined as significant progress made by a company against goals set by the fund, were linked to climate. Since 2019, the Fund has carried out 151 engagements across 18 countries, with 96% of companies in the portfolio. 

Aberdeen Standard Investments has launched its Aberdeen Standard SICAV I – Emerging Markets Sustainable and Responsible Investment Equity fund. The fund will allocate capital to best-in-class ESG companies, as well as those "seeking to improve", and those with a “lower carbon footprint than the index". It is the first of two responsible investment strategies set to be released by the asset manager this year.

Ilmarinen, Finland’s largest pension insurance company, has invested €500m in ESG-focused emerging markets equities via a new ETF, which it co-created with French asset manager Amundi. The Amundi MSCI Emerging ESG Leaders Select UCITS ETF will invest in at least 450 large- and medium-sized companies, in 26 emerging markets. Stocks will be selected based on their ESG performance, with “sin stocks” excluded. 

Italy’s pension schemes for lawyers (Cassa Forense), architects (Inarcassa), and chartered accountants (Cassa Commercialisti) have all backed an urban regeneration fund focused on sustainable properties, from real estate house Coima. The COIMA ESG City Impact Fund has raised around €400m to acquire “regeneration opportunities” in Italy, with a focus on neighbourhood developments to support economic growth in the main Italian cities. 

S&P Dow Jones Indices has collaborated with the Mexican Stock Exchange (BMV) to create the S&P/BMV Total Mexico ESG Index, which will include 29 companies selected using ESG principles. It will exclude arms and tobacco and companies that do not meet the UN Global Compact. 

Neuberger Berman has launched a Japan Equity Engagement Fund, which will engage with small- and mid-cap Japanese companies with a market capitalisation generally lower than ¥1trn – particularly those with a ‘willingness to change’. Tokyo-based Keita Kubota, Head of Japanese Equities at the investment manager, will manage the UCITS fund.

M&G Real Estate has “committed to achieving” net zero carbon emissions across its assets under management by 2050, alongside releasing a Real Estate’s Responsible Property Investment (RPI) Report