Founded in 2001, the Fonds de Réserve pour les Retraités (FRR) is a French public administrative establishment responsible for investing assets entrusted by public authorities to finance the pension system. As of December 29, 2017, FRR had €36.4 billion of assets under management.
The Reserve Fund's responsible investing approach rests on four principles: incorporating ESG factors into asset management, managing social responsibility with regard to the UN Global Compact, exercising their voting rights, and contributing to research and supporting international initiatives such as the Carbon Disclosure Project and the Extractive Industries Transparency Initiative. As a public entity, the organization abides by the Ottawa and Oslo Conventions ratified by France, and excludes controversial weapon manufacturers. Further, to successfully manage carbon risk, FRR has been calculating the carbon intensity of their equity and bond portfolios since 2013.
Ceres: Unprecedented floods, storms and wildfires have ravaged communities across the United States in the past two years and sapped the economic vitality of regions. Puerto Rico was devastated by Hurricane Maria while southeast Texas is struggling to recover from Hurricane Harvey, and communities in California are still reeling from deadly wildfires. The U.S. federal government’s most recent National Climate Assessment predicts more climate-fueled weather disasters will come - and more frequently - exacting a heavy toll on the economy.
IPE: The European Parliament and EU member states have reached a political agreement on the so-called disclosure regulation that forms part of the European Commission’s sustainable finance plan, it was announced today.
IPE: For various reasons, over the past few years, more and more mainstream institutional investors and other groups have become explicitly concerned with the environmental and social impacts of investments. This is distinct from, but does not replace, thinking about how environmental, social and corporate governance (ESG) factors can affect an investment portfolio’s financial performance.
GreenBiz: Like green bonds, these corporate loans tie capital to improvements in sustainability, but unlike their older, better-known cousin, ESG-linked loans don’t require a borrower to use the proceeds for a specific, predetermined purpose.
Top 1000 Funds: The $214 billion fund for California teachers has been a leader on D&I in the investment industry, demonstrated through gender parity in its investment team and the publishing of an annual report on diversity for the past 10 years.
Advisor's Edge: Global inflows into environmental, social and governance (ESG) ETFs are steady month over month, with US$730 million making their way into these investments in January, according to London-based research firm ETFGI.
Citywire: At the end of 2018, the Asia Pacific ex-Japan market had only 22 ESG ETFs and ETPs, data from consulting firm ETFGI showed. The assets under management for these products, however, hit $686 million by end-December, jumping 43% year-on-year.
Investor Daily: The fund developed in a partnership with VicSuper aims to provide investors with diversified access to the local fixed income market with enhanced social outcomes.
It excludes tobacco, alcohol, gambling, military weapons, civilian firearms, nuclear power, adult entertainment, genetically modified organisms (GMOs) and fossil fuel reserves.
Business Wire: Columbia Threadneedle Investments is adding to its extensive fundamental research effort by launching an innovative responsible investment (RI) ratings tool that combines an assessment of a company’s financial stewardship with a view on how well it manages its Environmental, Social and Governance (ESG) risks.
The Government Pension Fund of Norway, often referred to as the Norwegian oil fund, was founded in 1990. It is one of the largest sovereign wealth funds in the world with over US$ 980 billion of assets, as of December 2018. Norges Bank Investment Management (NBIM) is responsible for the management of the fund. The firm seeks to safeguard the long-term financial interests of future generations by investing responsibly in equities, fixed income, and real estate.
NBIM's investing approach is based on three core pillars: setting standards of principles and expectations to help improve corporate governance, exercising their ownership rights, and monitoring and managing the ESG risks of their investments. The firm sets high expectations for portfolio companies on topics related to the UN SDGs such as children's rights, climate change, water management and others. Finally, the Sovereign Wealth Fund has a publicly available company exclusion list based on recommendations from the Council on Ethics appointed by the Ministry of Finance.
Economist: Sustainable investing, once a niche area of interest, has moved into the mainstream. Earlier this month a survey showed that 75% of American asset managers say their firms offer sustainable-investing strategies, which focus on environmental, social and governance (ESG) issues. Almost 90% of fund managers think it is no longer just a fad. Young investors are driving the surge in interest: more than three-quarters of high-net-worth millennial and Generation Z investors have their assets reviewed for ESG impact.
IPE: Donald Trump is not the only US leader to ignore the climate emergency. BlackRock’s 2019 letter to companies, timed to coincide with Davos, is not quite the State of Union address but it was equally silent on the crisis.
S&P Global: Private sector companies and other non-governmental entities can face several material credit risks associated with an entity's social license to operate, Moody's Investors Service said in a Feb. 20 research note.
New York Post: Less than one in five hedge fund professionals are women, according to a report released by Preqin on Thursday. And the number drops to just 11 percent when it comes to the senior ranks, Preqin said.
WSJ: Half of the women in private equity would consider leaving the industry, according to a new survey that showed rising dissatisfaction despite buyout firms’ efforts to become more diverse.
IPE: Swedish private equity firm Summa Equity, the fund’s manager, said it had closed its second fund with investor commitments worth SEK6.5bn.
IPE: The surge in environmental, social and corporate governance (ESG) themed products and green indices is “overwhelming many Swiss Pensionskassen”, according to a leading independent adviser.
Debevoise & Plimpton: Regulation is only one of the drivers for that change, but it is an increasingly significant one, and two recent developments are characteristic of the changing regulatory landscape. They also highlight an opportunity for private equity fund managers – many of whom are already focused on ESG (“environmental, social and governance”) considerations when making and managing portfolio investments.
Citywire: JP Morgan Asset Management has hired Jennifer Wu to the newly created role of global head of sustainable investing.
Wu joins JP Morgan from BlackRock, where she was a member of its sustainable investing team.