Responsible Funds, April 28: Storebrand launches two fossil fuel-free funds with €290m from Norwegian institutions

The latest responsible funds news

Storebrand has launched two new fossil fuel-free funds with €290m of investment from Norwegian institutions. The products are an extension of an existing suite of funds launched by Storebrand last year, that exclude all companies with more than 5% of revenues from oil and gas. In total, the entire suite has so far attracted €1.1bn of investment. Storebrand used the launch of the new products to call on the Norwegian government to “allow the $900bn Norwegian Government Pension Fund Global to reduce their exposure to fossil-fuel investments significantly”. CEO Odd Arild Grefstad said: “Our Norwegian customers have exposure to fossil fuels through many sectors of the Norwegian economy. We feel that it is prudent to offer them an opportunity to moderate some of that risk through their investments.”

A group of leading investors are reportedly calling on their peers to back efforts to curb the tobacco industry. The Financial Times said AXA, CalPERS, Scor and AMP Capital are seeking support for an investor statement against the “tobacco epidemic and its significant cost to society and development”. The statement is due to be published on World Tobacco Day on May 31. The statement is being coordinated here.

Australian Ethical Investment Ltd. says it has passed the A$2bn assets under management milestone. In a filing, the Sydney-based company said the business “continued its strong performance in the March quarter of 2017” and the funds under management increased 7.2% to $1.97bn as at the end of March and as at late April had risen to $2.007bn. Managing Director Phil Vernon cited the firm’s “leadership position in a rapidly growing segment of the market” and lower fees.

HSBC says it has established a new dedicated team, the Sustainable Finance Unit (‘SFU’) that “will leverage funds from the Green Climate Fund and from the global sustainable investor community, and also link with governments, think tanks and industry bodies to drive strategic initiatives that will increase green business globally”. The news comes in the bank’s new ESG report.

The $57bn (€67.5bn) Universities Superannuation Scheme (USS), the UK fund for academics, has called for “meaningful and constructive dialogue” between Netherlands-based paint group Akzo Nobel and PPG Industries amid a revised $29bn bid from the US suitor. Daniel Summerfield, Co-Head of Responsible Investment at USS, said the decision to refuse a request for an extraordinary general meeting to debate the future of Akzo Chair Antony Burgmans “not only undermines the credibility of the board but portrays Dutch governance in a very negative light”.

Quoniam Asset Management, the German investment boutique, is reportedly is integrating ESG criteria into its entire Luxembourg domiciled Quoniam Fund Selection Sicav Range, which includes equity, fixed income, and multi-asset risk premia strategies. Quoniam’s responsible investment policy follows the UN Global Compact and the PRI guidelines.Impax Asset Management, the specialist investment manager focused on environmental markets and related resource efficiency sectors, has published an update of its Smart Carbon model portfolios. Impax has been running three model portfolios, based on modifications to the MSCI World Index, which reduce exposure to fossil fuel Exploration and Production (“E&P”) companies by varying degrees. Since inception, the model portfolios have performed better than the market with the full divestment option delivering a return of 45bps in excess of the “do nothing” MSCI World index, with limited impact on tracking error.

The Phaunos Timber Fund, the $301.3m London-listed timber fund managed by Stafford Capital Partners, has announced a net profit of $18.3m for 2016 against a $10.5m net loss in the prior year. Cash balances have grown to $45.6m from $25.6m.

The European Bank for Reconstruction and Development (EBRD) and the UN’s Green Climate Fund (GCF) have signed an accord that they say underscores the EBRD’s position as the largest single recipient of GCF resources and paves the way for more joint projects aimed at combating climate change in the Bank’s regions. An Accreditation Master Agreement (AMA) was signed in Washington by EBRD President Sir Suma Chakrabarti GCF Executive Director Howard Bamsey that will enable the EBRD to receive and deploy GCF funding alongside its investments.

Meanwhile, the board of the Green Climate Fund has announced that it is allocating $755m to fund eight new projects globally to increase resilience to climate change and to promote the development of low-carbon economies. The announcement was made at the fund’s 16th board meeting this month.

As You Sow’s Fossil Free Funds and Macroclimate, the low carbon investment firm co-founded by entrepreneur Mark Kriss, have combined forces to expand the platform with new research, highlighting investments in 50 of the largest, most carbon-intensive coal-fired utilities. This new addition to the financial transparency platform enables investors, including large institutions, to better measure the climate risk embedded in their portfolio. The site uses up-to-date mutual fund holdings to search for investments in fossil fuel companies, and aggregates the overall carbon footprint of each fund so that they can be compared – “smokestack to smokestack”.

Saudi based Islamic Development Bank (IDB) has listed a $1.25bn Sukuk on Nasdaq Dubai, the regional international financial exchange. It is the eighth Sukuk listing on the exchange by the IDB, making it one of the largest Islamic bonds issuers – with $9.8bn listed. Dubai’s Sukuk listings have now reached a total of $53bn – the highest total of any listing venue in the world.