Responsible Funds, Sept 21: Varma, Bloomberg, Vontobel, Fidelity, Copenhagen Infrastructure Partners

The round-up of the latest responsible funds news

Finnish pension insurer Varma has invested €200m in the sustainability-focused ETF it designed in partnership with Legal & General Investment Management (LGIM) and London-based index provider Foxberry. The ETF, which allocates to European equities, is listed on the London Stock Exchange. The Foxberry Sustainability Consensus Europe Total Return Index systemically implements exclusions recommended by a sustainability advisory committee, which includes Tomas Franzen and Gustaf Hageryd, who both helped establish AP2 and AP3’s RI frameworks. Tobacco, weapons manufacturers and selected coal and fossil fuel companies are excluded from the index, as well as firms found to violate international human rights standards.

Bloomberg has entered the equity index market, offering the Bloomberg U.S. Large Cap Index (ticker: B500) as well as growth, value and dividend indices. These benchmarks will serve as the basis for the new Bloomberg SASB ESG Index family, which also includes ESG-weighted versions of the value, growth and dividend indices. SASB is the Sustainability Accounting Standards Board, where Bloomberg founder Mike Bloomberg is Emeritus Chair.

Vontobel Asset Management has launched a new ESG fund for global equities to meet “growing demand from investors”. The Luxembourg-domiciled Vontobel Fund – Global Equity X will be run by Matthew Benkendorf and Ramiz Chelat. The fund follows the same investment approach as the 25-year-old Global Equity Strategy, which has an MSCI ESG Rating of A.

Fidelity has launched the Sustainable Family of Funds, a cross-asset range of five ESG funds. The family offers two investment categories: best-in-class funds, which select high ESG performers, and sustainable thematic funds, which are designed to “address sustainability challenges or create a positive value-add to society and the environment”. The family consists of FF – Sustainable Water & Waste Fund, FF – Sustainable Global Equity Fund, FF – Sustainable Eurozone Equity Fund, FF – Sustainable Reduced Carbon Bond Fund, and FF – Sustainable Strategic Bond Fund.

Shell has been taken off the DJSI World after the latest review of the Dow Jones Sustainability Indices (DJSI). The constituents of the DJSI series is based on the SAM (RobecoSAM’s business unit) Corporate Sustainability Assessment results alongside S&P DJI index methodology. Other deletions this year were Citigroup and 3M Co, while Alphabet, CVS Health Corp and Reckitt Benckiser Group were added.Copenhagen Infrastructure Partners, which was co-founded by PensionDanmark, has acquired a Spanish onshore wind portfolio. The €350m investment in the 374 MW portfolio Monegros in Aragon will be financed with 100% equity from its CI III fund, which counts UK and Nordic pension funds among its investors.

First State Investments has launched its third European Diversified Infrastructure Fund (EDIF III), which will pursue the same ESG-led strategy the fund’s two predecessors to invest in energy, transportation and utility assets. First State’s unlisted infrastructure team is targeting €3.5bn over three to five fundraising series with the fund.

Germany-based renewables asset manager Luxcara has acquired two Finnish wind projects for an undisclosed amount. The electricity produced by the 60MW projects will be sold to an off-taker under a power purchase agreement (PPA).

Impact investor and philanthropic organisation Open Road Alliance is looking to raise $40m for a fund designed to build bridge financing gaps for social entrepreneurs. The Open Road Impact Fund provide short-term bridge loans to social impact organisations looking to scale. Open Road’s first loan fund, Open Road Ventures, launched in 2017 with its own capital, has invested more than $19.5m across 65 deals with a 0.3% default rate.

Scientific Beta, a provider of smart beta indices, is offering an off-the-shelf low carbon option for its flagship “multi-smart-factor” indices. According to Scientific Beta, the option offers “tangible improvements” in risk reduction and a 50% reduction in weighted average carbon intensity over the last ten years. The option includes a positive filter targeting companies with high carbon intensity, and excludes companies that fall severely short of global standards of responsible business conduct and global ESG norms.

Heartwood Investment Management – the UK asset management arm of Handelsbanken – has launched four sustainable multi-asset funds across the risk spectrum. The funds – Defensive Sustainable, Cautious Sustainable, Balanced Sustainable, and Growth Sustainable – will be actively managed according to the same investment process as Heartwood’s core total return funds.

Beyond Investing’s “first-of-a-kind” vegan ETF reached $4m on its first day of trading on the New York Stock Exchange last week. The fund’s index screens out companies which indirectly or directly harm animals from the Solactive US Large Cap Index, cutting out about 40% of the market capitalisation of the benchmark.