Responsible Funds, Nov. 2: KLP, Rabobank, Insight, Forest Resilience Bond, vegan ETF, Korea social bond

Norwegian pension company KLP says its banking arm KLP Banken launched a green mortgage in September, which offers lower rates to members who choose to upgrade or purchase climate-friendly housing. Mutually owned KLP said that in the third quarter, three new renewable energy plants were completed: a wind farm in Kenya, a solar energy facility in Honduras and a biomass plant in the UK. “In recent years, KLP and its partners have contributed to eight new renewable energy plants that will produce electricity for 6.3 million people.”

In Singapore, UN Environment and Dutch financial services company Rabobank have launched the Agri3 Fund, a vehicle aiming to unlock at least $1bn in finance towards deforestation-free, sustainable agriculture and land use. Launched in collaboration with the Dutch Development Bank (FMO), Althelia/Mirova and the Sustainable Trade Initiative (IDH), the public/private fund aims to de-risk private capital by sharing the costs and risks to transition to deforestation-free agricultural commodity production that includes smallholder farmers as much as possible in the global agricultural value chain.

Circulate Capital has announced that it expects to receive $90m in funding for its investment strategy to combat ocean plastic from some of the world’s largest consumer goods company, including PepsiCo, Procter & Gamble, and Unilever. The New York based firm, which has teamed up with the non-profit the Ocean Conservancy, expects formal agreements to be in place by early 2019.

Beyond Advisors, the research arm of US impact investing platform Beyond Investing, is planning to launch a vegan friendly exchange traded fund (ETF) early next year, following the approval of the US Securities and Exchange Commission. The US Vegan Climate ET, which will track the US Vegan Climate Index, is slated for a January launch on the New York Stock Exchange, its ticker will be VEGN.

A €30m (£26m) ESG emerging markets mandate has been put to tender by The Danish National Research Foundation, the independent research institution founded by the Danish government in 1991. The consideration of ESG is a “minimum” requirement for the mandate, which is worth around €1m and lasts a minimum of three years, with an option to extend for one year, twice.

Korea Housing Finance Corporation, the government-owned entity with a policy role to facilitate supply of housing finance, priced its inaugural 5-year FXD EUR 500 million Social Covered Bonds on October 24, marking their successful debut in the EUR market. The transaction is the first Social Covered Bond out of Asia and the first EUR Covered Bond out of Korea. The joint bookrunners for this transaction are BNP PARIBAS, DBS, ING, and SG CIB.Insight Investments, the £601bn (€683bn) UK asset manager that is part of BNY Mellon, has released a document on how it looks at sovereign debt through an ESG lens. It has built a proprietary model to help it better understand the ESG risks at the country level across its portfolios. The model generates two complementary scores to give our portfolio managers greater insight over long-term trends. First, the model’s overall ESG score offers a snapshot of a country’s current standing with regard to ESG factors, based on the latest available data. There is also an ESG momentum score, which illustrates a country’s improvement or deterioration with regard to ESG factors over a six-year period.
The document is called Sovereigns and Sustainability.

The Forest Resilience Bond (FRB), designed to raise capital to reduce wildfire risk across the western US, has secured funding from investors including The Rockefeller Foundation, the Gordon & Betty Moore Foundation, Calvert Impact Capital, and CSAA Insurance Group. Developed by Blue Forest Conservation (BFC) in partnership with World Resources Institute (WRI), the bond raises capital to fund the upfront costs of forest restoration, while multiple beneficiaries share in the cost of reimbursing investors over time. The investment will kick off a $4.6m forest restoration project protecting 15,000 acres of forestland in the North Yuba River watershed.

Canada’s BMO Financial Group is renaming many of its F&C branded funds to bring all its fund names together under the BMO brand. The changes will take effect around November 12. Details of all the fund changes are can be viewed in this spreadsheet.

Social enterprise lending organisation Reinvestment Fund has invested $3m in Sunwealth, the renewables energy firm focusing on smaller-scale solar projects. The financing, together with $3m tax-equity investment from private investors, will support the installation of over 2.5 megawatts of solar capacity on rooftops in communities underserved by traditional renewable energy financing.

Private equity firm Swen Capital Partners has closed fundraising for its third infrastructure fund, SWEN Infra Multi-Select 3, after securing €455m from European institutional investors. The fund will invest mainly in transport, energy, communication and social infrastructure in Europe, which Swen says will be “a diversified portfolio generating steady returns at an optimised level of risk”. The fund has already made its first investments and is expected to make its first distribution by yearend.