Responsible Funds, August 21: Japan becoming more investable for ethical funds

The round-up of the latest responsible funds news.

A new Catholic values index has been launched S&P Dow Jones Indices. The S&P 500 Catholic Values Index is designed to include the companies within the S&P 500 whose business practices adhere to the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops – and exclude those that do not. The Index has been licensed to Global X for product development. “I welcome the creation of the S&P 500 Catholic Values Index and support its specific selection rules. It is important that investors now have a representative measure of the performance of those S&P 500 companies that adhere to the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops,” states Father Séamus Finn, Chief of Faith Consistent Investing, Oblate International Pastoral Investment Trust.

The Responsible Investment Association Australasia (RIAA), the industry body representing responsible and ethical investors across Australia and New Zealand, has certified Teachers Mutual Bank’s wholesale cash product as an ethical fund. The Debt Issuance Program is an AU$500m fund and has negative screens in place that prohibit using funds raised from lending to, or investing in, “large scale greenhouse gas polluting activities (from fossil fuel exploration, extraction, production and use),” according to Teachers Mutual Bank. New members to RIAA include Altius Asset Management, Catholic Super and First State Super. Link

Japan is becoming more investable for ethical funds, according to a report citing Alliance Trust Investments fund manager Simon Clements. Investment Week quoted the ethical fund manager as saying the country’s recent government moves have boosted corporate governance. “We really like Japan. They have good corporate governance now and are moving really quickly in terms of improving that,” he was quoted
as saying.

US renewable power firm SunEdison has teamed up with Goldman Sachs to create a new $1bn (€904m) investment vehicle to finance the purchase and construction of renewable assets. In a statement, SunEdison said West Street Infrastructure Partners III, a fund managed by Goldman, would provide $300m in equity for the vehicle, to be called ‘WSIP Warehouse.’ Up to another $700m in debt finance for the vehicle would come from a consortium of banks including Bank of America, Deutsche Bank and Morgan Stanley, SunEdison said. It added that subject to certain conditions, it had the option of tapping as much as $2bn for WSIP Warehouse. Announcement

The World Bank’s IFC arm has teamed up with renewable energy developer Asia Green Capital Partners to co-develop the first wind-power project in Indonesia’s South Sulawesi province. A memorandum of understanding has been signed to develop the 62.5MW Jeneponto 1 wind farm. It will be tied to the South Sulawesi electricity grid and is expected to produce a net annual energy yield exceeding 200 gigawatts per hour – enough electricity to supply to more than 450,000 people and help avoid 120,000 tons of carbon dioxide emissions a year. The IFC is funding the project – its first wind investment in East Asia – through its $150m IFC InfraVentures fund. Announcement

A package of funding and support for ‘real farming’ has reportedly been launched in the UK. Co-operative News reported that the Just Growth programme from the Co-operative & Community Finance in partnership with the Real Farming Trust and the Esmée Fairbairn Foundation, aims to “nurture community enterprises that are farming and producing food an environmentally and socially responsible way”. Link*The United States Agency for International Development* (USAID) has announced an investment initiative for India under which it will provide $41m (€36.3m) in finance for off-grid renewable energy infrastructure. According to press reports, the initiative is the result of agreements signed between India and the US earlier this year. It is specifically designed to electrify rural areas of the country that are not on the national grid, the reports said. By 2022, the Indian government wants to have 100GW of photovoltaic capacity installed, 40GW of which is to come from rooftop solar power systems.

German infrastructure investor Aquila Capital says it has acquired a UK solar park with a capacity of just under 10MW, bringing its track record with such investments to 505MW. Financial terms were not disclosed. The solar park, located near Sheffield, was developed by British firm Blue Planet Solar and Pfalzsolar, a German peer. Said Susanne Wermter, Head of Aquila’s Special Investment Team: “This is the second photovoltaic plant that we have acquired in the UK this year. We believe Britain’s support scheme and the relatively high energy prices provide an attractive investment case.” Founded in 2001, Hamburg-based Aquila Capital currently has €8.4bn under management.

Deka, an asset manager owned by German Sparkassen (savings banks), has launched a new exchange traded fund (ETF) that invests in euro zone companies that score highly on sustainability criteria. In selecting the ETF’s investees, Deka applies exclusion criteria, including companies involved with weapons, nuclear power or oil and gas production. Firms that violate labour or human rights are also shunned. The selection is then whittled down to 30 by picking firms that have ‘prime status’ from German sustainability ratings firm Oekom and that offer the biggest market capitalisations. The top six holdings of the ETF, called Deka Oekom Euro Nachhaltigkeit, are: Daimler, Siemens, Allianz, BNP Paribas, Telefonica and SAP.

Capital Stage, a listed German renewables investor, has paid €17m to acquire a solar park in eastern Germany from GP Joule, the park’s developer. Located in the German state of Saxony-Anhalt, the park consists of two photovoltaic (PV) power plants that have a combined capacity of 14MW. The acquisition relates to a mandate that Capital Stage won from German insurer Gothaer last December. Under the mandate, Hamburg-based Capital Stage is investing €150m on behalf of the insurer in solar parks in Germany, France and Italy.
Link to GP Joule statement (German):

CHORUS Clean Energy AG, the German renewable fund provider that postponed its initial public offering (IPO) due to recent market turbulence, has reported strong revenue and profit figures for the first half of 2015. In an ad-hoc statement, CHORUS said sales in the first half totalled €30.9m, or 5% higher than its own target. EBITDA (earnings before interest, taxes, depreciation and amortization) for the period totalled €24.5m, which CHORUS said reflected a profit margin of 80%. At €7.3m, net profit was also above internal targets, the firm said. With respect to the second half of 2015, CHORUS said its renewable funds had a potential investment pipeline equalling 800MW.