Spanish banking group Bankia, advised by ESG firm Novaster, has launched the first SRI thematic fund in Spain that invest in listed companies which contribute significantly toward the achievement of the UN’s Sustainable Development Goals.
It comes as Dutch pension investors APG and PGGM recently teamed up to develop a methodology to identify investment opportunities linked to the SDGs.
The Bankia Futuro Sostenible fund will invest a minimum of 75% in listed equity and a maximum of 25% in fixed income from a universe of companies, selected by Novaster, which is offering solutions to deliver on specific SDGs.
RI understands initial contacts between Bankia – Spain’s fourth largest bank – and Novaster were prompted by the services the latter is rendering to Bilbao-based ANESVAD Foundation, which has already put in place ESG strategies to finance its international health and social development projects.
Bankia’s SRI fund targets the following SDGs: No poverty (SDG 1); Zero hunger (SDG 2); Good health and well-being (SDG 3); Clean water and sanitation (SDG 6); Life on land (SDG 15); combined with an overarching criterion that companies in the portfolio should respect human rights and labour rights.
Novaster Senior Consultant Jon Aldecoa told RI that this fund represents a step forward within the traditional SRI space in Spain, where often just exclusions or best-in-class have been the ESG strategies of choice.Novaster, one of the few PRI-signatories in Spain, will also conduct the annual ESG reporting of the fund, analysing how much resources have been allocated to each SDG.
In a statement, Bankia said retail investors will also be able to invest in the fund with a minimum allocation of €100 and management fees of 1.75%; as opposed to €100,000 and a fee of 1.25% for institutional investors.
Meanwhile, in France La Financière de l’Echiquier (LFDE), an independent fund manager with €8bn under management, said it will transform its existing French State-labelled SRI fund (Echiquier ISR) into an SDG-led SICAV.
The SICAV will be managed by a team led by Sonia Fasolo and its universe will be formed by companies in European stock exchanges that show ESG best practices.
The selection criteria are based on three steps, according to LFDE: “exclusion” (of companies non-SDGs compliant); “conviction” (companies will be assessed according to LFDE’s ESG methodology); and “solutions” (at least 10% of the revenue of companies should come from services that promote SDGs).
Didier Le Menestrel, LFDE’s CEO, said: “SGDs set a framework for institutions, business and individuals. They are a new way of looking at companies for stock-pickers like us, and offer us new opportunities to engage with the companies in which we invest.”