Developments and commentary in and around the ESG investment space.

With climate top of the political and investment agenda, Wells Fargo Asset Management has unveiled its Climate Transition Global Investment Grade Credit framework to support further investment in the climate transition.

UK Pensions investor Nest has adopted the strategy and converted its existing $2 billion Wells Fargo allocation into the strategy. Head of responsible investment at Nest, Diandra Soobiah, said it would provide a "robust and measurable" framework to decarbonise over time and help align portfolios with the firm’s net-zero ambitions.

“Our members are likely to be significantly impacted if climate change isn’t addressed, with a strong chance of lower returns at retirement. We commend WFAM for showing leadership in addressing climate-related risks and opportunities in fixed income, enabling us to continue to meet our financial objectives in this asset class.”

The credit strategy will be managed by Scott Smith and Henrietta Pacquement in fixed income at WFAM. The goal is to outperform the Bloomberg Barclays Global Aggregate Corporate Index benchmark by 0.75 per cent over a market cycle through a combination of company investment selections, exclusions, and investee engagement.

Well’s Fargo’s asset business manages around $590 billion globally.

HSBC
HSBC Asset Management is taking a minority stake in Radiant ESG, a US-based, ESG and diversity and inclusion (D&I)-focused consulting firm.

The business was founded by Heidi Ridley and Kathryn McDonald, former CEO and head of sustainable investing at Rosenberg Equities, respectively.

Radiant ESG will become RadiantESG Global Investors, a female-owned, independent asset management firm focused on next-generation ESG investment opportunities for institutional and wealth management clients worldwide, HSBC said in a statement.

The RadiantESG team has deep expertise in equity investing and ESG data analysis, research and insight. Ridley and McDonald have more than 50 years of combined experience and each spent two decades at Rosenberg Equities, which they led to become the first fully ESG-integrated quant firm in 2017.

RadiantESG Global Investors intends to launch two investment strategies aiming to address shifts in demographics and grow demand for more sustainable investment solutions.

The newly-formed firm intends to grow its team over the course of the year and will seek an additional strategic partner to assist with infrastructure and distribution in the US and key markets.  

In 2020, HSBC Asset Management set out its strategy to shape the market for sustainable investing through leadership in policy and industry engagement, company engagement and by embedding ESG across its investment approach.

This announcement follows last year’s launch of HSBC Pollination Climate Asset Management, a joint venture between HSBC Asset Management and Pollination, a climate change advisory and investment firm, to create the world’s largest dedicated natural capital asset management company.