Risk Premia, Smart Beta & Impact-Weighted Accounts

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This week, Danish pension fund PenSam has agreed with Nordea Asset Management on a €2.16 billion global equity risk premia mandate, which also fits PenSam’s climate and sustainability strategy.

Stockholm-based supplier of sustainable battery cells Northvolt announced the signing of a series of loan agreements worth US$1.6 billion with a consortium of commercial banks, pension funds and public financial institutions, including Danske Bank, Danica Pension, PFA Pension, SEB, and the Nordic Investment Bank.

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Also this week, Franklin Templeton extends its Franklin LibertyShare smart-beta ETF range with the launch of two climate-focused funds aligned with the Paris-aligned version of the Stoxx Europe 600 and the S&P 500 index.

The FAIRR Initiative has launched its Sustainable Proteins Hub, a new interactive tool that allows investors to assess how 25 leading food companies use protein diversification in the context of sustainable production and consumption.

At the beginning of July, the Net-Zero Asset Owner Alliance gained its 27th member, as the United Nations Joint Staff Pension Fund (UNJSPF) joined the international group of institutional investors committed to transitioning their investment portfolios to net-zero greenhouse gas emissions by 2050.

In a recent paper, Harvard Business School Professor George Serafeim who leads the Impact-weighted accounts initiative demonstrates, together with co-authors David Freiberg, DG Park and Robert Zochowski, that environmental impact is associated with lower corporate market valuation, lower stock returns, and higher risk, consistent with environmental impacts being a financially material signal across many industries.

 

Photo by Siora Photography on Unsplash

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In the midst of a global pandemic, Apple announced one of the corporate world’s most ambitious environmental blueprints – to reduce the climate impact of every Apple device to net zero by 2030. The plan involves cutting 75 per cent of the company’s existing carbon footprint, not only for its own business but also across the manufacturing supply chain and product life cycle.

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