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Responsible Funds, Aug. 28: AP2, Nordea, ENSOGO Analytics, Deutsche Bank

The round-up of responsible funds news

Andra AP-fonden (AP2) the Swedish state buffer fund, says it has chosen to concentrate on climate, corporate governance, diversity and transparency/reporting for its sustainability efforts. “We have extensive knowledge and expertise in these areas, given that we have worked with these issues over a considerable period of time,” said CEO Eva Halvarsson in the fund’s latest half-yearly report. She noted how AP2 ranked 11th in the index published by the Asset Owners Disclosure Project. “In-house efforts continue concerning the analysis, from a financial perspective, of the carbon-emission risks associated with our portfolio. This year’s agenda features an analysis of power-generating companies.” AP2 first measured its portfolio’s carbon footprint was as early as 2009, something it repeated in 2014. During 2015, the fund has lobbied investors to standardize the way carbon footprints are measured. A separate Sustainability Report will be published in October.

Nordea Asset Management is launching a new fund to target ethical assets globally, according to Bloomberg News. Citing officials, it said the firm has two teams working on its new Global Stars fund, which will launch next year and include 50 to 100 companies. The teams are led by Sasja Beslik, head of responsible investments and Mathias Leijon, Nordea Asset Management’s chief investment officer, the report
added.

ENSOGO Analytics is a new firm offering sustainability evaluation of mutual funds. It’s been formed by Mark Bateman, the former Head of Research at IW Financial along with former Oregon State Treasurer Randall Edwards and former Oregon Deputy State Treasurer Linda Haglund. Bateman was also Vice President for Research and Operations at the Investor Responsibility Research Center (IRRC) and also served on the original Steering Committee of the Global Reporting Initiative. Home page

The Government of South Australia has announced
that it will be trialling social impact bonds to tackle homelessness. Health Minister Jack Snelling said: “Social impact bonds are being trialled in New South Wales, with other states investigating establishing programs – but it’s still relatively unexplored territory in Australia.” He went on to say the project “has the potential to achieve significant benefits” for the South Australia.Deutsche Bank has taken in another €90m from investors for the European Fund for Southeast Europe (EFSE) which it manages on behalf of German development bank KfW. Launched in 2005, EFSE is a microfinance fund seeking to promote economic development in 16 southeastern European countries. In a statement, Deutsche said that including the money raised from the latest closing, it had taken in €250m from private investors since 2007. EFSE’s total assets are €1.05bn. Investors in the fund are state-owned development banks like the KfW, the European Investment Bank and the World Bank. Its private investors include Steyler Bank, Finance in Motion and Deutsche itself.

Index firm MSCI is removing Chinese solar firm Hanergy Thin Film Power Group from its indices after Hong Kong’s securities regulator last month extended a near two-month suspension of trade in the firm’s shares. It came amid a probe into a sudden plunge in its shares in May – which led to fellow index provider FTSE deleting it from the FTSE China 50 index.

The FTSE All-World ex Coal Index reflected strong relative performance for companies without significant coal exposure for the three month, six month, year-to-date, twelve month, three-year and five-year time periods ended July 31, 2015, according to index provider FTSE Russell. The FTSE All-World ex Coal Index Series captures specific market segments of the FTSE All-World Index after the exclusion of companies that have certain exposure to coal mining or general mining.

The Low Carbon Innovation Fund (LCIF) – managed by specialist energy and environment merchant bank, Turquoise – has realised its second successful exit, achieving almost 2.5 times its original investment and a 60% IRR [internal rate of return] on the sale of its stake in Colchester-based solar developer and EPC contractor, Push Energy. Less than two years after its original investment of £750,000 in October 2013, LCIF has sold its stake as part of a share buy-back for £1.9m.