Global asset manager M&G Investments announced today the launch of the M&G Climate Solutions Fund, aiming to invest in companies that provide solutions to the challenge of climate change, while seeking to deliver attractive investment returns.

According to M&G, the fund will be a concentrated portfolio of around 30 companies diversified around three main impact areas: clean energy, green technology and the promotion of the circular economy. The fund will be managed by M&G Manager Randeep Somel.

Somel said:

“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.”

M&G stated that the new fund will follow the same investment approach and process as M&G’s £306 million Positive Impact strategy, launched in 2018. According to the strategy, investible companies are assessed according to one of three categories, including 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, and; Leaders, which spearhead and mainstream impact and sustainability in their industries.

The investible universe for the Fund is defined by M&G’s Positive Impact team, led by Head of Sustainable and Impact Investing Ben Constable-Maxwell. The team 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. Using this framework, M&G scores candidate companies and creates a watch-list of high quality, sustainable companies to choose from when the timing and opportunity are right.

Constable-Maxwell, said:

“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.”

M&G stated that it will annually report on each of the fund’s companies’ net positive climate impact and revenue alignment with climate-related UN Sustainable Development Goals (SDGs).