Responsible Funds, July 5: Japan’s Dai-ichi Life to use Arabesque data for international ESG equity funds

The Dai-ichi Life Insurance Company, the Japanese giant which manages JPY35trn (€287bn), has announced it is launching foreign equity ESG funds in a bid to bolster its ESG investments. The funds, which will be managed in-house, will rely on Arabesque S-Ray data to build their portfolios. It would also begin “impact investment in domestic listed stocks in addition to unlisted equity investment”. Dai-ichi said: “As a responsible institutional investor, the Company is striving to enhance its ESG investment by strengthening ESG integration and impact investments, in order to contribute to the realization of a sustainable society as well as improve its medium- to long-term profitability.”

The Australian responsible investment market is nearing the A$1trn (€622bn) mark according to the latest benchmark report from the Responsible Investment Association Australasia (RIAA). It found the market has grown 13% in the past year to A$980bn in assets under management. RIAA said responsible investment funds “continue to outperform mainstream funds over most time frames and asset classes”. The body added that consumers using its online tool are searching mainly for funds that screen out fossil fuels and human rights violations – while the most common exclusions for funds are controversial weapons and tobacco.

VicSuper’s Socially Conscious investment option has seen its funds under management grow by 68% to over A$600m over the last year. Originally launched in 2001 as the Equity Growth Sustainability investment option, it was relaunched in February 2017 as Socially Conscious. The Australian superannuation scheme said the growth in funds reflected the increasing importance members were giving to social and environmental issues.

Aviva has launched an ESG default fund for workplace pensions. The fund, which is to be managed by Aviva Investors, will exclude, measure and engage companies on ESG issues. Businesses using Aviva’s workplace pension scheme can use the option – which is called the ‘Stewardship lifestyle strategy’ – as their default or offer it to employees as an alternative to their existing default.

London-based green investment manager Glennmont Partners is to take a minority stake in the German offshore Gode Wind 1 project. The acquisition is the first offshore wind investment to be realised from Glennmont’s €850m Clean Energy Fund III, which achieved its final close in June. The stake will be acquired from current 50% owner Global Infrastructure Partners II. Danish wind project developer Orsted holds the remaining 50% stake, while GIP looks set to sell its remaining 25% stake in Gode Wind 1 to The Renewables Infrastructure Group Limited. No financial details of the deal were disclosed.

The Actiam Sustainable Euro Fixed Income fund has surged to €2.9bn less than one month after coming to market, Citywire Selector has reported. Actiam reportedly said that high demand from Dutch insurance companies and retail investors had driven the inflows into the Luxembourg-domiciled fund, which launched on May 17. The fund is managed by Co-Head of Fixed Income and Multi-Asset Johan Idema, as well as Senior Portfolio Managers Mehdi Abdi and Chris Brils.Legal & General Investment Management has launched the L&G Clean Water UCITS ETF, which tracks the new Solactive Clean Water Index, in a bid to increase access to safe drinking water globally. The index tracks companies actively engaged in the international clean water industry through the provision of technological, digital, engineering, utility, or other services. The exchange traded fund is listed on the London Stock Exchange under the ticker GLUG.

Germany’s DWS Group has launched what it says is the US market’s first S&P 500 ESG ETF – the Xtrackers S&P 500 ESG ETF (NYSE Arca: SNPE). The S&P 500 ESG Index, launched in April, takes from S&P DJI’s most well-known benchmark and provides an ESG criteria selection overlay. It excludes companies with disqualifying UN Global Compact scores and business involvement in tobacco or controversial weapons, then targets 75% of the traditional S&P 500’s market capitalization at the industry-level based on their Global Industry Classification Standard (GICS).

Dutch financial services provider ABN AMRO has invested in German solar technology firm Ideematec through the €200m ABN AMRO Energy Transition Fund. The fund typically makes equity capital investments in the range of €10m-€25m in companies receiving at least 50% of their revenue from the energy transition. Ideematec supplies solar tracking systems for solar parks.

LGPS Central, one of eight UK local authority pension pools, has confirmed it will launch the LGPS Central Limited All World Equity Climate Multi Factor Fund later this year, after receiving approval from the Financial Conduct Authority. It is the seventh LGPS Central sub-fund to gain FCA approval. Next steps include preparations for asset transition and launch of the fund later in the year.

State Street Global Advisors has launched its first ESG money market fund. The State Street ESG Liquid Reserves Fund uses SSGA’s R-Factor methodology to score issuers on their ESG credentials. The portfolio construction process is a multi-step method involving fundamental risk budget allocation, optimization, and ESG assessment.

Daily inflows are up tenfold for the Threadneedle UK Social Bond Fund compared to January, when the fund hit five years old. Assets under management, now standing at £147m, are also up 35% year-to-date. Simon Bond, Director of Responsible Investment Portfolio Management at Columbia Threadneedle, said while a lot of growth had come from existing investors increasing commitments, the five-year performance had also encouraged newcomers.

AXA Investment Managers has been selected to manage a £175m multi-asset mandate for mutual insurance provider Foresters Friendly Society. According to AXA IM, the mandate is designed to allow for Foresters’ growth plans and enhancement of ESG integration. Eighty percent of the mandate, which will be led by portfolio manager Andrew Etherington, will be invested in traditional assets, allowing for a 20% allocation to alternative investments. There is capacity for the mandate to grow to £300m in the medium-term.