Responsible Funds, Jan. 3: LuxFLAG awards sustainable label to 26 new funds

The Luxembourg Finance Labelling Agency (LuxFLAG), the administrator of the Grand Duchy’s LuxFLAG sustainable funds label, has recognised 26 new funds under the scheme, bringing the total of badged investment products to 183. Out of this total, 101 funds have been categorised under the ESG designation, 3 under Climate Finance, 11 under Environment, 32 under Microfinance and 21 under Green Bonds.

Fundación Repsol, the philanthropic arm of Spanish oil major Repsol, has taken a 21.39% stake in reforestation and environmental consultants Sylvestris through its $50m Repsol Impacto Social fund which aims to support the “energy transition and the inclusion of vulnerable populations”. According to a release, the acquisition will fund reforestation across more than 2,200 hectares by 2024, achieving an absorption rate of 165,000 tonnes of CO2.

Clarmondial, a Swiss impact investment firm, is due to announce a $15m commitment to its Food Securities Fund from the grantmaking environmental organisation, the Global Environment Facility (GEF), according to a LinkedIn post by Tanja Havemann, Clarmondial co-Founder and Director. The fund, which has a partial $37.5m credit guarantee from USAID, will provide loans to agricultural players in the developing world implementing best-in-class environmental and social practices. The firm will announce the fund’s private-sector anchor investor and launch the fund in the first quarter of 2020, said Havemann.

China Alliance of Social Value Investment (CASVI) and Bosera Funds have jointly launched China's First Sustainable Development Themed exchange traded fund according to an announcement from CASVI. The Bosera CSI Sustainable Development 100 ETF tracks the CSI Sustainable Development 100 Index which is comprised of the top 100 best performing listed companies scored on a proprietary ESG evaluation framework.

Greencoat UK Wind, the London-listed renewables infrastructure fund, has committed to acquiring Windy Rig and Twentyshilling wind farms for a combined value of £104m (€164.4m) upon completion. Windy Rig (43.2MW) and Twentyshilling (37.8MW) are located in Dumfries and Galloway respectively, and are estimated to be completely operational by Q2 2021 and Q3 2021.

Fixed income manager PIMCO has launched an ETF which tracks the Research Affiliates RAFI ESG US Index, a long-only, smart beta index which overweights ESG top-performers among US listed equities, excludes ESG laggards and supplements traditional ESG metrics by considering “financial discipline and diversity for improved return potential”. 

Germany is due to issue a multi-billion euro green bond in the second half of 2020 – its first green issuance – according to the state-run German Finance Agency which oversees government borrowing. Tammo Diemer, Managing Director of the Finance Agency, said that the value of the issue, in billions, would be somewhere between a high-single digit to low double-digit. The upcoming security, which will meet the Green Bond Principles criteria, is to carry the same maturity and coupon as conventional German treasuries or Bunds.

US Solar Fund plc, the London-listed entity that is managed by New Energy Solar Manager (NESM), has closed the acquisition of 100% of the cash equity interests in five operating utility-scale solar power projects totalling approximately 28MW in North Carolina. These five projects are part of the acquisition from Greenbacker Renewable Energy Company announced on December 27. NESM is owned by Walsh & Company, the funds management division of Australian-listed Evans Dixon.

BMO Global Asset Management (BMO GAM), formerly the ESG-focused F&C Asset Management, has had a $1.1bn mandate revoked by the Illinois Municipal Retirement Fund (IMRF). BMO GAM, part of Canada’s Bank of Montreal and which boasts an independent Responsible Investment Council including Archbishop of Canterbury Justin Welby, previously managed a US Large Cap portfolio for the IMRF, which had previously been flagged for poor performance by the pension fund. The freed up capital will be reallocated to a new internal domestic equity portfolio, benchmarked to a Scientific Beta US Value factor index.