A major industry superannuation fund has awarded a $150 million mandate to a London-based investment manager.
Sunsuper selected Affirmative Investment Management (AIM) to manage its first green bond mandate, which aims to achieve financial returns, and generate positive environmental and social impact projects.
The bond, hedged in Australian dollars, is benchmarked against the Bloomberg Barclays Global Aggregate Index.
AIM will provide investors an annual report measuring the positive impacts of bond-funded climate change mitigation and adaptation, global sustainable development, along with the financial returns.
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Last year, the impact fund manager partnered with Colonial First State to launch the Affirmative Global Bond Fund, which also helps parent company CBA fund $15 billion of low energy carbon projects by 2025.
Sunsuper chief investment officer Ian Patrick said: "We believe ESG integration is consistent with better investment outcomes, and has the ancillary benefit of contributing to a better future for our members."
"As an organisation, we have long considered the science behind climate change as settled. We recognise that from an investment perspective, a just transition to a low-carbon global economy presents both risks and opportunities," said Patrick.
AIM's proprietary SPECTRUM Bond selection process was recently named the Best Fixed Income Firm Initiative for ESG Investment Process by the UK's Environmental Finance Sustainable Investment Awards.
SPECTRUM identifies investments based on criteria that support climate action and attains the United Nation's sustainable development goals.