Responsible Funds, Jan. 17: HESTA in wind deal, US fund flows

The latest responsible funds news

Australian superannuation fund HESTA, which has assets of A$47bn (€29bn), has acquired part ownership of the Snowtown 2 Wind Farm in South Australia through its direct investment mandate with Palisade Investment Partners. 

Sustainable funds in the US attracted new assets at a record pace in 2019, according to reports from Morningstar. Estimated net flows into sustainable open-end funds and ETFs available to US investors totalled $20.6bn for the year—nearly four times the previous record set in 2018. Morningstar found there are 300 mutual funds that either “thoroughly” integrate ESG factors into their investment processes, pursue sustainability-related investment themes, seek measurable sustainable impact alongside financial returns, or that use a combination of the former approaches.

UK investment manager Janus Henderson’s commercial property fund, the Janus Henderson UK Property PAIF, has committed to become operationally net zero carbon across its portfolio by 2030. The fund’s approach will use renewable power purchase agreements and carbon offsetting, with the investment team working closely with tenants to establish net zero carbon plans for the assets that they occupy. Progress will be assessed on an ongoing basis by a recognised independent body.

Swiss energy, food, and water efficiency firm EFW Swiss AG has announced its EFW Efficiency Fund – which tracks the company’s bespoke EFW Efficiency Index – is up 25.55%, net of fees, in 2019. The fund outperformed the MSCI World by 0.36% and outperformed the Dow Jones Sustainability Developed World Index by 1.35%. The EFW Efficiency Index is built around the thesis that financial performance is correlated to a company’s energy, food and water efficiency.

Allianz Global Investors has tweaked one of its multi-asset fund ranges to incorporate an SRI approach. As of December, the Luxembourg-domiciled €2.2bn Allianz Dynamic Multi Asset Strategy 15, 50 and 75 funds, run by Marcus Stahlhacke, use exclusion criteria and ESG best-in-class filters. The asset allocation, investment process, risk management and geographical exposure remain unchanged. The funds, which consist mainly of global equities and euro-denominated bonds, have been renamed Allianz Dynamic Multi Asset Strategy SRI 15, 50 and 75.

The Jantzi Social Index (JSI) decreased in value by 0.96% during December 2019, according to reports from Sustainalytics (formerly Jantzi Research). During the same period, the S&P/TSX Composite Index – the JSI’s underlying universe – increased by 0.45% and the S&P/TSX 60 Index decreased by 0.05%. Launched by Jantzi Research in 2000, the JSI is a market-cap weighted index selecting 50 Canadian companies that meet certain ESG criteria. Since inception, the JSI has achieved yearly return of 6.53%, compared to the S&P/TSX Composite’s 6.25% and the S&P/TSX 60’s 6.28%. 

Swedish fund manager Swedbank Robur has committed to portfolio carbon neutrality by 2040 and alignment with 1.5 degrees by 2025 in its new climate strategy. The updated strategy also extends coal exclusion criteria to a maximum of 5% of the company's turnover, a tightening of the previous 30% limit. 

Japan’s Norinchukin Bank, the JPY 70.8trn Japanese agricultural lender that has become the world's largest holder of collateralised loan obligations (CLOs), is to launch Japan’s first ESG-indexed REIT portfolio, according to media reports. The fund will include around 40 out of the 64 REITs listed on the Tokyo Stock Exchange, and aim to deliver returns equal to or above the Tokyo Stock Exchange REIT Index.