Schroders and BlueOrchard's climate impact strategy marks first anniversary

Schroders and BlueOrchard, a leading global impact investment manager and member of the Schroders Group, are celebrating the first anniversary of their climate impact strategy: the Schroder ISF BlueOrchard Emerging Markets Climate Bond fund. 

The UCITS strategy offers daily liquidity and invests across a range of environmentally focused projects, including green bonds, sustainability bonds, and other climate focused bonds. The fund supports the climate-related Sustainable Development Goals of the United Nations and seeks to deliver long-term, stable growth for investors by investing in issuers which aim to have a positive impact on the environment.

Its launch last year was further evidence of the successful ongoing collaboration between Schroders and BlueOrchard, having also worked together to launch the BlueOrchard Covid-19 Emerging and Frontier Markets MSMEs Support Fund. Schroders announced the acquisition of impact investing pioneer BlueOrchard in 2019.

The investable universe of the fund is defined by a team of impact specialists, acting independently from portfolio management. This encompasses public debt securities issued for the financing and re-financing of projects with clear environmental, green or social benefits and includes initiatives in renewable energy, energy efficiency, green buildings, and clean transportation. It focuses on emerging markets*, which offer significant scope for achieving the targeted positive performance from both an impact and financial perspective.

Among other issuers, the fund has invested in ReNew Power, a leading Indian renewable energy company. The company contributes to reducing the environmental footprint of the country and supports the energy transition in India, a rapidly growing market.

The investment strategy builds on BlueOrchard’s local presence and 20+ year track record in emerging and frontier market impact investing. Furthermore, the fund benefits from BlueOrchard’s independently verified impact management and ESG investment process[1], which is the foundation for the implementation, monitoring and ultimately measurement of the fund’s impact goals.

Michael Wehrle, Head of Investment Solutions, BlueOrchard, commented:

“We are very pleased with how our fund has navigated the current challenging market environment. A crucial component of our strong performance has been our active management approach, which allows us to steer the portfolio and take advantage of opportunities in a volatile environment. In our view, emerging markets offer attractive opportunities in this context.”

 Karine Szenberg, Head of Europe, Schroders, commented:

“Ahead of launching this fund we had identified climate change as one of the key global threats. This fund has therefore been focused on creating change in the world by investing in areas that can generate positive impacts, while at the same time also meeting the investment objectives of our clients to drive tangible positive change in this space.”

Earlier this year, the fund was awarded a Gold rating by 3D Investing, a subsidiary of Square Mile. 3D Investing’s certifications deliver a comprehensive evidence-based review that provides independent verification of a fund’s or company’s credibility in responsible investing. BlueOrchard was particularly praised for its effectiveness in delivering high impact, whilst avoiding harmful investments, as well as its impressive approach to engagement.

 

*Investments in emerging markets, particularly those involving foreign currencies, may present significant additional risk including the risk of loss of invested capital.

[1]  BlueOrchard is signatory to the Operating Principles for Impact Management since April 2019. As part of this commitment, its impact management framework B.Impact, has been independently verified one year after by BlueMark, a Tideline company, and a leading provider of independent impact verification services for investors and companies.


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