Responsible Funds, December 15: KLP, LuxFLAG, Banque SYZ, DNB, Vontobel, ASN Bank, Eastspring

The latest responsible funds news

Norwegian life insurer KLP says it will exclude companies that derive 30% or more of their revenues from the extraction of oil sands in an extension of a similar exclusion on coal three years ago. “The coal criteria were very much linked to carbon dioxide emissions and the issue of greenhouse gases,” said Anne Kvam, KLP’s head of responsible investments.

Swiss private bank Banque SYZ has reportedly launched a new Sustainable Development Goals (SDG) bond in partnership with the World Bank. It is claimed that the bond is the first in Switzerland to directly link private investors to the UN’s development goals. Returns are linked to the performance of companies advancing the global development priorities set out in the goals, including addressing climate change, ending poverty, advancing gender equality, improving health, and building sustainable infrastructure.

DNB’s renewable energy fund for retail investors has underperformed its benchmark, year-to-date, but outperformed by 4.69% over the past twelve months, according to its latest report. The €35m DNB Fund – Renewable Energy Retail (EUR) returned 9.8% since the start of the year, against 10.64% from the WilderHill New Energy Global Innovation Index. However, it returned 18% over one year, against 13.31% for the benchmark. The report said the sector was “still well ahead” of the MSCI World for the year, despite a “difficult” November. Recent obstacles have included policy delays and reduced subsidy payments for a number of stocks, it said.

Vontobel’s mtx Sustainable Emerging Markets Leaders A fund has returned 44% year-to-date, and 52% since inception, according to its latest fund report. Its benchmark is MSCI Emerging Markets, which returned 32.5% and 15.1% respectively. The active strategy invests primarily in equities for emerging market-focused companies. Vontobel must “believe [the companies] are leading in their sector in terms of competitive position and capital returns and which fulfil sustainability criteria”. It holds between 30 and 60 stocks. Its top five holdings include oil company Lukoil, as well as Samsung, Taiwan Semiconductor, Tecent and Broadcom. Its biggest exposure georgraphically is to China, while on a sector level it is most heavily weighted in tech firms.

BetaShares has launched an Australian Sustainability Leaders exchange-traded fund. It describes the vehicle as “ethical”, and its ticker is FAIR. The fund includes “companies that have been screened to preference companies engaged in sustainable business activities and to avoid companies engaged in activities deemed inconsistent with responsible investment considerations”.

ASN Bank has put $25m into the Green Growth Fund. The Dutch sustainability-focused bank has invested into the €427m debt fund, which is a public-private partnership, providing first-loss public debt to encourage private investors in. The focus is on energy efficiency and renewables in Southeast Europe, the Caucasus, the Middle East and North Africa. The GGF was set in 2009 up by KfW and the EIB, with support from the European Commission and other European institutions. Other investors include the IFC, FMO, German bank GLS and the Church of Sweden.Luxembourg fund labeling agency LuxFLAG has granted its ESG label to three funds for the first time: DPAM Invest B Equities World Sustainable, SELECTRA Best of SRI Balanced and SELECTRA Best of SRI Bonds. Three Green Bond labels have been granted to various Climate Awareness Bonds. LuxFLAG has now issued 81 labels for funds (31 microfinance, nine environment, 16 ESG, four climate and 21 green bonds).

The African Development Bank (AFD) said it granted a $100 million loan to the Emerging Africa Infrastructure Fund (EAIF), a PPP whose mission is to become an alternative to development finance institutions and commercial banks. The AFD said its loan aims at reducing the infrastructure financing gap in Sub-Saharan Africa and it builds on EAIF’s plans to reinforce long-term investments in 49 “fragile states” with a focus on key sectors such as power, telecommunication, transportation, manufacturing, among others; and with outcomes that include job creation and “investments in environmental, social and gender projects”.

Goldman Sachs filed an SRI exchange traded fund with the SEC, dubbed the “Goldman Sachs JUST U.S. Large Cap Equity ETF”. As described in its prospectus, the ETF will invest in US issuers that engage in “just business behavior” based on rankings produced by the index provider, the JUST Capital Foundation, Inc. JUST Capital was co-founded in 2013 among others by investor and hedge fund manager Paul Tudor Jones II, with the mission to “build a more just marketplace that better reflects the true priorities of the American people” and the belief that “business, and capitalism, can and must be a positive force for change”. Link

Canada’s Convergence has awarded a ‘design funding’ grant to Swiss-based investment advisory company Clarmondial to structure and launch an open-ended investment fund for private credit in agriculture. The Food Securities Fund will raise capital from institutional investors to lend to responsible local agricultural aggregators in developing countries.

US-based Sustainable Growth Advisers, an employee-owned institutional equity manager with $11.5 billion AUM, will be exclusively represented in Asia by Eastspring Investments, the Asian asset management arm of Prudential plc, as both firms entered into a strategic partnership. Eastspring, with 2,500 employees and $170 billion AUM, said it expects this partnership to cater to client demand and broaden its product offering.

The Green Investment Bank was sold too cheaply by the UK Government, according to its spending watchdog, the Guardian reports. The National Audit Office said the £1.6bn paid in cash by the Australian bank Macquarie came in at the low end of the government’s valuation. It is claimed that if the government had opted for a phased sale, which would have kept the bank under government ownership until the completion of many of its projects, it could have increased the value of the sale by tens of millions.