Responsible Funds, May 26: BlackRock and Vanguard ‘may support climate resolution at Exxon’

The latest responsible funds news.

BlackRock and Vanguard are considering supporting the shareholder proposal on climate change at Exxon, according to reports. The Wall Street Journal cited people familiar with the matter as saying the two firms were “strongly considering” what would be a public rebuke to Exxon at the AGM next week. The proposal has been filed by the New York State Comptroller and the Church Commissioners, and calls on the oil giant to conduct a climate “stress test”. Reuters is also reporting that Fidelity Investments may support shareholder proxy proposals calling on companies to report on sustainability matters this year, which it termed a “major shift” by the Boston-based giant “as climate activists gain more traction” at companies.

South Korea’s former Deputy Prime Minister, Lee Hun-jai, is to launch an impact fund. His new company, Impact Finance Korea, is in the pipeline, according to local reports. It is expected to target “poor entrepreneurs and small business owners”. Hun-jai was also the country’s Finance Minister. His new venture will reportedly be done in collaboration with Korea Social Investment, which will establish the company and take private-sector investments. The initial fundraising target is 70 billion won (€56m), slated for coming months, and it expects to be operational by the end of the year. First close is expected after that, with a goal of 200 billion won.

Swiss asset manager SUSI Partners is launching a €1bn fund – Global Energy Transition Fund – to invest in 15-20 commercial renewable energy infrastructure and offshore wind projects in OECD countries. SUSI recently raised $70m for an energy storage technology fund and $425m for a renewable energy fund.

Columbia Threadneedle Investments has launched a European Social Bond Fund in partnership with INCO. INCO is a Paris-based consortium which seeks to bring together different sectors of society to help develop a sustainable economy. It will act as an independent advisor. The fund, which Threadneedle says will be aligned with the UN Sustainable Development Goals, will buy corporate bonds in Europe that finance projects with “positive outcomes for individuals, communities or society as a whole” such as affordable housing, health, education and employment. Simon Bond, Director of Responsible Investment Portfolio Management, will manage the fund. This is the third social bond fund from Threadneedle, which created the Threadneedle UK Social Bond fund in 2013 with Big Issue Invest, and the US Social Bond fund in 2015.

Acadian Asset Management, the Boston-based firm managing assets of $82bn, has reportedly announced its new sustainability strategy – ‘Emerging Markets ex Fossil Fuel’ – which excludes companies in emerging markets with fossil fuel reserves. Acadian, the first quantitative manager to sign up to the Principles for Responsible Investment, will also employ the strategy to ensure portfolio carbon emissions are 25% lower than those of the benchmark index. The strategy will be managed by Acadian’s Director of Responsible Investing, Asha Mehta.

Dutch asset manager Robeco has launched a fund which will target investments around the energy transition and cyber security, among other things. The Global Industrial Innovation Equities fund will also focus on robotics and digital manufacturing. The fund, managed by Marco van Lent, uses the MSCI World All Countries as a reference index only.Luxembourg now houses 31% of Europe’s ESG funds (representing 35% of total ESG-related AUM), as it strengthens its position as the number one domicile for responsible investing funds in Europe. KPMG Luxembourg’s report, commissioned by ALFI and LuxFLAG, also revealed that the European responsible investing fund market has nearly doubled in size since 2010, reaching €476bn AUM at the end of 2016.

Deutsche Bank has signed an Accreditation Master Agreement (AMA) with the UN’s Green Climate Fund (GCF) enabling the German banking group to utilise the climate fund’s capital to raise further funds from private sector investors and support action on climate change. Last month, HSBC also announced its intention to “leverage funds from the Green Climate Fund” in the bank’s ESG report. The International Finance Corporation is another institutional also known to be completing accreditation. The GCF was set up to receive donor money from developed economies to finance climate adaptation and mitigation projects in emerging markets.

WHEB Asset Management has published its latest impact report for the year ending 2016 that for the first time has data on the positive environmental impact of the FP WHEB Sustainability Fund. According to its calculations, for every £1m invested in the fund, 1,600 tonnes of CO2 was avoided and 140 tonnes of waste material was recycled or recovered. The fund saw AUM grow by 51% to £124m and it contributes directly to seven UN Sustainable Development Goals, with 35% of the fund investment in companies aligned with SDG 3: good health and well-being.

US asset manager Legg Mason has reportedly launched two new actively-managed responsible ETFs, sub-advised by ESG specialist ClearBridge Investments. The ClearBridge Dividend Strategy ESG ETF (YLDE) seeks to invest in large-cap companies with a strong commitment to ESG principles, and the ClearBridge Large Cap Growth ESG ETF (LRGE) in high-quality companies with a strong commitment to ESG principles that can increasingly pay dividends over time

A £4.5m UK-based social investment fund for homelessness charities is set to be launched next month. Financed by Access – The Foundation for Social Investment, the fund will offer homelessness organisations unsecured loans over the next three years to test where/how social investment can be most effectively be deployed.

Specialist investment manager Artesian has reportedly raised A$26m for its Australian Clean Energy Seed Fund, with A$10m coming from Australian Government-owned green investment bank, Clean Energy Finance Corporation and ESG investment firm, Australian Ethical Investment. The fund will invest in ‘seed stage’ start-ups via dedicated clean energy platforms such as EnergyLab.

Nestlé Waters North America, the US bottled water supplier, has announced it is investing $6m in the Closed Loop Fund, the US $100m social impact investment fund seeking recycling solutions. Nestlé is the latest corporate giant to contribute to the fund, joining the likes of Coca-Cola, Goldman Sachs and Unilever.