Assess the real ESG impact
In addition to green bonds, the mandate of the new fund also enables the relatively new area of sustainable bonds to be explored. While green bonds focus on environmental issues like climate change, sustainable pension funds are tied to other areas with an ESG impact.
“Green bonds and sustainable bonds offer companies a new way of raising capital,” said Thiessen. “For investors, they offer the opportunity to exert influence and at the same time avoid the volatility that is common with stocks. They can also be a source of income that many retirees and foundations we invest in really want. “
The promise that 100% of the proceeds from green bonds or social bonds will flow into the effect is particularly exciting. Of course, not all investments in ESG bonds are created equal. From the opportunity to raise new capital, some companies may take steps to green their business or projects in order to get money from ESG-minded investors.
“We are also seeing some green bond funds that have a much smaller proportion of their assets in green bonds,” said Thiessen.
To ensure that the Genus Global Impact Fund really deserves its impact investment streak, Alpha Fixe follows a multi-step process. First, the company reviews potential bond holdings with reputable and strict third parties, such as the Climate Bond Initiative or the Green Bond Principles. After examining and certifying the bonds, the company analyzes them from a financial point of view and includes ESG in the assessment. Only those bonds that go through this process are eligible for the fund’s investment universe.