Columbia Threadneedle Investments has launched a duo of responsibly invested funds allocating to emerging market and European equities, as reported by ESG Clarity in the UK.
The Threadneedle (Lux) Emerging Market ESG Equities Fund is managed by senior portfolio manager Young Kim, and the Threadneedle (Lux) Pan European ESG Equities Fund, is a conversion of the Threadneedle (Lux) Pan European Equities Fund. The latter will continue to be managed by Ann Steele and Dan Ison, who have been increasing the intensity of ESG analysis in the fund over the past 18 months.
CIO William Davies said the move to launch the EM ESG fund and convert the pan-European mandate into an ESG vehicle was due to “growing investor demand”, which he described as “one of the most significant shifts in asset management in a generation”.
“The recent European sustainable finance regulations,” he added, “have only served to accelerate this trend. We are pleased to reflect these market developments by adding two new ESG funds to our responsible investment offering, to sit alongside our existing sustainable outcomes fund range.”
The EMs fund will use Columbia Threadneedle’s proprietary responsible investment ratings and research, and combining it with fundamental company analysis, Kim will apply ESG factors to identify growth opportunities and material risks in emerging market companies. The firm said he will focus on “high quality innovative businesses” which can “sustain high returns on capital and strong growth over the long term”.
Kim said: “A growing number of companies in emerging markets now recognise the value of adopting ESG business practices and the potential positive effect it can have on generating additional shareholder returns. By evaluating a company through the ESG lens, we can gain a comprehensive understanding of how ESG risks are considered and used to sustain its long-term future.”
Meanwhile, the pan-European fund will aim to deliver capital growth by investing in companies with sustainable competitive advantages and strong operating practices.
Manager Steele commented: “While the market is still assessing the long-term consequences of the coronavirus pandemic, ESG issues – particularly the significant social impact – have become even more important. They are a key part of the new economic reality, as regulatory oversight covering emissions and social responsibility will continue to grow.”