Fund Solutions

This Week’s Fund News: HSBC AM Launches First ESG Money Market Fund

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including HSBC AM, GIB AM, BNPP AM, SUSI Partners, ECBF, LGIM and NTR.

HSBC Asset Management has launched a new ESG money market fund, the HSBC Sterling ESG Liquidity Fund, receiving seed investment from British supermarket chain Tesco. Investing in issuers that are demonstrably and successfully addressing ESG risks, the fund will apply a robust ESG scoring system and relative ESG filters, enabling institutional investors to focus their investments on solutions that contribute to their own sustainability objectives. “We are committed to delivering market-leading solutions to meet the responsible investment ambitions of our clients,” said Jonathan Curry, Global Liquidity and Americas CIO for HSBC AM. The asset manager will also engage with issuers on their approaches to managing identified ESG risks, in order to ensure there is an increased likelihood of achieving sustainable outcomes. This will also ensure that companies are aware that their ESG performance is factored into decisions on whether their short-term debt issuance is considered eligible by the fund. The HSBC Sterling ESG Liquidity Fund will evolve to include other features in order to contribute to investors’ other sustainability objectives. “The launch of our first ESG MMF is another innovative example of how we are providing our clients with opportunities that enable the transition to a more sustainable world,” said Paul Griffiths, Global Head Institutional Business, HSBC AM.

UK-based sustainable asset manager GIB Asset Management has partnered with Amundi Ireland to launch the GIB AM Sustainable World Fund. The fund will be part of the Amundi UCITS Fund Partners ICAV, an Irish domiciled UCITS collective investment scheme. Benchmarked against the MSCI World Index, the fund will invest in global equities that will generate strong financial returns while having a positive impact on sustainable development. It will initially be available for institutional investors in Ireland and will be classified as an Article 9 fund under the EU’s Sustainable Finance Disclosure Regulation (SFDR). “Our robust investment process integrates value-creating sustainability at its heart. We employ a six-stage approach to find the businesses whose products are solving the greatest challenges of our time, whose operations are sustainable and who can use this to outperform their peers. We believe in creating a financial return for our clients through companies creating a better world to enjoy them in,” said Neil Brown, Head of Equities at GIB AM.

BNP Paribas Asset Management (BNPP AM) has launched the BNP Paribas Easy Low Carbon 100 Eurozone PAB UCITS ETF. It has been listed on Euronext Paris and Deutsche Börse Xetra since 12 October. The fund aims to meet European standards for Paris Aligned Benchmark (PAB) indices, offering investors solutions to reducing the carbon footprint of their portfolios. In line with the index, the fund excludes fossil fuels, aims to half its carbon intensity by decarbonising by at least 7% a year. Companies in transition make up 5% of the index and are assessed on the quality of their decarbonisation performance the positive climate impacts of their business. The firm also recently launched the BNP Paribas Easy Low Carbon 300 World PAB UCITS ETF, which tracks the global equity universe. “We are convinced that to be sustainable, the economy must move towards a low carbon model favouring the energy transition,” said Isabelle Bourcier, Head of Quantitative and Index Management at BNPP AM.

SUSI Partners has concluded the investment phase for its institutional Energy Storage Fund (SESF), first launched in 2017. The firm will continue to invest in energy storage on behalf of its energy transition funds. SESF offers a diversified portfolio of utility-scale battery storage assets and behind-the-meter storage solutions across Canada, the UK, Australia and California. The former will enable investors to capitalise on increasing volatility and mismatches in power supply and demand, whereas the latter supports commercial, industrial and residential customers in reducing energy costs and carbon footprints. The fund has previously successfully acquired a 50MW project from ABO Wind, a German renewables developer providing grid stability services to the single Irish electricity market.

The European Circular Bioeconomy Fund (ECBF) has raised €200 million of its €250 million of its fundraising target to invest in the transition away from fossil fuels to a bio-based economy. Investments have been secured from the European Investment bank, NRW Bank, Volkswohl Bund, Corbion and more. First launched in 2020, the capital raised by the sustainability fund will be invested in 25 disruptive European companies. All companies must fulfil its ambitious ESG criteria, with the ECBF serving as an important financial instrument in the EU supporting the European Green Deal and sustainable finance agenda. “We need to stop exploiting our planet systematically by establishing a circular bioeconomy. To that end, we need innovations, which in turn need capital in order to succeed on a global level. Companies have to reinvent their existing processes and value chains to remain competitive,” says Michael Brandkamp, Managing Partner at ECBF.

Legal and General Investment Management (LGIM) has partnered with NTR, a renewable energy specialist, to tackle the climate emergency. Institutional investors spanning the UK, Europe and Asia will have access to the €1 trillion European energy transition in 2022 by combining LGIM’s experience in real assets and NTR’s expertise in renewables. “This is a wonderful opportunity for us to work with NTR to help investors address their climate-related concerns as the world moves towards net zero,” said Sarah Aitken, Head of Distribution at LGIM. The asset manager has previously invested in NTR’s European clean energy funds and assessing over 16,000 companies under its ESG scoring methodology. NTR has acquired and managed renewable energy investments on behalf of third-party institutional investors through its funds since 2015. “This is a very significant and exciting step for NTR. By joining forces with LGIM that has such a strong and trusted global reputation, we can accelerate our joint ambition to deploy the capital needed to address the European energy transition targets, which are a centrepiece of European policy to reduce carbon emissions in 2030 by 55%,” said Rosheen McGuckian, NTR CEO.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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