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Responsible Funds, Jan. 24: BlackRock, BMO, Nordea, BNP Paribas, KPA Pension

The latest responsible funds news

Standard Chartered Private Bank is now reviewing the ESG characteristics of all “sustainable” products on its platform in a bid to address greenwashing concerns among high net worth clients. According to the firm, the new ESG review process – called ESG Select – will seek to evaluate solutions in order to manage the potential negative impact of ESG risks and spot opportunities to drive positive impact. ESG Select is tailored to each asset class with funds and discretionary portfolio solutions following a similar assessment process, while bonds and structured products are separately assessed on different sets of criteria. 

BlackRock, together with government and charity partners, has unveiled a new $500m private equity fund for climate-related infrastructure investments in emerging markets. The giant fund manager has put in an initial $100m to the Climate Finance Partnership to absorb any initial losses and help raise at least another $400m. France, through AFD, and Germany, with the KfW acting as a trustee, will contribute $30m each to the partnership, with the William and Flora Hewlett Foundation and the Jeremy and Hannelore Grantham Environmental Trust committing $10m and $7.5m respectively. 

Canada’s BMO has listed a new suite of ESG ETFs on the Toronto Stock Exchange. The funds include the multi-asset BMO Balanced ESG ETF (ZESG); two corporate bond indexes; and the best in class BMO MSCI Global ESG Leaders Index ETF (ESGG), BMO MSCI Canada ESG Leaders Index ETF (ESGA), BMO MSCI EAFE ESG Leaders Index ETF (ESGE), and BMO MSCI USA ESG Leaders Index ETF (ESGY). 

Online asset manager AtlasTrend is launching an SDG-focused retail superannuation fund. The new fund, Elevate Super, will assess and measure investments based on their contribution to the US Sustainable Development Goals (SDGs). Investments will be given a score for each of the 17 goals. Based on a ranking from the company’s sustainability data provider, Sustainable Platform, the ASX 200 would have an SDG score of 50 out of 100, while Elevate Super’s balanced and growth portfolios both score 63.

Nordea Asset Management has opened up three of its climate funds to UK investors – the €2.2bn Nordea 1 – Global Climate and Environment fund, and the €2.6bn Nordea 1 – Emerging Stars Equity fund, and the €784m Nordea 1 – Global Stars Equity fund.

State Street Global Advisors is offering customisable equity and bond portfolios allowing clients to select their carbon reduction target range. The Low-Carbon Equity Index Solution allows clients to set their preferred level of targeted carbon emission reduction or tracking error – offering, for example, 60% carbon reduction with 0.35% tracking error. The State Street Low-Carbon Corporate Bond Strategy, meanwhile, looks to create customized portfolios that achieve the client’s goals for carbon reduction within constraints for tracking error, credit quality, duration, interest rate exposure and other factors.

Mirae Asset Global Investments has launched two environmental thematic ETFs. The Global X China Clean Energy ETF tracks the Solactive China Clean Energy Index, offers exposure to China’s renewable energy industry, while an ETF tracking the Global X China Electric Vehicle ETF will seek to capitalise on China’s EV market, the largest in the world. 

KPA Pension, part of Folksam Group, has invested SEK 450m (€42.6m) in a green forest fund, according to media reports. Folksam Group has invested a total of SEK 1bn (€94.7m) in the Silvestica Green Forest Fund, made up of SEK 450m (€42.6m) from KPA Pension, SEK 440m (€41.7) from Folksam Life, and SEK 110m (€10.4m) from Folksam Sak.

BNP Paribas has launched a global version of its THEAM Quant Europe Climate Carbon Offset Plan, which selects equities leading on ESG, carbon footprint reduction, and energy transition strategy and aims to offset the strategy’s remaining carbon emissions. The THEAM Quant World Climate Carbon Offset Plan fund uses a team-based quant approach and will be managed by Marie Barberot, who manages three Theam Quant funds already. The European strategy has hit €300m AUM since it launched in March 2019, bringing the total assets of the Theam Quant Climate Care and Sustainable Development Goals linked solutions to €1bn.

US-based Tiedemann Advisors is launching a program to facilitate impact investments among wealthy clients, in partnership with fintech firm StoneCastle. This program, called FICA Impact (Federally Insured Cash Account Impact), will allow investors to invest in more than 700 community banks that will redeploy funding to create jobs, build infrastructure and schools, and expand social programs.

Citi has launched a $150m impact investing fund that will make equity investments in start-ups making a “positive impact on society”, focusing on women and minority entrepreneurs. The Citi Impact Fund will invest in “innovative solutions” to help address four societal challenges: workforce development, financial capability, physical and social infrastructure, and sustainability. 

ORIX Corporation, the sprawling Japanese conglomerate which owns sustainable Dutch manager Robeco among others, is to issue a JPY10bn ($91.3m) green bond – the first for the domestic Japanese market. The security will have a coupon rate of 0.19% and a maturity of five years. Capital raised will be allocated to Orix's solar power generation business – the unit aims to develop a total capacity of approximately 1,000MW in Japan – and is the basis of a positive second party opinion from Sustainalytics.