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Responsible Funds, March 29: Japan GPIF, BNP Paribas, DNCA Investments, Natixis, Ellevest, RBC

The round-up of the latest responsible funds developments

Japan’s $1.6trn Government Pension Investment Fund (GPIF) has hired
the Japanese arm of Legal & General Investment Management as a passive manager of foreign equities. The world’s largest pension fund did not disclose any further details.

France’s BNP Paribas Asset Management has launched what it claims is the first ESG UCITS fund established under French law to include a “carbon offset mechanism”. The THEAM Quant Europe Climate Carbon Offset Plan seeks to combine financial returns from the European equity market with a positive impact on climate change. The fund also aims to offset scope one and two emissions using Verified Emission Reductions certificates (VERs) – also known as carbon credits – from the Kenya based Kasigau Corridor REDD+ project.

Natixis Investment Managers, which named Harald Walkate as its first Head of ESG this month, has created a new Paris-based thematic investment unit which it claims will integrate ESG considerations “throughout the investment decision-making process”. Thematics Asset Management, under former Pictet fund manager Karen Kharmandarian, will focus on safety, water, artificial intelligence and robotics.

UK pooled local government pension firm Brunel Pension Partnership has named Dutch investment manager Robeco as manager for its £400m Low Volatility Global Equities portfolio along with German manager Quoniam. Brunel, whose eight local government pension fund shareholders represent £30bn in assets, have stated that ESG was a considered in their selection process, which was assisted by Redington Investment Consultancy.

Moscow Exchange, the largest Russian securities exchange, has announced a range of sustainability indexes in partnership with the Russian Union of Industrialists and Entrepreneurs (RSPP). The MOEXRSPP Responsibility and Transparency Index comprises of the best 22 companies leading on ESG disclosure, while the MOEXRSPP Sustainability Vector Index features 15 companies demonstrating the most ESG momentum year on year.

A US-based affordable loans company called Aura has completed a $50m private social bond issuance. Proceeds from the bond will be used to fund over 30,000 affordable, credit-building loans across America.

Columbia Threadneedle Investments announced that its UK Social Bond Fund has outperformed both its benchmark and its peers last December – its fifth-year anniversary. The fund was launched in partnership with the Big Issue Group – the homeless charity – with priority outcome areas in affordable housing and utilities / environment.DNCA Investments, a Natixis-affiliated European investor, says its Semperosa fund is the first impact fund to receive a French government-backed SRI label. The fund invests in European equities with positive social and environmental outcomes aligned with the SDGs.

The John Laing Pension Fund has reportedly sold its stake in the John Laing Environmental Assets Group, an investor in renewable assets. The holding was part of a £100m contribution comprising of cash and equities mad in 2015 and is being divested as the pension scheme moves towards investing entirely in gilt assets between 2023 and 2028.

Ellevest, the women-focused investment platform headed by Sallie Krawcheck, the former head of the Global Wealth & Investment Management division of Bank of America, has announced the closing of a $33m funding round with new investors including Melinda Gates, PayPal, former Google CEO Eric Schmidt, Mastercard and Valerie Jarrett. According to Ellevest, it is also seeing promising growth in its private wealth management arm and financial planning service with a client base in all 50 US states.

The Royal Bank of Canada’s RBC iShares has launched the iShares Sustainable Core ETFs, a range of six ESG-focused index exchange traded funds which began trading on the Toronto Stock Exchange at the end of last week. Managed by BlackRock’s Canadian subsidiary, the ETFs provide Canadian, US, global and emerging markets exposure, together with aggregate and short-term bond exposures. The indices apply various screens including tobacco, controversial arms and firearms and corporate controversies.

A $14m environmental impact bond (EIB) has been issued to tackle flooding and improve water quality. The deal was arranged by Quantified Ventures and proceeds from the bond will be used by the City of Atlanta Department of Watershed Management for green infrastructure projects to reduce critical flooding and water quality issues. The Atlanta EIB issuance was supported by a grant from The Rockefeller Foundation with additional underwriting support provided by KeyBanc Capital Markets and Siebert Cisneros Shank.

The Australia and New Zealand Banking Group (ANZ) jointly led Australian housing agency National Housing Finance and Investment Corporation’s inaugural bond issue of A$315m (€198.9m), described as the largest social bond in Australia to date. Proceeds from the 10-year bond will be loaned to community housing providers. ANZ was joint lead manager with UBS for the fixed-rated bond of 10 years at an annual interest rate of less than 2.38%.