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Responsible Funds, March 11: Norges Bank’s environmental mandates return 1.1%

The round-up of the latest responsible funds news

Norges Bank Investment Management’s environmental mandates returned 1.1% in 2015, according to its 2015 annual report. It said: “The investments had a market value of NOK53.8bn (€5.7bn) at the end of the year and were spread across 224 companies.” Overall, NBIM, manager of Norway’s Government Pension Fund Global, returned 2.7% in 2015. Equities returned 3.8%, while fixed-income investments returned 0.3% percent. Investments in real estate returned 10%.

State Street Global Advisors has launched a gender diversity exchange traded fund (ETF) investing in an index of companies with higher levels of gender diversity in senior leadership and offering core US large Cap exposure. State Street was inspired to develop the index by CalSTRS efforts to move the needle on gender diversity in corporate America, especially for women in leadership positions.

The Securities and Exchange Commission (SEC) has reportedly shut down an entity that called itself “a socially responsible hedge fund” after uncovering a fraud. Citing a cease and desist order from the SEC, the website Value Walk says Steven Zoernack ran a shell company called ‘EquityStar.’ With this would-be hedge fund, Zoernack took in $5.6m (€5.1m) from 40 investors. Yet the SEC charges Zoernack with embezzling at least some of the money. According to the regulator, he withdrew more than $1m between February 2012 and May 2014. The SEC also accuses Zoernack of lying to fund rating agency Morningstar about his fund’s performance and how much in assets it actually accumulated. Zoernack also paid an IT firm $10,000 to suppress information about him in search engine results, the SEC said.

Registrations are now open for the Australian Council of Superannuation Investors’ 2016 Annual Conference. It takes place in Melbourne and speakers include Michael Woodford: Former President & CEO of the Olympus Corporation, Fiona Reynolds, Managing Director of the Principles for Responsible Investment and Emma Herd, CEO of the Investor Group on Climate Change (IGCC). Link

The California Public Employees’ Retirement System (CalPERS) has settled its negligent ratings case against Moody’s for $130m. The case stemmed from Moody’s erroneous ratings of “AAA” rated structured investment vehicles prior to the financial crisis. Early in 2015, CalPERS settled with defendant Standard & Poor’s (S&P) for $125m, bringing total recovery from the now-concluded lawsuit to $255m.A new index targeting bonds from low-carbon corporate issuers has been launched by Solactive, a German index firm and the South Pole Group (SPG), a Swiss carbon emissions data specialist. The product is called the ‘Solactive SPG Euro IG Low Carbon Bond Index’ and consists of investment grade bonds from 156 companies. The firms were selected on the basis of their lesser reliance on fossil fuels than their peers. In making the selections, Solactive and SPG used data supplied by ESG research firm Sustainalytics.

A consortium of five international NGOs, led by Christian Aid, have created Access to Capital for Rural Enterprise, a platform to help rural enterprises to connect with investors. Through their in-field presence and programmes, the NGOs will work with rural enterprises to develop an investment pipeline.

The European Investment Bank (EIB) has provided almost €53m for the construction of new wind parks in Sweden and Austria. On Monday (March 7), the EIB said that via a fund managed by France’s Mirova, it was investing €16m in a Swedish wind park. The 20MW park, known as Langmarken, will be built and operated by Swedish wind energy from Eolus. Yesterday (March 9), the EIB said it had provided a €36.7m loan for the construction of a 42MW wind park in the Austrian region of Styria. The borrower is Windpark Pretul, an affiliate of a state-owned forestry firm. Both wind parks are to be commissioned in the first quarter of 2017.

Staying with the EIB, the bank also said this week its board had approved €4.7bn in loans to finance 25 new infrastructure projects. Among the projects to be funded are renewable energy projects across Europe; new roads in France and the Netherlands; commuter trains in Germany; and the relocation of an Irish container port. The EIB also said two of the loans from the €4.7bn package would go to banks in Egypt and Lebanon which finance small and medium enterprises (SMEs).

The Government of Sweden, Power Africa and the Renewable Energy and Energy Efficiency Partnership (REEEP) have launched Power Africa: Beyond the Grid Fund for Zambia, a new market-based undertaking to bring clean energy access to one million Zambians and accelerate private sector growth in energy generation and distribution in the country. REEEP will manage the fund, which will be capitalized with up to €20m.

Japan will enact a governance code for auditors to boost investor confidence in Japanese corporations following the Toshiba accounting scandal. The Nikkei Asian Review reports that a research commission for the ruling Liberal Democratic Party will recommend the establishment of the new code by the end of the month.