Responsible Funds, April 15: IFC/Puma, Greencoat UK Wind, Pax World, FTSE Russell

The round-up of the latest responsible funds news

The International Finance Corporation (IFC) and German sports apparel maker Puma have launched a new loan programme for Puma suppliers in emerging markets. Under the programme, financial incentives will be offered to encourage adherence to environmental, health and safety and social standards. Companies that Puma ranks highly will qualify for better loan conditions. The programme is to be rolled out in Bangladesh, Cambodia, China, Indonesia, Pakistan and Vietnam. The IFC, member of the World Bank Group, says that it has set aside $500m for the purpose of providing short-term loans to emerging market suppliers like those for Puma. Link

Germany’s HSH Nordbank says it has financed its first photovoltaic (PV) park project in Denmark, providing a 17-year loan totalling €64.5m. The park, called ‘Vandel,’ is located in southern Denmark and has a power capacity of 50.4MW. It began generating power in December 2015. The German bank also said the park’s developer, European Energy A/S, had since sold Vandel to a fund managed by Allianz Global Investors. “This transaction marks our successful entry into the promising Danish market for project finance,” said Lars Quandel, Head of Energy & Utilities at HSH Nordbank.

Listed wind farm fund Greencoat UK Wind (UKW) is issuing £300m in new shares to pay down debt and fund more wind farm investments. UKW went public in 2013, and since has raised £524.5m. Tim Ingram, Chairman of UKW, said: “We believe that the future opportunities for Greencoat UK Wind are very exciting. There is a significant asset pool with a healthy number of motivated sellers and we are very well placed to take advantage of this.”

Investor disquiet about the remuneration report at BP was perhaps best expressed by Dutch pension investor PGGM. “Despite BP reporting a record annual loss of USD 6.5 billion for 2015, Executive Directors received maximum bonuses for the year, the highest bonus payouts since 2008. Downwards discretion to recognise the challenging oil price environment only impacted below Board-level senior managers.” It added the report reveals a “flaw in the mechanics of the bonus scorecard”. The investor noted: “Directors do not have to hit all targets to receive a maximum bonus, while less senior managers need to achieve performance at maximum under all measures for a maximum payout under the portion of their bonus based on the Group scorecard.” Just over 59% of investors rejected the execitove pay report at the oil firm’s AGM yesterday.US Socially responsible investor Pax World Management is planning an overhaul of its Growth Fund, including outsourcing the fund’s management and giving the fund a new name. Launched in June 1997, PWM’s Growth Fund has $195m (€171m) in assets. Its manager is Anthony Trzcinka, who is also a Pax World Vice President. In terms of strategy, the Growth Fund targets large-cap US companies that score highly on ESG (environmental, social and governance) issues important to PWM. Fossil fuel companies are also excluded. Now, in a filing with the Securities and Exchange Commission (SEC), PWM proposes that a sub-advisory arrangement be made with Aperio, a California-based firm specialising in ESG investing. The Growth Fund will also be renamed Pax World’s ‘ESG Beta Quality Fund.’ If the fund’s shareholders approve the changes, they would take effect from June 2016.

Scotland-based Aberdeen Community Energy, a community benefit society, will be launching a Community Share Offer to fund the country’s first urban hydro energy scheme. Investors can expect around a 5% return on their investment. The project, the Donside Hydro, will draw water from the River Don in northeast Scotland to create clean, renewable electricity that will be sold to the national grid. Surplus profits from the initiative will be channelled into a fund for local, deprived communities.

Allianz Capital Partners (ACP), the infrastructure investment arm of German insurance giant Allianz, plans to double investments in renewable energy by 2019, the head of the unit says. Speaking to Reuters, ACP Chief Executive Jürgen Gerke said his firm was targeting solar and wind power assets worth about €3bn within the next two to three years. ACP’s renewables portfolio currently contains 63 wind parks and seven solar installations with a combined worth of above €3bn. Gerke also said ACP had become more open to investing in offshore wind parks, but only if the price were right.

Index provider FTSE Russell has developed a new ESG index with the Association of Southeast Asian Nations (ASEAN) Exchanges. The FTSE4Good ASEAN 5 Index consists of companies listed on the five ASEAN exchanges: Singapore, Indonesia, Malaysia, Philippines and Thailand. The companies included in the index have been assessed to ensure they meet the standards required for FTSE4Good inclusion.