Responsible Funds, Aug. 18: German cooperative bank GLS launches climate fund

The latest responsible funds news.

GLS Bank, the German cooperative Community bank for Loaning and Giving, has launched the GLS Bank Climate Fund. The fund invests worldwide in companies by, amongst others, assessing their emissions, climate strategies and climate protection measures. Karsten Kührlings, managing the fund business at GLS Bank, says that the fund factors in the Sustainable Development Goals of the UN and that the bank plans to also invest in green bonds for which it had developed a special evaluation procedure to be able to assess their greenness.

The UK government has confirmed that the sale of the Green Investment Bank to Macquarie has now been completed in a £2.3bn deal. It would now be known as the Green Investment Group (GIG) and be able to make overseas investments. The green ‘special share’ held by the Green Purposes Company Ltd. also comes into force.

LGT Capital Partners, the asset manager owned by the Princely house of Liechtenstein, has divested Mednax Inc., the US health solutions provider, from its Sustainable Equity Fund due to “disappointing earnings…weak organic growth, higher operating expenses…, and a lack of acquisition growth”. The divestment comes as the €459m fund, domiciled in the principality, reported that it had underperformed in the year to the end of July against its benchmark, returning 0.71% compared to the MSCI World’s (EUR) (NR) 1.37%.

UBS’s $351m Global Sustainable Fund, managed by Bruno Bertocci and Alix Foulonneau, has beaten the MSCI World index with a return of 21.67% (compared to 16.12%), in the year to the end of July. And, the Swiss financial giant’s UBS Global Sustainable Innovators Fund also beat its benchmark, the MSCI World Small & Mid Cap, returning 19.50% compared to 10.06%. Managed by Foulonneau and Joe Elegante, the €94.98 fund focuses on small companies that offer “clear benefits” surrounding climate change, demography, and water.

The European Bank for Reconstruction and Development (EBRD) and the Green Climate Fund (GCF) are teaming up to make a major contribution to a $1bn renewable energy project in Egypt. The funding supports the government’s Sustainable Energy Strategy, which aims to source 20% of the country’s energy from renewables by 2022. Funding for this initiative, the largest contribution by GCF since it began full-scale operations, is expected to start flowing in September.

The Rockefeller Foundation has reportedly announced that it will pay $342,000 to underwrite the costs for two municipalities in issuing environmental impact bonds. Last year, Goldman Sachs and the Calvert Foundation invested $24m into the first environmental impact bond issued by the DC Water and Sewer Authority. On top of the regular bond coupon, it linked an investor bonus or penalty to the performance of the new green infrastructure funded by the bond.

The Florida State Board of Administration this week passed a resolution to prohibit investments connected with Venezuela. It was signed by board members Rick Scott, the state governor, and Attorney General Pam Bondi and Chief Financial Officer Jimmy Patronis. It states: “The current government of Venezuela is intolerable to its people and continues to demonstrate the use of extreme violence and political persecution in the orchestrated suppression of human rights.“The £4.5bn London Pensions Fund Authority (LPFA) is to review its investments with regards to climate change by the end of the year. It follows engagement with the Greater London Authority and Sadiq Khan, Mayor of London who has called on the LPFA to divest fossil fuels. Together they have agreed a policy on climate change that states that the fund will not consider new active investments in fossil fuel companies. It also says the fund will divest existing fossil fuel investments if opportunities for engagement or reform at a holding do not exist, providing it will not result in material financial detriment.

The European Investment Bank (EIB) is considering a €40m investment in the Green Metropole Fund, a regional investment platform sponsored by the Port of Amsterdam and managed by e3 Partners, a Dutch private fund manager. The EIB loan will leverage the investment capacity of the fund’s investors towards small and medium-sized enterprises (SMEs) and small projects in the important sectors of circular economy, renewable energy and energy efficiency. The fund will deploy a large spectrum of financial instruments: primarily senior and subordinated debt as well as mezzanine and equity financing.

RobecoSAM’s Smart Materials Fund has sold its stake in Mettler Toledo, global provider of precision measurement instruments, according to its most recent performance report. Investing in companies involved in the extraction of raw materials, recycling of used resources, and alternative materials, the £387m Luxembourg domiciled fund returned 16.03% in the year to the end of July – compared to its MSCI World ND benchmark’s 6.20%. The report also cites US motor giant Ford’s F-150 model as an example of how innovative light materials “are looking forward to strong demand”.

And, the Swiss firm’s £730m Sustainable Water Fund has also beaten the MSCI World ND index, returning 10.35% over the year to end-July. Domiciled in Luxembourg, the fund focuses on “technology, products, and services in relation to the water value chain”.

Acatis’ €51m Liechtenstein domiciled sustainability fund has added German semiconductor specialist, Infineon and Belgian materials technology company, Umicore, as it reported an above benchmark return of 13.3% for the year to date – compared to the MSCI World index’s 6.6% (as of July 2017). The Acatis Fair Value Aktien Global Fund, managed by the Frankfurt based asset management boutique, aims to invest predominantly in companies that incorporate sustainability into their businesses.

State Street Global Advisors has announced recent updates to the composition of its SSGA Gender Diversity Index. The index, launched in March 2016, is a quantitative index driven by the highest percentages of women on boards and in senior leadership positions at a given company within their sectors. After an annual rebalance on July 15, it now consists of a total of 171 constituents. The top ten companies are Pfizer, Coca-Cola, PepsiCo, IBM, Mastercard, Amgen, McDonald’s, U.S. Bancorp, CVS Health and Lockheed Martin.