Impact Cubed, an ESG impact data and analytics provider, has set up an innovative approach to creating sustainable investment portfolios, dubbed Smart ESG.

The Smart ESG model portfolio enables significant improvement across 15 ESG factors, including carbon emissions, freshwater usage, and waste generation, alongside a substantial increase in revenues from environmentally beneficial activiies.

“Our proprietary Smart ESG portfolio engine revolutionises investing by optimising multiple ESG factors simultaneously using outcome-oriented impact data. This results in not only enhanced and customisable ESG performance but also market-leading tracking error efficiency,” said Aston Chan, head of investment solutions at Impact Cubed.

The launch of Smart ESG is followed by the release of Impact Cubed’s new white paper, Smart ESG: A revolutionary approach to sustainable investing, offering deeper insights into the Smart ESG portfolio engine and the evolving ESG investment landscape.

Chan said: “Asset owners and investment managers are increasingly demanding more ambitious ESG indices that align with their specific set of values. Smart ESG’s ability to deliver these differentiated, high-performing solutions significantly contributes to creating a more sustainable investment landscape.”

IIGCC publishes bondholder climate stewardship guidance

The Institutional Investors Group on Climate Change (IIGCC) has published new guidance – Net Zero Bondholder Stewardship Guidance – to support corporate bondholders with their climate stewardship and engagement activities.

Developed by IIGCC’s Bondholder Stewardship Working Group, the guidance emphasises the importance of a long-term approach across the financing lifecycle and engagement across the debt ecosystem, the IIGCC stated.

This approach supports bondholders to build long-term relationships with issuers, establish a link to the issuer’s emissions targets, set objectives on time horizons beyond their initial holdings, and improve the quality and impact of bondholder engagement, thereby protecting the value of current and future investments, it announced.

Stephanie Pfeifer, chief executive officer of IIGCC, said: “The guidance marks a major step towards progressing and framing bondholder stewardship – a critical yet largely untapped element of climate and net zero stewardship. Ultimately, by enhancing bondholder stewardship, investors are better able to steward their debt capital investments, protect long-term value for clients and help finance the path to net zero. In this regard, the guidance should further support investors to deliver on their own climate commitments.”

Novata sets up private markets’ ESG benchmark collection

Technology platform Novata has launched the broadest collection of ESG benchmarks for private markets, it claimed. The release increases the scope of available benchmarks on the Novata platform to include 50 universal benchmarks and more than 200 sector specific benchmarks for the 2022 reporting period.

The breadth of these benchmarks offer an unprecedented view of ESG performance in private markets, the firm announced.

Novata’s collection of universal and sector-specific benchmarks deliver context for Novata clients to discover how their performance compares to private market peers on key ESG metrics, it said.

The underlying methodology for Novata’s benchmarks is robust, based on more than 30,000 data points from companies in 23 countries, analysed by Novata’s internal data science team, then de-identified and aggregated.

The benchmark database, Novata stated, continues to grow organically, driven by client contributor engagement on the metrics that matter to private markets participants.

“Collecting ESG data is the important first step – but once you have the data the question becomes: ‘How does this compare to others like me?,’” said Alex Friedman, CEO and co-founder of Novata.

Rabobank blacklists Teva Pharmaceuticals for anti-competitive practices

Pensioenfonds Rabobank, the €23.4bn pension scheme of the Dutch cooperative bank, has divested from the Israeli firm Teva Pharmaceuticals after a failed engagement.

The immediate reason for the divestment was the illegal price-fixing schemes the company has engaged in.

“Between 2018 and 2021, our engagement service provider Robeco has spoken with Teva several times to discuss the prevention of price-fixing between pharmaceutical companies. Because the firm has made insufficient progress on this, we have concluded the dialogue as unsuccesful and have divested from the company,” said Jack Jonk, head of investments at the pension fund.

Last year, Teva settled for $420m with shareholders who had sued the firm because they felt the share price of the firm had been inflated artificially as a result of the price-fixing schemes.

The latest digital edition of IPE’s magazine is now available