Responsible Funds, May 31: Church of Sweden backs Generation unlisted equities fund

The Church of Sweden says that during 2018, it decided to invest $20m in a new fund from Generation Investment Management called Sustainable Solutions Fund III, which focuses on unlisted companies. “The companies that the fund invests in offer sustainable solutions in everything from food and e-health to transport, and are found around the world but mainly in the United States,” the Church said in its new Sustainable Investments report. It added that it invested SEK150m (€14m) in SEB’s new micro-financing fund, SEB Impact Opportunity. “It has a slightly broader mandate than its predecessor, and can invest in both larger and smaller projects and companies. This makes it possible to achieve even greater social benefits, with noticeable improvements for the people and the environment concerned.” The Church of Sweden also has a place on the fund’s advisory committee.

Dutch development bank FMO has won a tender to manage the €160m Dutch Fund for Climate and Development (DFCD) alongside SNV Netherlands Development Organisation (SNV), World Wide Fund for Nature (WWF-NL) and Climate Fund Managers (CFM). The collaboration of NGOs and financiers will make investments with the aim of helping countries build climate resilient economies, with the DFCD structured with three separate but operationally linked facilities, each with a thematic sub-sector focus.

Index firm STOXX has launched a series of new benchmark “ESG-X indices”, which use Sustainalytics data to conduct negative screening for sin stocks and norms-based screening in line with the UN Global Compact. The new offering includes an ESG-X version of the flagship EURO STOXX 50 Index, as well as global and emerging markets benchmarks, such as ESG-X versions of the STOXX Global 3000, STOXX Global 1800 and STOXX Emerging Markets 800. According to the company, the STOXX USA 500 ESG-X was launched due to high client demand to apply a standardized European exclusion strategy to the US index. In February, Eurex launched ESG futures on the STOXX Europe 600 ESG-X, which offers a cost-effective way to gain European ESG exposure.

Columbia Threadneedle is relaunching its Threadneedle Ethical UK Equity fund, as the UK Sustainable Equity fund, in order to reflect its new focus on sustainability. It will also change the fund’s benchmark to the FTSE All Share index. The changed name takes effect from July 1.

London-based infrastructure investment manager Ancala Partners has bought a 50% stake in Iceland’s largest private electricity generator from a consortium of 14 Icelandic pension funds. Ancala made the investment in HS Orka through its Ancala Infrastructure Fund II, for an undisclosed sum. Following the transactions, Ancala and Jarðvarmi will each own 50% of the asset, which has been producing renewable energy for 40 years and operates two geothermal powerplants.Allianz Global Investors has added two new SRI products to its emerging market debt range. The Allianz Emerging Markets SRI Bond and Emerging Markets SRI Corporate Bond will exclude investments with low scores according to AllianzGI’s proprietary ESG framework. The funds, which are available to institutional and retail clients, will be managed by Emerging Market Debt CIO Richard House, who joined the firm in June 2018 following a similar role at Standard Life Investments. Both funds are the first of their kind to be launched by AllianzGI, and are among the first to be launched in the industry, according to the firm.

The European Commission and Breakthrough Energy Ventures – the venture capital firm backed by investors including Bill Gates, Jack Ma and Jeff Bezos – have set up a €100m investment clean energy fund.

DWS’s Xtrackers MSCIU SA ESG Leaders Equity ETF (USSG) has reportedly surpassed $1bn in assets in just over two months of trading. USSG was developed in collaboration with Ilmarinen, Finland’s largest pension insurance company, which itself seeded the fund by investing more than €700m ($781m). USSG tracks the MSCI USA ESG Leaders Index and holds 339 stocks, screening out alcohol, weapons, gambling, and other controversial products or activities.

Asset managers Qbera Capital and Steward Redqueen have announced a strategic alliance to improve their sustainability investment offerings. Both organisations claim to be dedicated to sustainability and impact. Ali Shafqat, CEO of Qbera Capital, said: “Many market participants are talking about sustainability, ESG and impact, while positive, this has repercussions on countless frontier and emerging market companies who struggle to attract sustainable capital because they do not have the luxury of dedicated ESG teams to help.”

Alliance Trust has reportedly appointed Hermes Equity Ownership Services (Hermes EOS) to help it better engage on ESG issues.

Australia-based Impact Investment Partners (IIP) has launched the Indigenous Infrastructure Investment fund. It will aim to invest A$500m over five years to fund indigenous infrastructure. Chris Croker, IIP managing director, said: “The launch of the fund is an important step towards increasing indigenous direct economic engagement through employment, procurement and leasing from indigenous landholders.”

US regulators expect ESG investors to justify their approach, while in much of the rest of the world, asset managers must explain “why not” on ESG selection, finds a new paper from Morningstar. The paper, Evolving Approaches to Regulating ESG Investing, says defining key ESG factors and a taxonomy for sustainable investments is critical and that raising the regulatory bar in one country is likely to increase the quality of disclosures in others.