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Responsible Funds, Nov. 11: Green Century, PensionDanmark, Erste AM, Allianz Global Investors, Pax Ellevate

The round-up of the latest responsible funds news

Green Century, the US SRI firm, says it is “standing by our principles and the values of our investors” in the wake of the acquisition of fellow SRI firm Calvert by Eaton Vance. “In a time when sustainable, responsible and impact (SRI) investing has gained favor among mainstream investment firms, it can be difficult to determine which managers, funds, and other investment products are authentic in their SRI and environmental, social, and governance (ESG) claims,” it said. It continued: “The pending sale may be shaded in marketing efforts as a way to bring impact investing to the masses, but it’s important to realize that this is a business decision. Eaton Vance is looking to expand by tapping into a growing market segment. And, whether it’s intended or not, Calvert may lose touch with the very clients and stakeholders whose goals it initially set out to promote; it’s simply a common side effect of growth.”

The Hanover Stock Exchange’s Global Challenges Index (GCX) gained 8.9% in the third quarter, outperforming Germany’s DAX blue chip index (+7.6%) and the EURO STOXX 50 (+4.3%). GCX was developed by the Hanover Stock Exchange in cooperation with Oekom Research, and launched in 2007. It covers 50 international stocks of sustainable businesses that make significant or groundbreaking contributions to overcoming the largest global challenges.

And Oekom has been selected, with index firm Solactive by the Federal State of Berlin to support its long-term divestment strategy for the management of public pension funds. In summer 2016, Berlin announced a plan to divest from fossil fuel companies, nuclear and arms makers and those that do not comply with the principles of the UN Global Compact. A customised equity index will be developed by Oekom and Solactive.

Erste Asset Management, the Austrian funds firm, has excluded companies that derive more than 30% of sales from coal mining from its mutual funds saying it is one of the first asset managers to have done so. “This was the next logical step for us, having excluded coal mining from our sustainable funds at the beginning of the year,” said CEO Heinz Bednar.

The African Development Bank is setting up a fund to help the continent fight corruption. The Africa Integrity Fund (AIF), proposed by the bank’s Integrity and Anti-Corruption Department (IACD), will finance programs which contribute to the prevention, detection, investigation and sanctioning of corruption. It will equally support measures supporting the repatriation of stolen assets and alleviating the financial drain from illicit outflows. The AIF will be financed from the proceeds of financial penalties from corruption.Danish labour market scheme PensionDanmark has reportedly expressed support for an investment fund being launched by the government to raise DKK2bn (€269m) of equity and debt financing for Danish farms. IPE.com quoted CEO Torben Möger Pedersen, chief executive of the DKK189bn labour-market pension fund as saying “it looks as if a model has been found” in which his fund and others can contribute to the fund.

A fund managed by Allianz Global Investors has completed its acquisition of the 12.8MW Bohult operational Swedish wind farm from windpower firm Arise AB. “The transaction was successfully completed on the terms communicated on 19 July 2016,” Arise said.

The Pax Ellevate Global Women’s Index Fund has grown to over $100m in assets under management. The fund invests in the highest-rated companies in the world for advancing women’s leadership. “An overwhelming body of research suggests that companies with gender diverse leadership teams simply outperform their less diverse peers,” said Joe Keefe, President and CEO of Pax Ellevate, a partnership between SRI firm Pax World and Sallie Krawcheck’s Ellevate Asset Management.

The European Investment Fund (EIF) and the European Commission are launching a new Pan-European Venture Capital Fund(s)-of-Funds programme. The programme aims to further address Europe’s equity gap, the fragmentation of the VC market and to attract additional private funding from institutional investors into the EU venture capital asset class. EIF will provide a maximum of 25% of the total commitments of a fund-of-funds

Medibank, the Australian healthcare company, has put A$170m (€118.6m) of seed investment in international equities to a new tobacco-free investment fund. The fund, launched with State Street Global Advisors, excludes more than 10 companies which have significant business activities involving tobacco and controversial weapons. Medibank said its policy of excluding tobacco investments has been implemented across its entire A$2.4bn investment portfolio, as international equities were the final area to exclude tobacco. Announcement

The Indian government and three state-run firms are reportedly planning to create an up to $2bn renewable energy equity fund. Reuters was citing unnamed government sources as saying it’s hoped the Clean Energy Equity Fund (CEEF) would attract Canadian and European pension and insurance funds.