Amundi Asset Management: Impact investing is about long-term support

Amundi Asset Management says that impact investing is about long-term support for social businesses. According to the company the goal is to generate quantifiable social impact for clients, over and above the search for financial returns. Amundi Asset Management has over 900 million euros in SRI assets under management.

– We select amongs the many social businesses that we meet with, those most likely to generate the greatest social impact over the long term, while offering prospects for sustainable economic development. By investing in these non-listed social businesses over the long term, we encourage the emergence of a whole new sector of the economy, meeting crucial social needs while offering all types of investors a real investment solution, the company says.

Finance

European Investment Bank to increase its Climate Awareness Bond to 3 billion euros

The European Investment Bank (EIB), the EU Bank , has increased the  Climate Awareness Bond by  400 million euros last week.  The tap reinforces the benchmark character of the issue, which, now at  3 billion euros, continues to be the largest Green Bond outstanding in any currency. The increase carries a coupon of 1.375% and was priced in line with the existing EIB Coop curve at MS-30. It constitutes EIB’s first issue ever priced at negative rates.

The transaction came on the same day as EIB’s Annual Press Conference in Brussels, where President Hoyer announced the key results achieved in 2014. Last year, the EIB dedicated over  19 billion euros, or 25% of its total lending activity, to climate action. Joint Bookrunners for the transaction were Crédit Agricole CIB, Credit Suisse, Nomura and Standard Chartered.  EIB is rated Aaa/AAA/AAA by Moody’s , Standard and Poor’s  and Fitch.

Eila Kreivi, Director, Head of Capital Markets, EIB, said: “Today’s issue underlines the strong lending activity of the EIB in favour of climate action, and reinforces our support for the sustainable development of the Green Bond market. At a size of 3 billion euros, CAB 2019 has attained benchmark status in its own right, highlighting the popularity of this bond.”

Massimo Antonelli, Director SSA DCM, Credit Suisse, said: “With today’s EUR 400m increase of the CAB Nov-19, the European Investment Bank was able to reinforce its commitment to lending activities in support of climate action, in line with its policy. The EUR 3bn CAB Nov-19 is now the largest outstanding Green Bond in any currency and with this transaction the European Investment Bank was able to achieve for the first time a negative re-offer yield.”

Timo Zwez, Head of Sovereigns, Supranationals and Agencies Europe, Standard Chartered, said: “With another record year in green bond issuance behind us EIB continues to lead this segment in 2015 once more with this EUR 400m tap. Not only is this bond offering EIB a fantastic funding opportunity with pricing at a negative yield but also they manage to increase the issue size to a liquid size of EUR 3bn. For SCB this is another great Green Bond Issuance highlighting our commitment to Climate Awareness Bonds (CAB) of EIB as well as the Green Bond Principles and the Climate Bonds Initiative.”

 

Finance

The Swedish Pension Fund AP4 to focus on climate change

The leading Swedish Pension Fund AP4 is focusing on governance and climate change issues. In PUB+ interview the managing director Mats Andersson, also the Ambassador of UN Decarbonazation Coalition, says that they have done the portfolio decarbonazation over three years ago and  their target is that by 2015 they have all the equity assets as low carbon assets. Mr Andersson was speaking in EarthRate ESG discussion in Stockholm.

-This year we will analyse the Asian markets  and Japan. We have done the earlier
research related to US and European markets. This work has helped us to
minimize the carbon output by 50 per cent, he says.

– In Sweden our focus is on Governance and Climate Change. Abroad we will
focus on working together with other AP funds and other engagement
funds, especially in Japan, he says.

Andersson says that good governance is about diversity, owner-driven strategies and transparent policy.

The fund assets were 295 billion Swedish kronor and  the fund is also awarded by the IPE as the Best Public Penson Fund in 2014.  According to the company during the last 10 years the total return has been 7,6 per cent in average. Last year the total return was 15,7 per cent after the  costs and the fund made their record profit of 40 billion Swedish kronor.

Finance

NBIM: Global standards important in our investment process – 49 divestments in 2014

The largest oil fund in the world, the Norges Bank Investment Management (NBIM) has published its guidelines and information regarding last year.  According to the CEO of the fund, Mr. Yngve Slyngstad, the fund made 49 divestments last year. One of the biggest reasons for divestments were the environmental risks in the portfolio company.

