Responsible Funds, Oct. 26: Guernsey, Aon, BlackRock, MAPFRE, Susi Partners, Overseas Private Investment Corporation

The latest responsible funds developments

Guernsey has registered an agribusiness fund that is being termed “the world’s first regulated green fund”. The Cibus Fund, launched last year, is the first to be awarded the Guernsey Green Fund regulatory “kitemark” by the Guernsey Financial Services Commission, following the launch of the Guernsey Green Fund rules in July this year. The Cibus Fund is a private equity vehicle managed by London and Hong Kong-based private credit fund manager ADM Capital Europe.

CPR Asset Management, part of Amundi, has added a new strategy to its €7bn actively managed thematic range with the launch of a new education-focused fund. CPR Invest – Education is an actively managed, non-benchmarked global equity fund that will be managed by Guillaume Uettwiller, Portfolio Manager in CPR’s Global Thematic Equities team and co-manager of CPR Invest – Megatrends fund.

The Triodos Organic Growth Fund managed by Triodos Investment Management has taken a minority stake in Ecoffee Cup, which develops reusable products for the “on-the-go market”. It’s the first UK investment by the fund; terms weren’t disclosed.

The US Agency for International Development (USAID) is to provide a $37.5m credit guarantee to Clarmondial’s Food Securities Fund, a strategy promoting climate smart agriculture and responsible, deforestation-free supply chains. Clarmondial said the fund offers investors access to growth markets and “significantly reduces risk” through the use of blended finance. USAID will make the commitment, which covers a portfolio of up to $150m, through the Bureau for Food Security (BFS) and the Development Credit Authority (DCA). Link

BlackRock has launched a range of ESG exchange traded funds (ETFs) “designed to offer low cost building blocks for investors to build broad, diversified sustainable portfolios”. The iShares Sustainable Core range includes a new ESG bond fund as well as six existing ESG ETF funds offering broad US and international equity and bond exposures. In the US, this core suite of sustainable ETFs is part of a larger platform of iShares ESG ETFs, and a new range of Sustainable Core ESG ETFs is also now available in Europe. Announcement

Swiss investment manager SUSI Partners and Polish firm Luneos have closed a financing facility for “light-as-a-service” (LaaS) projects in Poland, a framework agreement with a volume of up to €30m. SUSI made the agreement, which will see Luneos retrofitting the lighting systems of their clients with highly energy efficient LED lighting, on behalf of its SUSI Energy Efficiency Fund (SEEF). The first portfolio of projects are expected to save 45,000 tonnes of CO2.

Non-profit ETF-platform and investment manager Impact Shares has secured an additional $1m grant from The Rockefeller Foundation to use towards further engaging non-profits and retail investors in SRI. The additional funding was awarded through the foundation’s Zero Gap innovative finance portfolio. Impact Shares has launched three ETFs this year: the Impact Shares NAACP Minority Empowerment ETF, the Impact Shares YWCA Women’s Empowerment ETF, and the Impact Shares Sustainable Development Goals Global Equity ETF.

The EU and Breakthrough Energy Ventures – the fund launched by the likes of Bill Gates, George Soros and Richard Branson – are to set up a €100m clean energy investment fund. Breakthrough Energy Europe (BEE) will aim to help innovative European companies develop and bring new clean energy technologies to the market. Half of the equity will come from Breakthrough Energy and the other half from InnovFin – risk-sharing financial instruments funded through Horizon 2020, the EU’s current research and innovation programme. The fund is expected to be operational in 2019.Consulting firm Aon has launched a Responsible Investment Network in the UK to “provide a unique, accessible forum” for market players, informed by Aon’s involvement with the Cambridge Institute for Sustainability Leadership Investment Leaders Group (CISL ILG) and Accounting for Sustainability (A4S). It holds its inaugural meeting on November 27 in London.

Several UK local authority pension funds are to align their investment strategies to the Paris climate accord following activist pressure. The Brunel Pension Partnership pool and pension funds for Merseyside, Islington, Lewisham and the Environment Agency have committed to boosting low-carbon investments, slashing exposure to high-carbon assets and robust engagement with investee firms. The commitment was coordinated by ShareAction.

MSCI has launched a series of ESG-screened indices excluding firms involved in coal, oil sands extraction and controversial and nuclear weapons. The MSCI ESG Screened Indexes will also exclude companies violating the United Nations Global Compact principles – which include violations related to human rights, labour, environment, and anti-corruption. MSCI said the indices aimed to represent the performance of a free float adjusted market capitalisation weighted opportunity set with common ESG exclusions. Link

US development body the Overseas Private Investment Corporation (OPIC) has launched a venture capital initiative focused on driving investments to emerging markets. OPIC will support investments helping introduce technologies addressing challenges in the developing world, typically committing between $5m and $25m, or up to 25% of a fund’s total capitalisation. The first fund commitment under the programme is Iron Pillar, a venture growth investor specialising in technology businesses in India.

MAPFRE AM, the fund management arm of European and Latin American insurance company MAPFRE, has launched an ESG-focused mutual fund in partnership with ESG boutique La Financière Responsable (LFR). Capital Responsable (“Responsible Capital”) will invest in shares and fixed income securities of European companies with superior ESG criteria and will be managed by MAPFRE AM with consultancy services from La Financière Responsable. The fund is available to international investors. MAPFRE acquired a 25% stake in the Paris-based LFR late year, and this the first collaboration between the two companies to arise from the new relationship.

German asset manager DWS has reportedly launched the DWS Invest Green Bonds fund – a new sustainability-focused fixed income fund that invests in global debt securities. Managed by Christoph Breuer, it integrates exclusion criteria with data on firms’ ESG performance. The euro-denominated fund has an annual charge of 1.14% and an average investment horizon of three to five years.

The Asian Development Bank has launched the Inclusive Green Growth Index (IGGI), which it says is a “new and better measure of the quality of growth”. Focused on promoting development agendas such as the SDGs, the IGGI’s indicators encompass three pillars – economic growth, social equity, and environmental sustainability – and purportedly cover “a more comprehensive set of indicators than previous measures”

Circulate Capital has announced it expects to receive $90m funding from PepsiCo, Coca-Cola and other leading packaged goods companies for its strategy to combat ocean plastic. It expects these agreements to be formalised by early 2019. Circulate focuses on the prevention of mismanaged plastic waste.