M&G launches equity impact fund to tackle climate change

  • Fund to invest for a cleaner future whilst seeking attractive investment returns
  • Will invest in clean energy, green technology and the promotion of the circular economy

 M&G Investments today announces the launch of an equity strategy with a dual purpose – to invest in companies that aim to provide solutions to the challenge of climate change and seeks to deliver attractive investment returns.

The M&G Climate Solutions Fund, managed by Randeep Somel, is a concentrated portfolio of around 30 companies diversified around three main impact areas: clean energy, green technology and the promotion of the circular economy. M&G will annually report each company’s net positive climate impact and revenue alignment with climate-related UN Sustainable Development Goals, a framework embraced by this Fund.

The Fund follows the same investment approach and process as M&G’s £306 million Positive Impact strategy1, managed by John William Olsen who will deputise for Somel. Investible companies are assessed to be one of the following:

  • Pioneers – whose products or services have a transformational effect on society or the environment
  • Enablers – which provide the tools for others to deliver positive social or environmental impact
  • Leaders – which spearhead and mainstream impact and sustainability in their industries

The M&G Positive Impact Fund launched in November 2018 and has delivered 35.10% net of fees against the MSCI ACWI Index return of 20.36% since inception to the end of October 20202 .

Randeep Somel, Fund Manager, say: “The green agenda and the need to provide solutions to the challenge of climate change has unlocked the creativity and ingenuity of many companies who have these solutions at the heart of what they do. This is a multi-decade opportunity for companies who deliver innovative products and services – and for those who invest in them.”

Ben Constable-Maxwell, Head of Sustainable and Impact Investing, says: “As the world focuses on the scale of the sustainability challenges faced by our planet, positive impact finance has an opportunity to put financial firepower behind pioneering businesses providing solutions to those challenges. This Fund provides our customers with the opportunity to address the climate emergency while putting their savings to work with a purpose.”

The investible universe for the Fund is defined by M&G’s 10-strong Positive Impact team, led by Ben Constable-Maxwell, which reaches consensus on the impact of all potential investments by undertaking a three-point analysis covering the investment case, intentions and impact of each company. This framework is a practical means of scoring candidate companies and creating a watch-list of high quality, sustainable companies for the manager to choose from when the timing and opportunity are right.

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