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Responsible Funds, September 2: France set to issue sovereign green bonds

The latest responsible funds news

The French government says it will issue green bonds next year, and it hopes to raise €9bn. It would be a first by a sovereign issuer, it is believed. The announcement today by Ségolène Royal, Environment Minister, and Michel Sapin, Minister of Economy and Finance is to coincide with the G20 in China. The French state will issue green bonds via debt management body Agence France Trésor, with a goal of raising €3bn a year.

BlackRock, the world’s largest fund manager, has reportedly launched a new fixed income fund for investors who want to incorporate environmental, social and governance (ESG) factors. Citywire said the BlackRock BSF Sustainable Euro Bond fund would be managed by Michael Krautzberger, the firm’s head of fundamental pan- European fixed income, and Ronald van Loon. The report added they would screen for ESG factors using MSCI’s ESG ratings for corporate, sovereign and government-related securities. Krautzberger was quoted saying: “We are looking to incorporate MSCI’s ESG insights in our active positioning, for example underweighting issuers with deteriorating ESG profiles that we expect to be downgraded by MSCI.” The fund was also expected to hold a higher proportion of green bonds than non-ESG strategies.

The Merseyside Pension Fund in the UK has begun disclosing its voting records for all company meetings where it has exercised its voting entitlement. It said: “We work with PIRC to ensure that its voting behaviour is congruent with our investment beliefs and supportive of long-term responsible ownership.” The policy covers its shareholdings in the UK, Europe, North America, Japan and Australasia.

The Australia and New Zealand Banking Group (ANZ) has reportedly voted to exit any direct holdings in companies that make controversial weapons such as anti-personnel mines and nuclear armaments. It follows a Radio New Zealand investigation that found that several default KiwiSaver providers either directly or indirectly invested in tobacco companies and weapons manufacturers that made cluster bombs, anti-personnel mines and nuclear weapons. RNZ cited an ANZ statement as saying none of its funds had any direct holdings in companies that made cluster bombs. The bank would also be removing direct investments in tobacco companies, RNZ added. ANZ was quoted saying it did invest in collective funds that might have exposure to weapons companies, and that it was considering also excluding those investments.Australia-based specialist fund firm Artesian Venture Partners has announced the launch of Australia’s first Clean Energy Seed Fund. The A$20m (€13.5) fund includes a A$10m cornerstone commitment from the new A$1bn Clean Energy Innovation Fund. It will focus on “unearthing and financing” clean energy innovations and startups. The fund is seeking registration with Innovation Australia as an early stage venture capital (VC) limited partnership (ESVCLP) to provide investors with tax-free returns and will therefore be compliant with the Significant Investor Visa (SIV) Program. The seed fund is targeting additional private sector equity investment of up to A$10m and will target sectors such as the internet of things, energy storage, biofuels, alternative energy generation (solar, wave, geothermal, wind), metering and control, green building and biomaterials, transport technologies, water and waste.

The European Parliament’s Economic and Monetary (ECON) Committee has unanimously dismissed proposed changes to legislation surrounding packaged retail and insurance-based investment products (PRIIPS), a market worth €10tn, which aim to give greater protection to consumers. The European Commission’s original proposals called on investment providers to be more transparent about their products and to include detailed performance information and ESG factors in key investment documents. Many MEPs, including Green Party member Sven Giegold, have criticised the new rules for being flawed, confusing or even misleading. MEP Pervenche Berès, who is helping author the guidelines, declared that she “will do everything possible to reach an agreement on PRIIPs, because such information is critical in the current environment”.

Luxembourg-based FARAD Group has reportedly launched the first AIFMD regulated platform for impact investing funds. Dubbed the European Impact Investment Platform it will host sub-funds with a social or environmental impact. Its first sub-fund is F&S Global Sustainable Land and Social Housing.

French asset management giant Amundi has finalised its acquisition of Kleinwort Benson Investors (KBI), the Ireland-based boutique with a focus on sustainability, from Oddo & Cie. Amundi now has 87.5% of KBI with the KBI management team acquiring the remaining 12.5%. KBI will be renamed KBI Global Investors (KBIGI); it has 62 staff and manages €8.1bn.