Columbia Threadneedle launches two new ESG funds

Columbia Threadneedle Investments, a global asset management group, continues the growth of its responsible investment (RI) offering with the launch of two new funds: the Columbia Threadneedle (Lux) Sustainable Outcomes Global Equity fund and the Columbia Threadneedle (Lux) Sustainable Outcomes Pan-European Equity fund. The launches are in response to growing investor demand for funds that target positive sustainable outcome and complement the UK sustainable equity strategy launched in 2015. 

Michaela Collet Jackson, Head of Distribution, EMEA at Columbia Threadneedle Investments, says: “We know that investors want to support solutions to the world’s sustainability challenges. Demand for sustainable investment is growing as governments work toward achieving global climate and social goals, and we have seen this intensify as the consequences of the coronavirus pandemic are assessed.  

"As a founding signatory to the UNPRI, Columbia Threadneedle’s disciplined responsible investment philosophy has long been integral to our investment process and we have consistently achieved high ratings under the UNPRI. As investors seek sustainability-focused investment, we are applying this discipline to our growing range of dedicated RI funds. We are excited to launch these funds which will be managed by our well-regarded global and European equities teams.” 

Columbia Threadneedle’s Sustainable Outcomes funds are concentrated equity strategies (one global, one Pan-European) that invest in high-quality companies targeting positive sustainable outcomes and strong financial returns. The funds focus on eight themes, drawn from the United Nations Sustainable Development Goals (SDGs), which focus on key sustainable development needs. They identify companies that are currently delivering or repositioning to deliver on those themes  

  • With integrity: meeting high Environmental, Sustainable and Governance (ESG) standards 
  • With impact potential: sustainability must be a material part of the business, and 
  • With intent: sustainability must be a genuine management goal, not an outcome of other activities 

The portfolio managers, Pauline Grange and Andrea Carzana, work with Columbia Threadneedle’s fundamental research and RI analysts to build a portfolio of companies that align with these themes and criteria. They use Columbia Threadneedle’s own RI ratings, which provide an assessment of material ESG risks and opportunities for over 8,000 companies worldwide. 

Assessing competitive advantage is at the heart of this approach – both understanding the source of a company’s competitive edge, and the structure of the industry in which it operates. Columbia Threadneedle’s proven investment approach supports the goal to provide investors with two objectives in harmony: positive sustainable outcomes and capital growth. 

Pauline Grange, Portfolio Manager of the Columbia Threadneedle (Lux) Sustainable Outcomes Global Equityfund, says: “In a world of societal and environmental change, companies that set out to invest and innovate for a more sustainable future not only support the planet and its inhabitants, but also their potential to generate strong financial returns and stable growth over the long-term.  As active investors, we encourage firms to adjust practices and innovate for solutions – not just to manage ESG risk, but to also create opportunities to deliver positive change aligned to the Sustainable Development Goals. Importantly, those companies must be consciously thinking about, and acting on their impact.” 

The strategy underlying the Columbia Threadneedle (Lux) Sustainable Outcomes Global Equity has been running as a separate strategy for institutional clients, allowing the investment team to successfully demonstrate the investment thesis and build a track record. 

Andrea Carzana, Portfolio Manager of the Columbia Threadneedle (Lux) Sustainable Outcomes Pan-European Equity fund, says: “Investor demand for sustainable equities is a structural shift supported by governments and society to address environmental and social issues. Companies are on the path to more sustainable governance, operations and products.  We will direct capital to those companies with the strategy, will and potential to enable these shifts.”