Friday Funds: Schroders and Conservation International partner on natural capital investment house

The latest developments in ESG-related funds: Fidelity International to transform seven funds into ESG funds; Amundi launches EM ESG improvers fund.

Schroders and Conservation International have partnered to launch a natural capital impact investment house in Singapore. The new firm, Akaria Natural Capital, will invest in around 15 to 20 natural climate solutions projects across South-East Asia over five years, and plans to launch a series of funds investing in natural capital across the region. It will be based in Singapore and run by Gary Addison, with Simon Chadwick taking the role of chief impact officer.

Fidelity International is set to rebrand six of its funds with assets of around €7 billion into sustainable funds as it looks to increase the amount of assets managed sustainably. The funds, which include a healthcare strategy, two dividend funds and a US high-yield fund, will introduce minimum ESG score requirements and exclusions for controversial sectors including weapons and thermal coal.

Amundi has launched an ESG improvers fund investing in emerging markets equity. The fund will invest in 90 to 120 stocks across market caps, and the manager said it would focus “on improving sustainable characteristics by blending ESG and fundamental analysis” and engaging with firms to push them to improve their ESG profile.

UK pension fund TPT Retirement Solutions has announced a £75 million allocation to impact investments in its default fund. The allocation will finance between 10 and 20 investments in areas including social housing, green infra and renewable energy.

Net flows into sustainable funds globally fell by 62 percent in Q2, attracting $32.6 billion of inflows against $87 billion in the first quarter of the year, according to new data from Morningstar. While net flows were at their lowest level since the start of 2020, sustainable funds proved more resilient than the broader market, which saw $280 billion flow out over the same period.