Responsible Funds, Nov. 22: Finland’s Varma targets portfolio carbon neutrality by 2035

Finland’s Varma says it will move its investment portfolio towards carbon neutrality by 2035 and invest in companies that mitigate climate change. They are among the climate targets outlined in the pension insurer’s new Climate Policy for Investments. “Over the past year, it has become clear that emissions must be cut much faster than previously thought in order to keep global warming within the two-degree limit. New information about climate change and its impacts has come to light, which means we must also renew our climate targets,” said CIO Reima Rytsölä. By 2025, one fifth of the investment portfolio will consist of investees that “either directly or indirectly mitigate the advancement of climate change”. In equity investments, oil exploration will be excluded by 2030, and Varma is committed to exiting thermal coal investments by 2025. 

Canadian fund manager NEI Investments has re-named the NEI Jantzi Social Index Fund it inherited when it took over the Meritas funds range last year. It will now be called the NEI ESG Canadian Enhanced Index Fund. NEI is changing the index provider for the fund from Jantzi Social Index/Sustainalytics (Jantzi Research Inc.) to a new custom index calculated by Solactive, the German firm which recently acquired UK governance firm Manifest/Minerva. NEI didn’t explain the reasoning for the change of index and Sustainalytics declined to comment.

ACTIAM has launched the ACTIAM (L) Sustainable Emerging Markets Debt Fund, which invests in government and state-owned company bonds in emerging markets. The UCITS fund is being managed by Ruben Smit and Pim Burggraeve, who are part of the wider Fixed Income & Multi Asset team.

Singapore-based Maitri Asset Management has launched its first fund – the Sustainable Multi-Asset Absolute Return Strategy Fund (Sustainable M.A.R.S. Fund). According to Maitri, the fund uses an ESG-focused proprietary asset allocation model across multiple asset classes globally, including Fixed Income, Currencies, Commodities and Equities. It is actively managed by CIO Ankit Khandelwal. Maitri says that 25% of its goes to the Ishk Tolaram Foundation, which is affiliated with Indonesia’s Tolaram industrial group.

Asset owners are “underinvested in the future and over invested in the past” – that’s the view of KBI Global Investors, the Dublin-based boutique controlled by French giant Amundi. It said  asset owners should increase allocation to sustainable infrastructure “if we are to mitigate the impact of climate change”.

Cornerstone Asset Management, the Scotland-based wealth manager, has worked with by Canaccord Genuity Wealth Management to develop  its new Responsible Future fund range based on the UN Sustainable Development Goals.

Mirova Natural Capital, wholly owned by French responsible investment house, Mirova, has raised an additional $50m for its Althelia Sustainable Ocean Fund (SOF) in its second close, bringing the total number of commitments to $92.  The new commitments come from European institutional investors including KFW, BNP Paribas Cardif and Garance. The fund is open until the end of this year.

Allianz Global Investors (Allianz GI) and KfW, the German development bank, have raised an initial €170m for a fund for joint investment in African companies. The fund of funds, AfricaGrow, provides equity capital for small and medium-sized enterprises and start-ups in Africa and is managed by Allianz GI fund manager Martin Ewald. €85m comes from the Federal Ministry for Economic Cooperation and Development (BMZ), €30m from KfW subsidiary DEG and €55-70 m from Allianz companies. The German Federal Government is providing an additional budget in the tens of millions for accompanying support measures. 

Danish pension fund LD Fonde has picked Nordea Investment Management to run a DKK550m (€72m) green equity strategy. Nordea, which was up against 16 other offers, will take on the LD Environment and Climate mandate in the first quarter of 2020 with a view to expanding it further. LD Fonde is reportedly also searching for a smart beta manager. 

Kairos Partners SGR, the Italian fund manager, has licensed the STOXX Europe 600 ESG-X Index to use as a basis for an actively managed fund. The Kairos International Sicav ActivESG, which Kairos has called “one of the Italian market’s first long/short ESG products”, will invest in mid- and large-cap European stocks.

Legal & General Investment Management America (LGIMA) is using software from US investment platform start-up OpenInvest to offer institutional clients mix-and-match ESG options. According to the companies, OpenInvest is providing LGIMA with front and back end capabilities to “dynamically customised indexed accounts”. 

ESG fund managers in the US are feeling the squeeze from more mainstream competitors, according to a Reuters story. Sustainable funds are set to rake in more than $16bn in net new assets in 2019 (2018: $5.5bn) – but most of this is going to larger managers like BlackRock and Vanguard Group, the report says.

ECube Investment Advisors, an ESG investment platform set up by a group of ex-Tata executives, is collaborating with Indian asset manager Quantum Advisors to launch India’s first active engagement ESG fund. ECube, which is currently fundraising for the product, said its goal is to transform ESG adoption in India Inc. through deep engagement with investee companies through “a very experienced team and an active PE-style engagement approach”.