Friday Funds: Schroders launches carbon offset share classes

Schroders has launched carbon offset share classes to provide clients with the option of offsetting carbon emissions associated with their underlying fund holdings. The share classes will be available as part of the Schroders International Selection Fund (SISF) global climate leaders, which is focused on investing in companies showing climate change leadership. The manager will aim to ensure that the offsets purchased equate to the Scope 1 and 2 emissions of the portfolio companies attributable to the share class. All carbon credits will be issued from any of the major carbon standards and be verified.

Morgan Stanley Investment Management (MSIM) has raised $500 million for the first close of its Climate Private Equity Strategy (1GT). The fund, which is targeting $1 billion, received allocations investors including from public and private pension funds. The Article 9 fund is focused on investments in growth-stage companies that aim to avoid or remove one gigaton of carbon dioxide-equivalent emissions from the atmosphere from the date of investment through 2050. 1GT targets investments in private companies across the mobility, power, sustainable food and agriculture, and circular economy sectors.

FTSE Russell has launched its UK ESG Risk-Adjusted Index Series as part of its multi-asset ESG and climate index range. The index series applies various exclusions, reduces the carbon emissions and reserves exposure of the index, and tilts the weight of the universe towards companies with better ESG characteristics. Index exclusions include controversial weapons, thermal coal production, energy generation based on thermal coal, arctic oil and gas exploration, and oil sands and shale energy extraction.

US asset manager Harrison Street is due to launch its first energy transition-focused fund targeting $750 million, according to affiliate publication Infrastructure Investor. A majority of the fund’s portfolio will be dedicated to renewable energy infrastructure, while also allocating assets to clean heating and cooling, EV charging infrastructure, carbon capture, renewable fuels and microgrids. Harrison Street declined to comment.

Goldman Sachs Asset Management reduced its exposure to the Adani Group in its ESG portfolios in February, according to Bloomberg. Goldman Sachs funds classified as promoting ESG goals under SFDR sold around 11.7 million shares in Adani companies, according to the research. This followed the publication of a report by Hindenburg Research which accused the group of engaging in stock manipulation and accounting fraud schemes. Adani has rejected the claims. Goldman Sachs declined to comment on the research.

The Financial Conduct Authority (FCA) has approved the launch of BlackRock’s private markets Long-Term Asset Fund (LTAF). The fund will invest in alternative strategies that have sustainability characteristics, including those which support social impact and the transition to a low carbon economy. The LTAF will blend multiple private market asset classes including infrastructure, private credit, private equity and real estate.

Octopus Energy Generation has launched an Energy Transition Fund (OETF) targeting £500 million ($621m, €576m) from institutional investors. The fund has a £40 million cornerstone investment from Wandsworth Pension Fund. OETF invests in technologies decarbonising areas of the economy dominated by fossil fuels, like heating and transport.