Friday Funds: London pension pool awards £200m ESG equity exclusion mandate to RBC

The latest responsible fund news

London CIV [Collective Investment Vehicle], one of eight pooled UK local authority pension funds, has awarded a £200m (€224m) ESG fund mandate to RBC Global Asset Management. The LCIV Sustainable Equity Exclusion Fund – seeded initially by the London Borough of Lambeth Pension Fund – will screen out sectors such as fossil fuels, tobacco and weapons. Iain Simpson, Pension Chair at Lambeth, said the move “shows that local government pension funds can change the investment landscape by creating the demand for innovative products that facilitate disinvestment and address climate change”. The launch brings assets managed in LCIV Sustainable Equity strategies to over £580m.

US-based American Century Investments and Japan’s Nomura Asset Management – which holds a non-controlling 41% stake in ACI – have jointly launched an impact version of the American Century Emerging Markets strategy. The new Dublin-based UCITS fund will have a portfolio of 70-75 companies which contribute to the UN Social Development Goals (SDGs).

S&P Dow Jones Indices has launched a benchmark index to measure the investment performance of European Carbon Emission Allowances. The S&P GSCI Carbon Emission Allowances (EUA) EUR index, claimed to be the first-of-its-kind, is based on the ICE EUA Futures Contract. The EU emissions trading system (EU ETS) is the world’s first cap-and-trade system which allocates emissions allowances to companies, under a predetermined cap, which can then be traded to suit requirements.

Neste, a Finnish renewable fuels producer and Mirova, the impact-focused Natixis affiliate, have jointly committed €10m to develop technology which would reduce the amount of plastic disposed through landfilling, incineration or exports. UK-based firm Recycling Technologies will use the capital to develop a commercial machine capable of recycling mixed plastic waste into waxes and petrochemical feedstocks.

Invesco has announced an exchange traded fund (ETF) with a similar profile to the S&P 500 but with improved ESG and carbon intensity scores. The S&P 500 ESG UCITS ETF provides exposure to the top 75% ESG performers in each industry group. It has had a 0.87% tracking error with the S&P 500 over the past five years.

Incofin Investment Management, an emerging markets-focused impact specialist, has been selected by French food group Danone to manage a fund investing in providers of clean drinking water in water stressed areas. The fund, which will also provide technical support to portfolio companies, will seek investments from institutional asset owners.

Spain: Asset management boutique Alantra has partnered with utility Enagas to launch a fund focusing on the energy transition. The Clima Energy Transition Fund will invest in companies “operating in the green hydrogen, biogas, energy efficiency, decarbonization, sustainable mobility and digitalization for energy transition segments”. Enagas has committed a minimum of €20m and will provide technical and sector expertise.

Praemium, an Australian investment management platform, has added the Australian Ethical Australian Shares Portfolio – a fund investing in line with the Australian Ethical Charter – to its range of products. Separately, Praemium users now have the option to exclude against nine criteria such as fossil fuel screens, alcohol, tobacco, gambling, adult entertainment, animal testing and controversial weapons based on Sustainalytics data.

The Ecological Land Cooperative (ELC), a UK-based social enterprise encouraging new entrants into the sustainable farming industry, is looking to raise £400k (€452k) through the ethical investment platform Ethex. The ELC – which offers affordable, low impact, small farms – will use the funding to develop an additional 18 sites by end-2023, bringing its total number of farms to 30.

The European Investment Bank (EIB) is to provide €60m debt financing for the construction of a 94 MW windfarm on the Polish coast. The loan will be made to a subsidiary of Ignitis Group, a Lithuanian utility, and will support the decarbonisation of Poland’s energy sector.

Astarte Capital Partners, a specialist co-investment platform, has allocated a percentage of profits from its recent fundraise to the Beyond Capital Fund, a non-profit impact fund which aims to alleviate poverty in East Africa and India. Eva Yazhari, Co-Founder and CEO of Beyond Capital said: “When we launched Beyond Capital 11 years ago, we envisioned this exact arrangement with an aligned stakeholder.”