Weekly ESG News: Financial Services and Insurance Industry
News in the spotlight: Rize ETF releases new sustainable infrastructure and USA environmental impact ETFs in Europe
Rize ETF has introduced Europe’s first SFDR Article 9 global sustainable infrastructure ETF and the first SFDR Article 9 USA environmental impact ETF. These ETFs are listed on the London Stock Exchange (LSE) and Frankfurt Stock Exchange, with SIX Swiss Exchange listing forthcoming. The Rize Global Infrastructure UCITS ETF (NFRA) targets companies contributing to sustainable global infrastructure development, employing a unique sustainability framework. The Rize USA Environmental Impact UCITS ETF (LUSA) focuses on US companies addressing environmental objectives in the EU Taxonomy. Both ETFs carry a 0.45% OCF and aim to match specific indices. These launches expand Rize ETF’s sustainable thematic ETF offerings, which now total six out of their 11 ETFs.
Weekly Sustainable Finance Newsletter 35/2023
ESG News of the last week in detail
Products and Service
Columbia Threadneedle launches Sustainable Enhanced Income Fund
Columbia Threadneedle Investments has introduced the CT (Lux) Sustainable Global Equity Enhanced Income Fund, managed by Nick Henderson. This actively managed fund aims to generate resilient income by investing in sustainability leaders and implementing an overlay strategy to enhance yields, targeting an annual yield of 4-8%. The fund identifies companies aligned with sustainability themes and focuses on seven “megatrends” such as energy transition and sustainable cities. It adopts an Article 8 classification under SFDR regulations and uses a value-style factor tilt for a balanced approach. Additionally, a risk-managed call overlay strategy aims to boost annual yield by 2-4%. The launch represents a unique combination of enhanced income generation and sustainable investing within Columbia Threadneedle’s portfolio.
Rize ETF releases new sustainable infrastructure and USA environmental impact ETFs in Europe
Rize ETF has introduced Europe’s first SFDR Article 9 global sustainable infrastructure ETF and the first SFDR Article 9 USA environmental impact ETF. These ETFs are listed on the London Stock Exchange (LSE) and Frankfurt Stock Exchange, with SIX Swiss Exchange listing forthcoming. The Rize Global Infrastructure UCITS ETF (NFRA) targets companies contributing to sustainable global infrastructure development, employing a unique sustainability framework. The Rize USA Environmental Impact UCITS ETF (LUSA) focuses on US companies addressing environmental objectives in the EU Taxonomy. Both ETFs carry a 0.45% OCF and aim to match specific indices. These launches expand Rize ETF’s sustainable thematic ETF offerings, which now total six out of their 11 ETFs.
ESG Data and Analytics
MSCI expands Google Cloud partnership to develop generative AI services
MSCI is expanding its partnership with Google Cloud to develop generative AI solutions for the investment industry, with a focus on risk management, conversational AI, and climate exposure analysis. The goal is to provide clients with quicker access to data and actionable insights, enabling more informed investment decisions. This collaboration will leverage Google Cloud’s gen AI technologies to enhance portfolio resilience and support decarbonization efforts. Henry Fernandez, MSCI’s CEO, emphasized the significance of advanced data technologies in meeting industry expectations, while Google Cloud’s CEO, Thomas Kurian, highlighted the transformative potential of generative AI in financial services and portfolio management.
Regulatory and Law
Biden approves USD 12bn in loans for EV producers
The US Department of Energy has pledged $12 billion in loans and grants to support the transition of the auto industry towards electric vehicles (EVs). This initiative includes $2 billion in grants and $10 billion in loans to convert US auto manufacturing facilities into EV production centers and strengthen the domestic EV supply chain. Additionally, $3.5 billion will be invested in boosting US advanced battery production. This move aims to address climate change and gain support from the United Auto Workers union. Transportation is a significant source of pollution in the US, and EV adoption is a crucial step in reducing emissions. The UN’s Intergovernmental Panel on Climate Change suggests that transitioning to EVs could cut emissions in the transportation sector by over 80%.
PRI-coordinated pilot with a focus on Australia completed
Global institutional investors, with approximately US$8 trillion in assets under management, are expanding their collaborative engagement initiative focused on climate change with Australian governments. Coordinated by the UN-supported Principles for Responsible Investment (PRI), the initiative initially launched in September the previous year. It aims to support governments in aligning with the Paris Agreement’s climate goals, reducing risks associated with climate change, and enhancing disclosure of sovereign exposure to climate risks. New investors joining this effort include Achmea, Fidelity International, Morgan Stanley Investment Management, and others. The expansion will enable more engagement, including with sub-sovereign entities, and may potentially extend to other countries based on the outcomes of the Australian pilot.