In a week that has seen ESG fund developments from the likes of PIMCO, Northern Trust and Lombard Odier, here’s our round-up of the other key responsible funds news.
BNP Paribas has launched a new equity fund to “offer access to European companies with greater environmental awareness”. The BNP Paribas Easy Low Carbon 100 Europe UCITS Exchange-Traded Fund has this week become tradable on the Xetra and Borse Frankfurt and invests in 100 companies that score highly on criteria such as energy efficiency, global warming policy transparency and commitment to green activities. Sectors such as tobacco and arms are excluded. Its ongoing charges are 0.6%.
Canada’s iA Clarington Investments has launched a fixed-income SRI fund focused on government and corporate bonds. Vancity Investment Management will be sub-advisors to the fund, which will use its SRI methodology. Jeffrey Lew, Andrew Simpson and Dermot Foley will manage the fund. “We’re seeing increased interest in our SRI offerings,” said Eric Frape, Senior Vice President of Products & Investments at iA Clarington. “One of the unique aspects of the IA Clarington Inhance Bond SRI Fund is that, in addition to adhering to a responsible investment philosophy, the Fund will be a fossil fuel free fixed-income solution.” iA Clarington has more than C$14bn under management.
Independent investment banking advisory and asset management firm Conquest has launched its renewable power fund, Conquest Renewable Yield Europe – which is dedicated to acquiring and managing renewable power generation real assets. It said: “These assets are initially sourced from partnerships signed with large renowned renewable energy players.” The offering has a 20-year ‘buy-and-hold’ investment thesis, which can be extended to 30 years, and will deploy capital to acquire renewable real assets, with a ready-for-construction or brownfield profile, providing long-term inflation-linked annual yield to investors.
President Obama has pumped another $500m into the UN’s Green Climate Fund in a bid to get contributions up before Donald Trump takes the reins in the US. The fund, which was set up in 2010 to take donations from developed nations to help fund climate change adaptation and mitigation efforts in developing countries, was promised $3bn in grants from the US. This is the second $500m transfer to be made under Obama and brings the actual payment to $1bn. The remaining $2bn is expected to be cancelled by Trump.
Impax has measured the net environmental impact of its Leaders Strategy for the first time. Using a methodology it launched in 2015, the AIM-listed environmental specialist measures tonnes of CO2 emitted vs tonnes of CO2 avoided; MWh of renewable energy generated; megalitres of water provided, saved or treated; and tonnes of materials recovered and waste treated. The Leaders Strategy was shown to have a positive environmental impact compared with the global economy, but not as positive as its ‘Specialists Strategy’ (known as Impax Environmental Markets in the UK), which is invests in global pureplay environmental solutions companies. Impax claims to be the first asset manager to perform this kind of assessment for a listed equity strategy – instead of simply carbon footprinting – but says it hopes others will follow suit.Australian exchange traded fund firm BetaShares, part of the Mirae Asset Global Investments Group, has launched a sustainability ETF saying that “with a single trade, investors can get exposure to a diversified portfolio of sustainable, ethical companies from a broad range of global locations”. The Global Sustainability Leaders ETF (ASX: ETHI), is claimed to be the first global equities ETF available on the Australian exchange that uses a broad set of ethical eligibility screens. BetaShares manages more than A$3.3bn (€2.3bn) in assets. The fund invests in 100 large global stocks from developed market countries (excluding Australia) that are climate change leaders. “In addition, ETHI uses a broad set of ethical eligibility screens to remove companies that have exposure to fossil fuels, gambling, tobacco, armaments, human rights concerns and other activities deemed inconsistent with responsible investment best practice.” Link
The UK’s Alliance Trust has hired eight external fund managers, after selling its in-house investment business to Liontrust Asset Management and hiring consultant Willis Towers Watson to help it appoint a panel of third-party managers. It followed pressure from its largest shareholder, hedge fund Elliott Advisors. The managers chosen to run its global stock market investments are: Black Creek Investment Management, First Pacific Advisors, GQG Partners, Jupiter Asset Management, Lyrical Asset Management, River and Mercantile Asset Management, Sustainable Growth Adviser, and Veritas Asset Management, reports the Daily Telegraph.
Sustainalytics’ Jantzi Social Index increased in value by 1.77% in December, against a benchmark increase of 1.66%. The index was created in 2000 by Jantzi Research – now Sustainalytics – and comprises 50 Canadian companies that meet a set of ESG expectations. Since inception, it has achieved an annualized return of 6.53%, according to Sustainalytics, outperforming the S&P/TSX 60, which returned 6.09%. The sector that made the largest positive contribution to performance was financials, while the materials sector was blamed for the largest negative impact on the index.
This week California’s Insurance Commissioner Dave Jones has announced the results from his Climate Risk Carbon Initiative, which required insurance companies with $100m in annual premium doing business in California to disclose investments in fossil fuels, and all insurance companies to divest from thermal coal. According to the financial data disclosed, insurers have $521bn in fossil fuel-related securities and have so far divested more than $4bn in thermal coal and other fossil fuel investments.
Krull & Company, a responsible investment and planning firm based in North Carolina, has changed its name to Earth Equity Advisors. It has also become an independent Registered Investment Advisory (RIA) firm. Launched in 2004 the firm was certified as a B Corporation in 2013.