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Responsible Funds, April 21: TIAA facing petition over farmland, palm oil holdings

The round-up of the latest responsible funds news

A coalition of environmental, human rights and family farm organizations have delivered a letter with over 100,000 signatures to US pension fund management company TIAA, expressing concerns over the company’s investments in farmland and palm oil. The organizations are demanding that TIAA disclose the locations of its farms and its investments in “destructive palm oil companies”, and that these investments be stopped. Doug Hertzler of ActionAid USA said: “TIAA claims to be a socially responsible company, but the way it invests its customers’ money tells a different story.”

Jim Yong Kim President of the World Bank Group has reportedly stated that despite changes in the global political landscape he does not expect a change in the organisation’s stance on financing alternative energy projects and mitigating the effects of climate change. Responding to a question on the Trump administration, Kim stated that the “science of climate change didn’t change with any particular election”.

First State Investments, the international arm of Australia based Colonial First State Global Asset Management, has raised €700m for its second direct European infrastructure fund, completing the first round of fundraising. The European Diversified Infrastructure Fund II (‘EDIF II) will pursue the same investment strategy as its predecessor (EDIF I) targeting primarily utility, energy, and transportation investments in Europe. The new fund aims to reach a target size of €2bn (with a cap at €2.5bn) over a limited number of fundraising series.

US investment advisor SerenityShares, which launched last year, has listed its new IMPACT ETF, an exchange traded fund offering investors access to US-listed companies that actively ‘seek to improve societal, social, and environmental concerns’. The fund, which SerenityShares claims goes ‘beyond ESG’, focuses on themes, including: environmental stewardship, access to local healthcare, renewable energy, clean water, eldercare, education, community building, and access to libraries.

Star fund manager Neil Woodford’s new Woodford Patient Capital Trust, which invests mainly in early-stage UK companies, had a net asset value loss of 4.2% for the year ending December 2016. Woodford said: “I understand that some investors may be disappointed at the net asset value progress thus far and, although I would have preferred to have been writing this review having delivered a positive return, it must be remembered that the investment strategy was never designed to deliver significant short-term wins.”

Clean and flexible energy or the ‘Faraday Challenge’ are among the investment targets of the UK government’s new Industrial Strategy Challenge Fund, a £1bn (€1.2bn), four-year commitment announced today. Funding will focus on six key areas: healthcare and medicine; robotics and artificial intelligence; batteries for clean and flexible energy storage; self-driving vehicles; manufacturing and materials of the future; and satellites and space technology. The fund is being administered by Innovate UK and the Research Councils until the new body UK Research and Investment (UKRI) is formed in 2018. UKRI will be headed by newly named CEO Sir Mark Walport, the Government’s Chief Scientific Adviser.The National Employment Savings Trust (NEST), the UK’s workplace DC pension scheme, has renewed its contract with UK based proxy voting and analysis firm Manifest to help it meet its ‘ongoing commitment to act as a responsible steward of members’ money’. Set up in 2012 NEST currently has over four million members.

Canada’s Vancouver City Savings Credit Union (Vancity) is relaunching its national subsidiary to create what it says is the country’s first ‘Schedule 1’ community-investment bank “focused exclusively on the triple bottom line”. Vancity Community Investment Bank — previously known as Citizens Bank of Canada — will offer financing and expert advice to organizations addressing local community issues, such as impact businesses, social enterprises and not-for-profits.

Colombia has launched a social impact bond (SIB) to provide training and employment support in Bogota, Cali and Pereira. Brookings reports that investors in the social impact bond are a coalition of foundations who are providing upfront capital to finance the intervention. Colombian Government’s Department of Social Prosperity and Switzerland’s State Secretariat for Economic Affairs (SECO) will act as outcome funders and repay investors a return of up to 8% if measured outcomes are met. The Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF) is channeling the outcome funds of SECO. Deloitte will independently verify outcome metrics. Advisory firm Instiglio structured the deal. Link

London-based ESG hedge fund Ecofin has reportedly urged minority shareholders in wind energy firm EDP Renewables to reject an ‘egregiously low’ offer from parent company and energy giant Energias de Portugal (EDP) for 22% of its shares. EDP, which has plans to delist the company, offered €6.80 a share, a figure that ‘significantly undervalues’ the company according to Ecofin.

The European Investment Bank and Dutch bank ABN Amro are signing an agreement to support investments for greening the European shipping fleet. The framework is the first with a financial institution in the Netherlands and is supported by the “Connecting Europe Facility” and was made possible by the ”EFSI” (European Fund for Strategic Investments), central pillar of the European Commission’s Investment Plan for Europe.

The EIB has joined the Global Infrastructure Facility (GIF) as a technical partner. The GIF is a multi-donor platform set up by the World Bank Group to bridge the global infrastructure investment gap by leveraging private sector and institutional investor capital for complex infrastructure projects. “To meet the Sustainable Development Goals, mobilising private investment and other institutional resources is a must, but it is not enough,” said EIB Vice-President Vazil Hudák.