Fund manager Schroders says passive strategies using ESG “may not provide either the financial or sustainability outcomes” expected by investors. Sustainable Investment Analyst Ovidiu Patrascu, in research called Index-based ESG strategies: key things to watch for, notes how passive strategies using ESG measures and exclusion has ballooned in recent years. He writes: “Despite the perception of transparency, many passive products disclose surprisingly little about how they actually implement ESG.” Most of them, he says, rely on a single third-party rating provider, whose methodologies are “hard for most professional investors to decipher”. He goes on to say the methodologies emphasise “tick-the-box policies”. Patrascu, who joined the firm that is known for its active management in 2016, adds: “Our analysis leaves us unconvinced about these funds’ alignment with the changes required by a transition towards a low carbon global economy.”
RobecoSAM has announced the Smart Mobility Strategy to invest in companies “along the entire electric vehicle (EV) value chain”. The fund is tailored to both retail and institutional investors. The SRI house says that by 2030 every third vehicle sold will be electric in 2030 and the total EV market is expected to reach $1.4trn. The strategy hopes to capitalise on this trend. It will be managed by Thiemo Lang, who also runs the RobecoSAM Smart Energy Strategy and the Daiwa SBI Global EV Revolution strategy, an EV sub-advisory mandate launched in Japan in earlier this year. Link
The Principles for Responsible Investment aims to allow voluntary reporting on hedge funds in the 2019 Reporting Framework and is consulting signatories. It said: “The module will drive asset owner and hedge fund manager dialogue to incorporate ESG factors in the investment process across different hedge fund strategies.” The survey continues until September 4.
BIMB Investments, a Malaysian sharia-compliant bank, has launched the BIMB ESG Sukuk Fund, billed the first of its kind. The strategy will incorporate ESG criteria through Arabesque’s proprietary S-Ray data tool and will also measure corporate performance against the principles of the UN Global Compact, in addition to financial performance. BIMB targets a 5% yield and a take-up of RM150m ($36.5m) in the first year.Local Government Super (LGS), the Australian super fund that uses a responsible investment approach, has awarded an AU$440m (€272.8m) fixed-income ESG mandate to PIMCO. According to the fund’s Chief Investment Officer Craig Turnbull, this is the first ESG mandate for global credit and government bonds awarded by LGS, and is a “relatively new concept for both the Australian and global market”. Commenting on the award, Adrian Stewart, Head of PIMCO Australia, said that it is “no longer enough just to screen out undesirable categories; investors want to foster positive social change”.
The Australian Catholic Superannuation and Retirement Fund (ACSRF) has awarded Robeco a mandate for its Emerging Markets Sustainable Active Equities strategy. The strategy combines quant investing, emerging markets and sustainability investing, and will involve close collaboration with sister company RobecoSAM. The fund aims to beat the MSCI Emerging Markets Index.
UBS Global Wealth Management will reportedly launch three sustainable UCITS funds for its clients later this year. Three options available under this strategy are yield, balanced and growth portfolios.
Fund data platform Fundinfo has partnered
with MSCI to implement holdings-based ESG data within Digital-Advisor, its database of funds in Europe and Asia. With this, fund selectors are now able to screen for funds that achieve the highest holdings-based MSCI ESG quality scores.
Wells Fargo, the listed bank, has announced a philanthropic commitment of $5m over three years to support solar projects in tribal communities across the US. The donation to nonprofit GRID Alternatives supports the founding of GRID’s new Tribal Solar Accelerator Fund. The fund is an extension of GRID’s National Tribal Program and aims to catalyze the growth of solar energy and expand solar job opportunities on tribal lands. It’s part of Wells Fargo’s $50m commitment to help address economic, social, and environmental needs of American Indian/Alaska Native communities.