APG, AP1 seed new strategies with climate-change focus

APG Asset Management, the in-house manager of ABP, Heerlen, Netherlands, and AP1, Stockholm, developed and seeded two new strategies with a climate-change focus.

APG in collaboration with analytics and index provider Qontigo and BlackRock developed a series of global responsible investment indexes, the iSTOXX APG RI Index Family.

One of the indexes, iSTOXX APG World Responsible Low-Carbon SDI index, will be used for a new €1 billion ($1.2 billion) passive developed markets equity allocation managed by BlackRock, an APG spokeswoman confirmed.

The index composition is based on APG's carbon datasets and its clients' exclusion policies, its carbon footprint budget and objectives relating to the United Nations' Sustainable Development Goals.

"Our aim is to contribute to a global standard for investing in SDGs, and these new responsible SDI indices reflect this goal," said Ronald van Dijk, managing director at APG, in a news release Wednesday.

ABP had €523 billion in assets as of June 30.

Separately, the 431.5 billion Swedish kronor ($50.5 billion) AP1 seeded another new strategy, Federated Hermes Climate Change High Yield Credit Fund with an undisclosed amount, confirmed Tina Ronnholm, portfolio manager at AP1.

The fund will not hold companies where engagement on climate-change transition has failed and will exclude controversial sectors and greenhouse gas-emitting issuers with no plans to change.

AP1 had 4.5 billion kronor invested in high-yield bonds as of June 30.

"We are pleased to help bring the climate-change fund to the market, a fund we have worked intensely on with the Federated Hermes' credit team for the past year," Ms. Ronnholm said in a separate news release. "Having divested from fossil fuels throughout our portfolio last year, our ambition now and going forward is to contribute to getting absolute emissions down significantly in the real economy."

"Providing financing to facilitate a much-needed transition across sectors is an example of the actions we undertake in order to meet our net-zero target we are determined to achieve," she added.