Sweden’s AP2 has invested $50m (€44m) in a social and environmental impact fund.
Gothenburg-based national pension fund has invested in the Rise Fund, a private equity vehicle aimed at producing positive social and environmental effects that can be measured, as well as competitive financial returns.
The fund is managed by TPG Growth, the international growth equity and middle market buyout platform of alternative asset firm TPG.
Eva Halvarsson, chief executive of AP2, said: “The idea of impact investing is not new, but what is new and unique about this strategy is that the Rise Fund is relying on independent research to measure the positive outcomes in financial terms.”
She said the investment was in keeping with its mandate to both maximise returns and take ethical and environmental criteria into consideration.
The Rise Fund measures how much tangible impact a potential investment is expected to have during its investment life cycle, focusing on the impact outcomes defined by the UN Sustainable Development Goals.
“Through our sustainable development activities and the investments we make, the fund contributes in various ways towards to the UN’s Sustainable Development Goals and we try to be actively involved in these goals,” Halvarsson said.
UK public sector funds eye ‘new era’ for climate risk engagement
A group of UK public sector pension funds is partnering with the 50/50 Climate Project in a bid to ratchet up its engagement with companies on climate risks and their potential impact on shareholder value.
The Local Authority Pension Fund Forum (LAPFF), which is a voluntary association of pension funds with combined assets of around £200bn (€230bn), said the partnership “is set to enhance LAPFF’s established position as a leading investor voice on climate change risk”.
The 50/50 Climate Project is a non-profit organisation that aims to help large institutional investors “bring climate competence to corporate boards”. Its mission is to engage with the 50 public companies with the largest carbon footprint.
Kieran Quinn, LAPFF chairman, said it “marks a new era in the forum’s efforts to safeguard shareholder value against climate-change risk.”
Specifically, the arrangement with the organisation will provide LAPFF with research on company risks and opportunities, analysis of climate competencies on corporate boards, and involvement in campaigns to “refresh” boardrooms as well as support the development of a pipeline of credible “climate-literate” director candidates.
KLP blacklists 10 companies
Norwegian municipal pensions firm KLP has excluded 10 companies from its investment universe on ESG grounds following a semi-annual review of investments.
The NOK596bn (€62.6bn) institutional investor said it decided to exclude PetroChina Co and Bharat Heavy Electricals because of the risks of, respectively, gross corruption and serious environmental damage.
It is also banishing a further eight coal companies from its range of potential investments and is altering the basis for exclusion for two companies.
The coal companies to be newly excluded are CEZ, Eneva, Great River Energy, Huadian Energy, Malakoff Corp, Otter Tail Corp, PGE Polska Grupa Energetyczna and SDIC Power Holdings.
KLP was invested in two of these firms before the decision to exclude them – CEZ and PGE Polska Grupa Energetyczna.
In addition, KLP has decided to reintroduce Singapore Technologies Engineering into its investment universe.
The business had been excluded by the Norwegian pension fund for 16 years because of the production of anti-personnel land mines, but last year Singapore Technologies Engineering confirmed it had stopped making this type of weapon, KLP said.
Leonardo SpA, which had been excluded since 2006 because of nuclear weapons production, is now excluded because of an unacceptable risk of gross corruption.
Meanwhile, the reason for AES’ exclusion by KLP has changed to coal activity from human rights violations in connection with a steam project in Panama.
The company’s involvement with that project has now stopped, KLP said.