Luxembourg’s €18bn pension reserve fund has announced the winners of a tender for its first mandates dedicated to seeking a positive social or environmental impact.
The Fonds de Compensation (FDC) awarded a €200m mandate for “sustainable impact” global equities to BNP Paribas Asset Management in Paris, while Allianz Global Investors’ branch in the French capital won a €100m euro-denominated green bonds mandate.
FDC said the equity impact mandate was exclusively for investments in listed companies “that intend to generate” a financial return as well as a “social or environmental impact”. The investments must cover at least five of the 17 Sustainable Development Goals.
Mirova and NN Investment Partners are on standby for the respective mandates.
FDC also awarded a €750m global equities “sustainable approach” mandate, which was secured by Robeco with AQR Capital Management as the standby manager.
The first investments under the new mandates are planned for the first quarter of next year, according to FDC.
The mandates are the outcome of FDC’s revised investment strategy of 2017, which included a decision to “intensify and expand the consideration of sustainable and socially responsible investment criteria”.
The fund has adopted a policy of requiring asset managers applying to run an actively managed mandate to provide evidence that they implement a sustainable or socially responsible approach in their investment strategy and decision-making processes. This could be by way of positive or negative screening, thematic investments, engagement, or other means.
The “sustainable approach” wording for the mandate awarded to Robeco captures this revised approach to manager selection. Investment managers’ approach to sustainability is understood to have counted for 10% of the overall selection decision.