Responsible Funds, December 4: FMO, NEI, State Street, BlackRock, EuSEF

The round-up of the latest responsible funds news

Dutch development bank FMO and infrastructure specialists Phoenix InfraWorks have launched, at the UN’s COP21 conference, an infrastructure orientated climate fund, Climate Investor One. Designed to encourage private sector investment in renewable energy projects in developing countries, the fund will be managed by Dutch-based, Climate Fund Managers UA. The Dutch Government announced at the launch a €50m contribution to the fund which has already received a £50m expression of interest from the UK government and $75m from the FMO.

NEI, the Canadian mutual fund company, is planning to launch a new fund titled NEI Environmental Leaders. The fund, which is sub-advised by London-based Impax Asset Management, ‘rounds out’ NEI’s energy transition strategy, a strategy involves corporate engagement with oil and gas companies and exclusions of fossil fuel firms who refute the science of climate change. It will be launched in the new year.

BlackRock, the giant asset manager, is buying UK-based onshore wind farm firm, Renewable Energy Generation (REG) for £64.5m. Renewable energy firms and onshore wind farms in particular have suffered in the UK amid government cuts to renewables subsidies and policy changes, with shares in REG dropping by more than half since early 2014. RI Income Holdings Ltd., a company controlled by Blackrock Renewable Income Fund, will pay around 60p per share. Link

ImpactAssets, a US-based non-profit financial services firm, has launched two debt securities that are designed to deliver impact and financial returns. The ImpactAssets Microfinance Plus and Global Sustainable Agriculture Notes have a minimum investment of $25,000, significantly lower than most currently available theme-specific debt and equity impact investment options, it said. The two offerings are each five-year debt securities designed to target a competitive interest rate, be held in brokerage accounts and have a limited liquidity feature.

The European Commission will amend existing legislation governing EuSEF, European Social Entrepreneurship funds, and the fellow venture capital structure EuVECA, according to a senior official. “We will start by amending existing EU legislation – EuVECA and EuSEF which have the potential to work much better,” said Jonathan Hill, European Commissioner for Financial Stability, Financial Services and Capital Markets Union. “We want to make it easier for more funds to participate, and to be active in more investments.”State Street Global Advisors, the US-based fund manager with $2.4trn in assets under management, has reportedly launched its first fossil-fuel free exchange-traded fund (ETF), citing investors’ concerns over climate change as its driver. The ETF is among the first of its kind offered in the United States – US investment company Etho Capital launched an ETF similar to State Street’s earlier this year.

John Laing Environmental Asset Group Ltd. (JLEN), the UK-based environmental infrastructure investor, has announced its acquisition of Burton Wold Extension wind farm in Northhampton in central England from parent company John Laing Group plc for £21.8m. The acquisition was reportedly funded by a “draw-down” under the Company’s £50m revolving credit facility and reinvestment of cash. This is the latest of seven acquisitions, totaling £113m, adding 69MW of capacity to JLEN’s portfolio.

Export Development Canada (EDC), a trade finance agency, has announced plans to issue a second green bond, hoping to raise $300m (€276m) in the process. In a statement, EDC said the bond, which will begin trading after December 8, has a maturity of three years and pays a coupon, or interest rate of 1.25%. The bond’s underwriters are Bank of America, Crédit Agricole and Morgan Stanley. EDC said the proceeds from the issuance would be used to boost its lending in the areas of renewable energy and climate change mitigation. EDC’s green bond programme has been endorsed by CICERO (Centre for International Climate and Environmental Research) in Oslo.

Nasdaq and CRD Analytics have announced the results of the semi-annual re-ranking of the NASDAQ OMX CRD Global Sustainability Index. Added to the index are AT&T, Exelon, Flowserve, Mettler-Toledo International, St. Jude Medical, Thermo Fisher Scientific, Waters Corp. and Xylem. Among eight companies removed are Barrick Gold, Consolidated Edison, General Mills, Proctor & Gamble, Qualcomm and Total.

The Inter-American Development Bank (IADB), which finances development in Latin America and the Caribbean (LAC), has set aside $4.2m (€3.9m) to support grants aimed at reducing poverty in the LAC. “The goal of this facility is to reduce poverty and promote inclusion in the LAC region, through strengthening entrepreneurial activities that generate employment, increase incomes and improve the livelihoods of low-income population,” the bank said on its website.