Responsible Funds, October 30: S&P and Toronto exchange launch new climate indices

The round-up of the latest responsible funds news

S&P Dow Jones Indices and the Toronto Stock Exchange have unveiled three new climate change index series for Canada, recognizing firms in the S&P/TSX60 for how they manage their environmental impact. The suite comprises the S&P/TSX 60 Carbon Efficient Index, the S&P/TSX 60 Carbon Efficient Select Index and the S&P/TSX 60 Fossil Fuel Free Index. The first two use carbon footprinting calculated by UK-based Trucost while the fossil free index is based on research from RobecoSAM. “As awareness of the effect of carbon emissions continues to grow, we believe investors will value these index offerings,” said Eric Sinclair, TMX Group’s Head of Information Services.

Asset management giant BlackRock is considering converting the BlackRock Developed World ex Tobacco and Controversial Weapons Index Fund to also exclude fossil fuels, says David Graham, managing director of BlackRock’s Family Offices. It is also looking at the possibility of additional funds that could exclude fossil fuels.

Generali Investments, the asset management arm of Generali Group, has launched the GIS SRI Ageing Population fund, according to Citywire. It would be managed by Mattia Scabeni. “This fund is unique as it combines a long-term demographic trend and investment theme, a fundamental equity valuation process and fully SRI-compliant portfolio,” the report quoted the company as saying. Companies will be selected after an initial environmental, social and governance (ESG) screening of the MSCI Europe index.

US-based sustainable investment firm Etho Capital has launched a new index that is divested from fossil fuels and stresses climate efficiency in other industries. The product is called the ‘Etho Climate Leadership Index (ECLI)’ and it also, for ethical reasons, excludes tobacco, weapons and gambling. Constituents for the index are then picked on the basis of their carbon efficiency, with Etho relying on scores provided by Trucost. Etho Capital also plans to launch an exchange-traded fund that tracks the index later this year. Link

The Greater Manchester, Clwyd and South Yorkshire UK local authority funds have reportedly committed to a £60m (€84m) small and medium-sized enterprise (SME) development fund from Foresight Group. The new offering will make private equity investments of up to £5m in businesses based in northern England, IPE reported. Kieran Quinn, chairman at the GMPF, was quoted as saying it was an “excellent example” of local government pension funds working together to generate not only commercial returns but a positive impact.

The new European Fund for Strategic Investments (EFSI) has made its first UK investment with a £225m backing for the Galloper Wind Farm project off the coast of eastern England. EFSI was established earlier this year by the European Investment Bank and the European Commission. The EIB is supporting the Galloper project alongside a consortium of 12 commercial banks.Infrastructure investment specialist Quercus Assets Selection has launched two new renewable energy funds. The two new funds target Italian solar wind and energy markets. The company aims to raise €500m for investment in European renewable energy infrastructure projects through the new funds and an existing renewable energy fund.

Bamboo Finance, a Geneva-based private equity company, has teamed up with French conglomerate Louis Dreyfus to jointly launch and manage an impact fund for the agricultural sector of sub-Saharan Africa. Called NISABA, the fund has $50m (€45.2m) worth of seed capital, $10m of which comes from Louis Dreyfus, a specialist in commodities trading. According to the fund’s partners, NISABA will target small and midsize enterprises that, among other things, “improve efficiency through access to data, finance and risk mitigation, as well as promote training and technology innovation.”

Japanese institutions will join Oman’s biggest sovereign wealth fund to set up a joint US$400m fund to invest in food and agribusiness. Reuters reports that the sultanate is trying to diversify its economy beyond oil, using state funds in international ventures that steer investment and technology back to Oman.

Dutch asset manager Kempen Capital Management has made its Luxembourg-domiciled Sustainable European Small-cap Fund available for UK institutional investors as it looks to develop its business in the country. Kempen, which has more than €36bn under management, said it is included in Castlefield’s offering which is available through the Novia and Persching platforms.

The Global Impact Investing Network (GIIN) says its online directory of funds now includes information on 371 impact funds operating across geographies, sectors, asset classes, and impact themes. It says subscribers have deployed more than $55m to funds listed on the ImpactBase platform.

JPMorgan Chase has teamed up with VEDC, the US non-profit small business lender, on a new loan fund for African American-owned small businesses in New York City, Chicago and Los Angeles. The National African American Small Business Loan Fund has had a $3m contribution from the JPMorgan Chase Foundation to help VEDC reach its goal of creating a $30m fund. Announcement

The Green Climate Fund, a financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC), is aiming to allocate money to a first set of projects in November, ahead of the major UN climate conference in Paris. The fund is hoping to approve eight proposals, selected from 37 submitted since July, for action in some of the most vulnerable developing countries, requiring a total of $168 million in funding. Link