RI Funds April 13: PKA excludes 35 O&G cos, Taiwan’s BLF hires 7 manager for $1bn ESG briefs

The week’s fund launches and portfolio management stories condensed.

PKA, the $46bn Danish pension fund has excluded a further 35 oil and gas companies from its investment portfolio over failure to live up to the goals of the Paris climate agreement. In total, PKA has now excluded 40 oil and gas companies and 70 coal companies. The fund said it would target carbon emissions in the automotive industry next.
The newly excluded oil and gas companies include Anadarko, Chesapeake Energy, Marathon Oil, Apache, Gazprom, Inpex, Lukoil, Rosneft and Sinopec, PKA said.
Amundi is already looking at creating more green bond funds on the back of its Emerging Green One product, which it launched recently with the International Finance Corporation. The pair announced the plans last year to develop a vehicle to invest in emerging markets green bonds, and confirmed close on the fund earlier this year. When asked about it on an investor-focused panel at RI’s Sustainability Bonds conference, Marie-Anne Allier, Head of Fixed Income Fund Investments at Amundi said: “We plan to launch a series of [green bond] funds, not exactly the same [as Amundi Planet One] but we are thinking about a next one.” Amundi has another dedicated green bond product already, focused on developed market.
Barclays will launch the UK’s first ever ‘green mortgage’, offering lower rates for those buying an energy-efficient homes, it has been reported. The Green Home Mortgage is available next week on new build properties with an A or B Energy Performance Certificate rating, alongside 2 and 5-year fixed rate options to 90% loan-to-value. The mortgages will be partly funded by Barclays’ €500m green bond, issued last year. Rhian-Mari Thomas, managing director and chairman of Barclays Green Banking Council, said: “Hopefully green mortgages are going to emerge as a big asset class – I’m sure there will be many flavours of green mortgage.”
NN Investment Partners has received SRI Label accreditation from the French government-backed kitemark for for four of its funds after an audit from EY France. The funds are its Global and European Sustainable Equity funds, its Global Equity Impact Opportunities and Patrimonial Balanced European Sustainable funds. The labelled funds represent €2.6bn of NN’s €10.9bn in RI funds.
Bain Capital Double Impact, the impact investing fund of Bain Capital, has joined other strategic investors in supporting plant-based, “fast-casual” restaurant startup by CHLOE. The strategic investment will allow the brand to further its plans for growth and expansion, which include increasing its social impact objectives, such as lowering its carbon footprint and preserving the planet’s water supply with vegan, responsibly sourced ingredients and eco-friendly packaging. Kitchen Fund, Collaborative Fund, TGP International/Qoot International, were among other investors. Warren Valdmanis, a Managing Director at Bain Capital Double Impact, said: “Bain Capital has a long and successful history of investing in and supporting restaurant businesses. We believe there are significant opportunities to increase by CHLOE.’s social and environmental impact through targeted sustainability initiatives.”
ING France and Gecina, the largest European Office REIT, have concluded a €150m sustainability performance-linked loan. Progress will be measured through a GRESB rating, benchmarking Gecina’s performance through a customised package of ESG indicators. Gecina CEO Méka Brunel said: “With this sustainable improvement loan, Gecina demonstrates its strong CSR convictions by integrating social and environmental concerns on an equal footprint with financial targets. CSR is fully integrated in our strategy and our business. Future is about leveraging the power of this integration and sustainable finance is a new step in this direction.”Taiwan’s Bureau of Labor Funds (BLF), supervisor of Taiwan’s government pension funds, has appointed seven asset managers for its NT$42bn (€1.1bn) domestic ESG equity mandate. Cathay Securities Investment Trust Co, Capital Investment Trust Corp, Fuh Hwa Securities Investment Trust Co, Taishin Securities Investment Trust Co, Allianz Global Investors Taiwan, President Securities Investment Trust Co, and Prudential Securities Investment Trust Co.will each receive NT$6bn (€165m) in funding. This is BLF’s first domestic mandate structured with a customised benchmark index.
BlackRock is to launch two ETFs that exclude producers and big retailers of civilian firearms, following the shooting that left 17 dead at a Florida high school in February, according to media reports. The iShares MSCI USA Small-Cap ESG Optimized ETF will track investment results of an index comprised largely of small-cap US companies, and an initial registration statement for the iShares ESG US Aggregate Bond ETF has been filed.
The 2018-19 New York State (NYS) budget has established an Opioid Stewardship Fund, requiring opioid manufacturers and distributors to contribute to a $100m annual fund intended to cover the costs of prevention, treatment and rehabilitation programs. Payments are to be divided based on each group’s share of the market. The reform has been welcomed by substance abuse providers and addiction recovery advocates, who say the industry fuelling the crisis should help tackle it. The pharmaceutical industry, however, has rejected the reforms on several counts, for example saying the cost of what is effectively a tax will be passed onto residents, resulting in higher insurance premiums.
Cbus Super (Cbus), Australia’s $43bn construction and building superannuation fund, has announced a significant investment into renewable energy that “will deliver strong, long-term returns to members and sustainable power to Western Australia”. Cbus will hold an 80.1% equity interest in Bright Energy Investments (BEI), a portfolio of wind and solar renewable generation assets, with Synergy, the West Australian government owned electricity generator and retailer holding 19.9%. Cbus Head of Infrastructure Diana Callebaut said: “Our priority is generating sustainable returns for our 755,000 members and from a risk and return perspective this investment stacks up and strongly aligns with our Fund’s long-term outlook.”
The proposed bonds that will finance Mexico’s biggest wind farm energy project have received an S&P Global Ratings Green Evaluation of E1/91 – the highest score available. Eólica Mesa La Paz, the Mexican subsidiary of California-based wind project developer Oak Creek Energy Systems, Inc., will finance the construction of the 306-megawatt (MW) onshore wind project using a new senior secured bond for $303m with final maturity in December 2044. The transaction has received an E1/91 score – the strongest Green Evaluation score – as well as an aggregated score of Transparency (80), Governance (95) and Mitigation (92), based on “a robust project finance legal structure and high-level commitments to reporting on carbon reduction efforts”
Investment management firm JAR Capital has released reports reviewing two of its funds. The fund performance for the JAR Sustainable Income UI share classes R EUR and I EUR were -0.42% and -0.35% net respectively for the year to September 30, 2017, while the fund performance for the JAR ESG HY share classes P and R were -0.34% and -0.38% net respectively.