– Our fund has a long-term perspective in responsible investing and we are a large, international investor. For us, the global standards are important in our valuation process. For example the UN Global Compact and OECD principles for international companies are examples for us that the company is having responsible business processes and management. We have invested in over 8000 companies in 82 different countries so they are important guidelines for us. During last year we have also developed our prosesses regarding the environmental issues, Mr. Slyngstad said.

– Last year we have increased our investments in renewable energies, energy efficiency and efficiency in the natural resources. And this is part of our investment strategy that we pay more attention to climate change issues, water mangement and children rights. The other elements in our investment strategy are: equal treatment of shareholders, shareholder influence and board accountability, legitimate and well-functioning markets and risk management.

The oil fund market value is 6534 billion Norwegian kronor and 60 % are in equities, 35 % in fixed income and 5 % in real estate.  45 % of the fund is invested in Europe, 35 % in North America, 16,5 % in Asia and 3,5 %  rest of the world. According to the governace of the fund, the fund can have max 10 per cent of the voting shares in a company. The return of the fund has been 5,7 per cent from the establishment in 1998 to the end of 2013.

Finance

Apple to issue long-term bonds totally 6,5 billion dollars

Apple has issued new long-term bonds worth 6,5 billion dollars. According to the company the new series of different maturity bonds have been made to take advantage of a drop in borrowing costs to fund its aggressive share buyback programme. The company has boughts its own shares worth 45 billion dollars back during the past 12 months.

The long-term bechmark bonds have been in all time low during the recent weeks. For example the US-30 year Treasury has been 2,22 per cent, UK benchmark at 2,02 per cent and German Bunds at 0,97 per cent.

 

Finance Tech

Ritakallio: Ilmarinen has integrated ESG issues into decision making process

CEO Timo Ritakallio from Ilmarinen says that the pension fund has integrated ESG issues into its investment processes. He says that Ilmarinen also engage with companies and try to achieve improvments through active dialogue. He was speaking in EarthRate´s ESG Conference in Helsinki last week.

– In addition to the norms based assessment we assess company specific ESG risks that can be strategic, operational, financial or compliance related. For us it is also important to see how companies are turning ESG impacts into business opportunities.

– Ilmarinen also compares companies within industries and markets in terms of ESG risks and prepardeness. This enables us to identify industry leaders and laggards. ESG analysis also targets, how company can cope  big megatrends like climate change, natural resources scarcity, water issue or urbanization, he says.

Ilmarinen is a pension insurance company and its portfolios market value is over 34 billion euros, of which Finnish equities are about 3 billion euros. The biggest holdings are  for example in Nokia, Sampo, Kone, UPM Kymmene and Metso. And in the small cap companies there are Suominen, Technopolis, Basware, Talentum and Tikkurila.

 

Finance

Video Fiona Reynolds: PRI´s Montreal pledge targets 3 trillion dollars by Paris 2015

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Responsible Investment organization ´s (PRI)  managing director Fiona Reynolds says that the low carbon Montreal pledge initiative for investors is targeting 3 trillion dollars by Paris 2015 talks. ComteamPUB+ met her in Helsinki while she was one of the keynote speakers in EarthRate´s ESG conference in January 22nd 2015.

– There is lot of discussions about low carbon and climate change issues among investors. Especially the Paris 2015 negotiations, where we hope to see a global agreement around climate change issues. So the first thing for investor is to understand your fund and its exposure to carbon assets. Then it is easy to make possible judgements in the portfolio. Montreal carbon pledge targets 3 trillion dollars before the Paris 2015 talks and we have now 15 investors that have signed the initiative, says managing director Fiona Reynolds in Helsinki.

Mrs Reynolds also says that this decision may not be easy one and investors normally start with the equities in their portfolios.

– Although there are some investors that have taken the initiative to all their asset classes. This is also a possibility for investors to engage with companies and have a dialoque about how to transit from high carbon to low carbon economy, she reminds.

Montreal carbon pledge was launched in Montreal, Canada September 2014. This is the first step for investors to measure and disclose the carbon footprint of their equities portfolios on an annual basis. At the moment for example these signatories have signed the initiative: AP funds, Nordea, Calvert and Calpers.

Interview: Päivi Härkönen

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Finance