Responsible Funds, Feb. 3: Ethos launches corporate governance index with SIX exchange

The round-up of the latest responsible funds news

A new index has been launched on the SIX Swiss Exchange that takes account of compliance with corporate governance principles. The exchange will calculate the Ethos Swiss Corporate Governance Index on behalf of Ethos, the governance advisor backed by pension funds. The new index measures the returns on selected stocks from the basic universe of the Swiss Performance Index (SPI) taking into account best practice requirements in terms of corporate governance defined by Ethos. Announcement

SRI firm Trillium Asset Management has publicly released for the first time proprietary impact reports measuring a range of ESG metrics on its key investment products. “These reports are based on a prior beta version that Trillium introduced to key partners in September,” it said. The impact reports have two primary sections: 1) proxy voting and shareholder advocacy and 2) portfolio exposures in relation to key ESG metrics, such as board diversity, CSR disclosure, and executive compensation.

UBS has launched an exchange-traded fund specialising in corporate bonds from issuers with strong ESG credentials. The UBS Barclays MSCI Euro Area Liquid Corporates Sustainable UCITS ETF is tradable on Deutsche Borse’s Xetra and Frankfurt Stock Exchange. To be included in the Barclays MSCI index, companies must be in the industrial, energy supply or financial sector, and must have an MSCI ESG rating of BBB or above.
Cazenove and Kames Capital are the latest investment firms to list funds on a charity-focused platform launched in November by the Charities Aid Foundation. The CAF Investment Account offers funds from FP CAF, CAF UK Equitrack, Sarasin, M&G Investments, Edentree and Troy Asset Management. The funds are being offered exclusively to charities, and offer some products at lower costs than they are available elsewhere. CAF has invested some £100m of its own capital into an account on the platform. There is no minimum investment amount.
Private equity firm Exeo Capital, which invests across Africa, has reached first close on its second Agri-Vie fund, raising more than $100m from existing investors including its partner Norfund – the Norwegian Investment Fund for Developing Countries. New investors from Europe, Africa and North America also participated. The fund will invest in the food and agribusiness sectors in sub-Saharan Africa, with a view to “making a real and positive impact in the communities and regions it invests in”. The fundraising surpasses Exeo’s initial target by one third. It will remain open to further investment for another year, with a target of $150m and a hard cap of $200m.

The 2016 Canadian Responsible Investment Trends Report has revealed that the country’s responsible investment market is continuing to experience “rapid growth”, according to the Responsible Investment Association. It found the market is now worth C$1.5trn (€1.1trn) in assets under management – a 49% increase over two years; responsible investing represents 38% of the Canadian investment industry. Link*UK-based social impact investment company* Resonance has attracted £45m (€52.2m) in investment from three London local authorities for a property fund seeking to tackle homelessness. The Real Lettings Property Fund 2 will buy homes that will allow charity St Mungo’s to house homeless individuals and families across London. Croydon, Lambeth and Westminster local authorities have made an initial investment of £45m. The first Real Lettings Property Fund launched in 2013 and achieved a close of just under £57m in investment.

The €102.4m Ethical Global Value fund from Sparinvest returned 13.74% in 2016, against a benchmark (MSCI World) return of 10.73%. The Luxembourg-domiciled fund, managed by Kasper Billy Jacobsen and Jens Moestrup Rasmussen, applies an ethical screen and its top three holdings, according to a new fund update, are Regions Financial, Travelers Cos Inc and Microsoft Corp.

Irish Funds, an industry body for the international investment fund community in Ireland, announced that a blockchain technology platform to conduct regulatory reporting is in the works, with the involvement of Deloitte and the support of members such as Northern Trust, State Street and Metzler. Commenting on the initiative, Keith Fingleton, Chief Technology Advisor at IDA Ireland, the country’s inward investment promotion agency, said: “Blockchain is a key disruptive technology that has the potential to revolutionise the funds industry. It is excellent to see Irish Funds taking the lead and developing this proof of concept, which will help prepare their members for the regulatory and technical challenges that lie ahead”. Link

Staying in Ireland, the European Investment Bank and Ireland Strategic Investment Fund (ISIF) have agreed to back a new initiative expected to support €112m of new investment in privately owned forests. This new engagement with Dasos, a specialist forestry investment fund, represents the first Irish agricultural project and the first forest project in Europe to be supported by the €315bn Investment Plan for Europe.

UK-based fund manager EOS Investment Management has acquired a 40MW wind and solar portfolio in Italy for €140m. The assets comprise 35 wind and solar plants. The acquisition was made via EOS’s Efesto Energy Fund, which now owns more than 66MW of renewables, alongside an energy efficiency project agreed in December. It has €240m of assets under management.
New Zealand’s NZ Super Fund ended 2016 on a new high of NZ$32.7bn (€22.2bn), returning 13.2% over the calendar year. The fund, which was set up in 2003 to help pre-fund universal superannuation in the country, has returned 9.9% per annum, which it says puts it “substantially ahead” of both its treasury and markets benchmarks. In October, NZ Super announced a new climate change strategy, which CEO Adrian Orr said “represented a significant and fundamental shift” for the fund.