The RI round of the week’s ESG fund and investment launches

The bite-sized review of the latest ESG products, indices and investment news.

Latest green bond issuance in the market includes a first Euro-denominated ‘environmental bond’ from The Nordic Investment Bank (NIB) for €500m. The Climate Bonds Initiative (CBI) said €650m of orders had been received from 36 different investors, with 70% coming from investors with a green focus. Underwriters were HSBC, Bank of America Merrill Lynch and Credit Agricole CIB, and a green review from CICERO.
The New York State Environment Agency has issued US$376.5m of green bonds for water projects (3.25-5%, 3-15 years, AAA). CITI was the lead underwriter.
Colorado State University has issued $42.1m of green bonds for building finance (5%, 1-15 year, AA/Aa2).
MSCI, the New York-based index provider, says that exchange-traded funds (ETFs) that track its ESG (environmental, social and governance)-themed equity indices have, as of July 2015, taken in a total of $1.8bn (€1.6bn) in assets from investors. In a statement, MSCI also said ETFs that tracked its low carbon indices had taken in more than $460m as of two months ago.
Amundi, the French asset management firm, has launched two exchange-traded funds (ETFs) for the German market that track Low Carbon Leaders indices it developed with MSCI last year. The indices have a smaller carbon footprint versus conventional indices, while maintaining a low tracking error that is not deviating much from beta returns. The two new ETFs for the German market are called Amundi´s Index Equity Europe Low Carbon and Amundi´s Index Equity Europe Low Carbon.
S&P Dow Jones Indices (S&P DJI) has launched three new climate change index series: the S&P Global 1200 Carbon Efficient Index Series, S&P Global 1200 Carbon Efficient Select Index Series and S&P Global 1200 Fossil Fuel Free Index Series. All three are derived from the constituents of the S&P Global 1200. Then indices put forward various methods of re-weighting or excluding companies from portfolios depending on their carbon emissions levels, or for completely excluding fossil fuel companies. They are based on data from Trucost.
UBS has launched an ethical US corporate bond ETF. The UBS Barclays MSCI US Liquid Corporates Sustainable UCITS ETF is listed on the London Stock Exchange. It is linked to the Barclays MSCI US Liquid Corporates Sustainable TR Index, an index tracking the performance of fixed income bonds issued by US corporates that adhere to strong ESG standards.FTSE Russell ESG is reportedly planning to roll out a new ratings data platform for ESG information. Waterstechnology reports that it will make data on European, American and Asian companies from its in-house research team available via the new platform.
The Dow Jones Sustainability Indices has removed Cisco Systems, PepsiCo and the Royal Bank of Canada, and added Bank of America, Telefonica and BHP Biliton as part of its annual review. Goldman Sachs has been included on the annual Dow Jones Sustainability North American Index. The Dow Jones Sustainability Indices is based on RobecoSAM data.
The New Zealand Superannuation Fund (NZ Super) has reported a return of almost 15% for the first six months of 2015. In terms of assets, the gain means the fund added NZ$3.1bn (€1.7bn) during the period, bringing the total under management to NZ$29.5bn. Looking forward, NZ Super said that as global equity markets were currently experiencing increased volatility, this would depress the fund’s return in the short term. For the long term, however, the pension scheme and prominent responsible investor expects its annual return to total between 8-9%.
Ratings agency Moody’s has released a report that explains its incorporation of environmental, social and governance (ESG) considerations into credit analysis. It highlights ESG issues that Moody’s view as material to the outlook for a given sector or industry. In August, it assessed the impact of anti-bribery and corruption enforcement efforts globally and in March, it assessed the risks of carbon-reduction policies on non-financial corporates.
Bloomberg and the Natural Capital Declaration, the finance-led initiative supported by the CEO’s of 40 financial institutions to integrate natural capital considerations into financial products and services, have launched a tool which enables analysts to incorporate water risks into company valuations across the mining sector.
The Asian Infrastructure Investment Bank (AIIB) based in Beijing comprising 57 countries as Prospective Founding Members has developed a Draft Environmental and Social Framework, which it has opened for consultation. The AIIB has said it will put in place strong policies on governance, accountability, financial, procurement and environmental and social frameworks.
Link to consultation