Weekly ESG News: Financial Services and Insurance Industry (48/2024)
News in the spotlight: LeapFrog Investments Secures $1.15 Billion for Impact-Driven Fundraising Cycle
LeapFrog Investments has successfully raised $1.15 billion in its fourth fundraising cycle, surpassing its initial target. The funds will support high-impact healthcare and financial services across global growth markets, driving sustainable development while benefiting emerging consumers.
Products and Services
responsAbility and Phlomis Finance Bridge Blockchain and Impact Investing
Swiss impact asset manager responsAbility has partnered with Stockholm-based Phlomis Finance to integrate blockchain technology into impact investing. This collaboration aims to democratize access to Financial Inclusion investments, empowering micro-entrepreneurs in emerging markets and advancing United Nations Sustainable Development Goals. Phlomis Finance utilizes the Chromia blockchain to provide transparency and efficiency in managing real-world asset investments, catering to both institutional and digital asset investors. responsAbility, with over 20 years of expertise in impact investing, has deployed USD 15.7 billion in investments across financial inclusion, climate finance, and sustainable food. The partnership will combine responsAbility’s proven impact assessment strategies with Phlomis’ innovative blockchain platform, creating scalable and resilient investment opportunities (source: responsability.com).
SIFEM invests USD 15 million in Ninety One’s Africa Credit Opportunities Fund 3
SIFEM, Switzerland’s Development Finance Institution, has committed USD 15 million to Ninety One’s Africa Credit Opportunities Fund 3 (ACO3) as part of its first close, which aims to raise USD 500 million. Managed by responsAbility Investments AG, SIFEM’s investment will provide private credit to high-growth companies in Africa, promoting sustainable development, economic resilience, and job creation. Strategic partners in ACO3’s first close include the International Finance Corporation (IFC), British International Investment (BII), and Standard Bank of South Africa. SIFEM, established in 2011 and fully owned by the Swiss Confederation, focuses on fostering inclusive, resilient economies while addressing climate challenges in developing and emerging markets. This collaboration further highlights SIFEM and responsAbility’s shared commitment to impactful and sustainable growth (source: responsability.com).
LeapFrog Investments raises $1.15bn in fundraising cycle
LeapFrog Investments has successfully closed its fourth fund, raising $1.02 billion in primary commitments and co-investments, surpassing its $1 billion target. Including an additional partnership with Prudential Financial, the firm secured over $1.15 billion during this fundraising cycle to support high-impact healthcare and financial services in global growth markets. Key investors include Temasek, AIA, Prudential Financial, the European Investment Bank, and U.S. International Development Finance Corporation, alongside major asset managers and foundations. Fund IV has already supported 24 million emerging consumers through investments in companies like Redcliffe Labs, Sun King, and bolttech, all achieving strong growth. LeapFrog CEO Andy Kuper emphasized the fund’s success in a challenging fundraising environment, highlighting its ability to attract diverse, global investors to its Profit with Purpose strategy. Chairman Dominic Barton commended the firm’s limited partners for their confidence in LeapFrog’s ability to deliver strong returns while driving social and economic impact (source: leapfroginvest.com).
BNP Paribas Asset Management launches the BNP Paribas Future Forest Fund
BNP Paribas Asset Management (BNPP AM) has launched the BNP Paribas Future Forest Fund (FFF) in partnership with International Woodland Company (IWC), a leader in sustainable natural capital investments. The Article 9 SFDR-classified fund focuses on sustainable forestry, combining financial returns with climate resilience, biodiversity enhancement, and deforestation prevention. Targeting USD 500 million (USD 750 million cap), the fund invests in FSC-certified forests across the US, Europe, Australia, and New Zealand. With USD 130 million secured in its first close, it aims to address the growing demand for timber, driven by population growth, urbanization, and the green transition. BNPP AM and IWC emphasize the fund’s potential to align financial goals with environmental stewardship, meeting investor demand for sustainable asset classes while actively contributing to climate and biodiversity solutions (source: mediaroom-en.bnpparibas-am.com).
ESG Data & Analytics
SGS releases toolbox to support CSRD compliance and ESG disclosure
SGS has launched three essential services to support compliance with the Corporate Sustainability Reporting Directive (CSRD) and enhance ESG reporting. These services—CSRD Pre-Assurance, ESG Disclosures & Sustainability Report Assurance, and ESG KPI Verification & Assurance—help organizations meet evolving standards with precision. The CSRD Pre-Assurance service offers a gap analysis and pre-assurance report to prepare businesses for a confident assurance process. ESG Disclosures & Sustainability Report Assurance ensures accurate, transparent ESG data, while ESG KPI Verification & Assurance strengthens investor confidence and supports sustainable finance decisions. Through these services, SGS empowers businesses to navigate sustainability challenges and contribute to a more sustainable future (source: sgs.com)
Regulatory & Law
European Commission publishes updated FAQ for EU taxonomy
The European Commission has released a new set of FAQs to support investors in implementing the EU Taxonomy, a framework for defining sustainable economic activities. The FAQs aim to simplify the Taxonomy’s application and reduce administrative burdens for companies aligning with the EU sustainable finance framework. The Taxonomy, part of the EU Action Plan on Sustainable Finance, classifies activities contributing to six environmental objectives, such as climate change mitigation, circular economy, and biodiversity protection, while ensuring no significant harm to other goals. Initially covering climate change objectives in 2022, it expanded to include four additional objectives in 2024. Key FAQ topics include technical criteria, reporting obligations, and alignment with the CSRD’s sustainability standards. Commissioner Mairead McGuinness emphasized the Taxonomy’s role in guiding sustainable transitions and enhancing its usability (source: finance.ec.europa.eu).
Aviva Investors fined by Luxembourg regulator for ESG failures
The Luxembourg financial regulator, CSSF, fined Aviva Investors Luxembourg S.A. €56,500 for failing to meet professional obligations under the Law of 2010 and related regulations. These failures were revealed during an ESG-focused inspection conducted between October 2022 and May 2023. Key issues included non-compliance with an ESG investment strategy for one sub-fund, where 5.5% of its net assets were invested in bonds below the disclosed exclusion threshold. Additionally, the measures for ensuring other sub-funds targeted United Nations sustainable development goals (SDGs) were deemed inadequate. The regulator considered the gravity and duration of these breaches, as well as Aviva’s cooperation and corrective actions, in determining the fine. The decision, published to promote transparency, aims to reinforce governance standards without destabilizing financial markets (source: cssf.lu).
Leadership Announcement
CBRE Investment Management has appointed George Crone as Sustainability Lead for UK Direct Investments
CBRE Investment Management (CBRE IM) has appointed George Crone as the new Sustainability Lead for UK Direct Investments. In this role, George will work with asset and portfolio managers to advance CBRE IM’s Sustainability Vision and Zero Emission Building Roadmap, while engaging with UK investors and occupiers. He will also play a key role in driving sustainability initiatives across the company’s UK assets. George, who joins from CBRE Advisory, brings over 11 years of sustainability experience and extensive knowledge of CBRE IM’s UK portfolios. Robbie Epsom, EMEA Head of Sustainability, emphasized the importance of sustainability in mitigating risk and maximizing long-term investment returns. George expressed excitement about supporting the team in delivering net-zero carbon performance and physical resilience across assets. His appointment highlights CBRE IM’s ongoing commitment to sustainability in its investment strategy (source: cbreim.com).