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Responsible Funds, Sept. 27: UK’s Guardian newspaper group seeds Northern Trust green transition strategy

The latest responsible funds news

Northern Trust Asset Management says the Guardian Media Group, publisher of the UK’s left-leaning Guardian newspaper, has seeded a new green transition index strategy. The Northern Trust World Green Transition Index Strategy, it says, is “fossil fuel free and removes the top 10% of carbon emitters in addition to screening out companies with business involvements such as tobacco, thermal coal miners, coal fired generators and weaponry”. Northern Trust also unveiled a Small Cap ESG Low-Carbon Index Strategy and a cross-asset class thermal coal screen.

The Karner Blue Animal Impact Fund is a new US equity mutual fund from Karner Blue Capital, the Bethesda, Maryland-based firm founded by former Calvert executive Vicki Benjamin. See Karner launch coverage here.

Robeco has launched an ESG index for equities in emerging markets. Against its benchmark, the MSCI Emerging Markets Index, the Robeco QI Emerging Markets Sustainable Enhanced Index Equities aims for a 20% higher score on ESG criteria and to reduce the environmental footprint for greenhouse gas emissions, water use, waste generation and energy consumption by 20%.

Morgan Stanley Investment Management has launched its Global Sustain Fund in the UK market 18 months after the launch of the Luxembourg vehicle. The Luxembourg strategy is now at $700m and has delivered an annual return of 16% compared to the MSCI World Index of 3.92%. MSIM said the fund, which is managed by the International Equity team, offers a “concentrated portfolio of high quality companies that is carbon light, tobacco-free, alcohol-free, and free of fossil fuels”.

The International Monetary Fund has joined the Network for Greening the Financial System (NGFS), the central bank forum on climate change, as an observer. It means the NGFS now has 46 members and nine observers.

The UN’s $68bn staff pension fund has announced it will divest its “investments in publicly traded companies in the coal energy sector” by 2020. Ian Richards, a staff representative of the United Nations Joint Staff Pension Fund, told RI that the move “goes some way towards what we have been asking [for]”. “But it isn’t just coal that causes harm, so we look forward to action on other elements of the portfolio as well”, he added.

The US State of New Jersey’s tender for a provider of environmental, social and governance ratings, research and “related services” for its $79bn of pension assets has had its deadline extended to October 4.

Arabesque has launched the Sustainable Global Equity Fund, a 150-stock strategy combining sustainability analysis with fundamental and quantitative stock selection technologies. The fund’s universe consists of around 3,500 liquid stocks that have passed screening through Arabesque S-Ray, the firm’s corporate sustainability monitoring tool.

Allianz Global Investors has launched its first private market debt and equity fund for generating measurable environmental and social impact. The Allianz Impact Investment Fund (AIIF) will invest across sectors such as energy efficiency, sustainable land use and agriculture, measuring impact “using a stringent methodology which has been developed in line with industry best practice”.Credit Suisse Asset Management says it is integrating ESG into its investment process. In the first phase, more than 30 actively managed investment funds with more than CHF20bn (€18.4bn) of assets will be “repositioned” to fulfil the ESG criteria defined by the Credit Suisse Sustainable Investing Framework by the end of October 2019. CSAM’s goal is to expand its suite of ESG offerings to around CHF100bn in assets by the end of 2020.

UBS, Federated Investors and Hermes Investment Management, which is now part of Federated, have launched two new SDG Engagement High Yield Credit funds. The Hermes SDG Engagement High Yield Credit Fund, a UCITS fund, will be available to global investors from October 2, while the Federated Hermes SDG Engagement High Yield Credit Fund is immediately available to US investors. The funds will both be managed by Hermes’ Mitch Reznick and Fraser Lundie.

Hermes Infrastructure is to invest in a 813MW portfolio of Swedish onshore wind farms The investment will be made through its Hermes Infrastructure Fund II, and in conjunction with consortium partner CGN Europe Energy (CGNEE), a subsidiary of China General Nuclear Power Corporation.

The Bank for International Settlements (BIS), the financial services provider for central banks, has launched an open-ended green bond fund. The US dollar-denominated fund will pool BIS client assets to make “sizeable climate-friendly investments and support the adoption of best market practices to deepen the green bond market”. It is managed in-house by BIS Asset Management and eligible bonds have a minimum rating of A-. Responsible Investor first reported on the fund in July. A euro-denominated structure is expected in the future.

French public service additional pension scheme ERAFP has signed the Tobacco-Free Finance Pledge and completed its divestment from the tobacco industry.

The Luxembourg Finance Labelling Agency has given 24 ESG funds the LuxFLAG label, including strategies from Actiam, Candriam, ING and Nordea. The new additions brought the total number of LuxFLAG labelled investment vehicles to 158, a number which has grown by 53.4% since the beginning of the year. Link.

The Global Innovation Lab for Climate Finance, a government-funded and investor-led initiative, has launched six investment vehicles focused on climate mitigation and adaptation. The vehicles target four focus areas: blue carbon in marine and coastal ecosystems, sustainable agriculture for smallholder farmers in Africa, sustainable energy access, and sustainable cities. The Lab will open a new call for ideas for next year’s annual cycle of innovative investment vehicle launches on October 14.

Eleven New York State senators have written to State Comptroller, Thomas DiNapoli calling on him to divests the New York State’s $210bn public pension pot from fossil fuels as part of the five-yearly asset allocation review the fund is currently engaged in. The senators, led by State Senator Liz Krueger, Chair of the Senate Finance Committee, all co-sponsored the Fossil Fuel Divestment Act (S.2126), which is currently with New York Senate’s Civil Service and Pensions Committee.