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Responsible Funds, Nov. 6: Green Climate Fund, KfW, EarthFolio, Fiducian, Brookfield Renewable Energy Partners

The latest responsible funds news

The United Nations’ Green Climate Fund, which has $10.2bn in pledges to help poor countries tackle climate change, has approved its first eight projects for $168m. It’s hoped the fund will be a key channel to mobilize over $100bn a year in aid for developing nations by 2020 from public and private sources. The move marks the end of its launch phase and kick-starts its flow of climate finance.

Among the projects approved by the GCF is the first project proposed by Germany’s development bank KfW, a climate change adaptation project in Bangladesh (Climate Resilient Infrastructure Mainstreaming, CRIM). The project will see the building of 45 new cyclone protection shelters along the country’s coast in three of its poorest districts, while 20 other shelters are to be “climate-proofed” and 80 km of storm-proof access roads constructed. “The launch of this project marks an important milestone, as it is a credible step towards increasing the industrialised countries’ contribution to climate financing,” said KfW Executive Board Member Dr Norbert Kloppenburg.

EarthFolio is claimed to be the world’s first automated investing service dedicated to sustainable investing. The first ‘robo-advisor’ for sustainable investors has been developed and the company behind it says: “Investing sustainably has never been easier or more meaningful.” Portfolios are designed and managed by Blue Marble Investments, an advisory firm founded by former Bank of America Vice President Art Tabuenca in 2000. Matthew Alsted of Calvert Investments and Tracey Rembert are both members of the advisory team. Link

Brookfield Renewable Energy Partners, one of the world’s largest listed pure-play renewable power platforms, says it plans to deploy $500m-$600m annually into new investments over the next five years. This could lead it “into new markets in which we can broaden our geographic footprint and build a larger and more scalable business over time”. In a letter to shareholders, CEO Sachin Shah said: “We remain confident in our ability to deliver 12-15% total returns to shareholders over the long-term including cash distribution increases in the range of 5-9% annually.” Link*Fiducian Group, an Australian fund company* that has about A$1.3bn (€850m) under management, has launched a fund-of-fund called “Diversified Social Aspirations” (DSA). According to Fiducian, DSA invests in underlying funds and mandates that are either members of or certified by the Responsible Investment Association Australasia (RIAA). Said Conrad Burge, DSA’s Manager: “Selected managers are expected to deliver a solid financial performance. At the same time, their stock selection process must consider environmental, social, governance or ethical activities of the companies they choose for their portfolios.”

UK impact investment specialist Resonance has launched a fund for the local market which targets social enterprises benefiting from tax relief, reports FT Adviser. The product is Resonance’s Bristol Social Investment Tax Relief (SITR) fund and it starts with £5m (€7m) in seed capital. According to FT Adviser, SITR uses the UK government’s recent tax relief measures to back investment in charities, community interest companies and community benefit societies. The fund aims to deliver an internal rate of return of around 8%, but FT Adviser said this depended on the investor’s tax circumstances.

Two pension funds for the German city of Münster have been directed to adopt a sustainable investment strategy that includes fossil fuel divestment from 2016. The requirement follows a recent meeting of the city’s parliament where the centre-left majority voted in favour of the corresponding directive. As a result, the schemes, which have €62m in assets, are to adopt a host of exclusion criteria. They include: fracking, child labour, weapons, nuclear energy, genetic manipulation, animal testing and corruption. The schemes must also avoid companies that supply energy from “climate-damaging” sources. According to a statement released by Fossil Free Germany, the latter includes such companies as RWE, Total, Shell and BASF. These firms were not, however, named in the directive.