- Launch of a sustainable corporate bond fund aligned with UN Sustainable Development Goals (SDGs).
- Investment in ESG bonds and companies driving positive environmental and social change.
- Response to growing investor demand for active, sustainable fixed income portfolios.
M&G and Swiss impact asset manager responsAbility have introduced the M&G responsAbility Sustainable Solutions Bond Strategy, an SFDR Article 9 fund. This launch addresses the increasing demand from institutional and wholesale investors for actively managed sustainable fixed income strategies.
Investment Focus
Leveraging M&G’s extensive credit expertise and responsAbility’s impact investing track record, the fund will build a diversified portfolio of global investment-grade bonds. These bonds aim to drive positive change in six key areas:
- Better health
- Better work & education
- Social inclusion
- Circular economy
- Environmental solutions
- Climate action
Investment Approach
Investments will be mapped to the UN Sustainable Development Goals (SDGs) and will include:
- Project Financing Bonds: ESG bonds funding specific environmental (green bonds) or social outcomes (social bonds), or a combination of both (sustainability bonds).
- Solution Provider Businesses: Bonds issued by companies that actively address environmental or social challenges through their core products and services.
Management Team
The fund is co-managed by Mario Eisenegger and Ben Lord, seasoned members of M&G’s €161 billion global fixed income division. responsAbility acts as Investment Adviser, providing sustainability insights and supporting M&G’s research teams. They will also be a voting member of M&G’s independent Impact, SDG & Solutions Committee.
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Market Context
Ten years after the first corporate green bond was issued in 2013, the ESG bond market has grown significantly. In the first three quarters of 2024, global ESG corporate bond issuance reached $306 billion, accounting for 23% of the total corporate supply in the European Investment Grade space.
Strategic Importance
Neal Brooks, Global Head of Product and Distribution at M&G, said: “This strategy is testament to M&G’s ability to combine its capabilities to create unique investment solutions that play to our strengths in active fixed income and responsAbility’s market-leading impact credentials. The M&G (Lux) responsAbility Sustainable Solutions Bond Fund has been tailored to meet demand from pension funds, insurance companies and wholesale investors in Europe looking to align active public fixed income portfolios to positive change.”
Manager’s Perspective
Fund manager Mario Eisenegger added: “One of the most effective ways for bond investors to contribute to the Sustainable Development Goals is by directly funding environmental and social projects and providing financing to businesses that make a meaningful, positive contribution to the planet or society through their underlying business models. This fund does exactly that, giving the team a clear mandate to be laser-focused on these urgent priorities when putting our clients’ money to work.
“Furthermore, the global reach and flexibility of this investment grade credit fund are beneficial for portfolio construction as these features enlarge the opportunity set for credit selection, improve diversification, and allow the fund to access sustainable solutions around the globe as they emerge.”
Collaborative Effort
Stephanie Bilo, Chief Client & Investment Solutions Officer at responsAbility, commented: “As pioneers in impact investing and with a solid 20-year track-record in delivering for our clients and societies in emerging markets, we know how crucial it is for investors to make sustainable decisions among the myriad of options available. We’re very pleased to join forces with M&G’s fixed income team for the first time, capitalising on the strength of our climate research capabilities and contributing to the sustainable focus of the portfolio. This is a great opportunity to combine our expertise and deliver to institutional and wholesale clients alike.”
