Investments 

M&G joins flurry of firms launching ESG products

M&G joins flurry of firms launching ESG products

M&G Investments is the latest firm to have launched a fund investing in companies that have a 'positive impact on society'.

The fund, which was launched on November 29, is known as the M&G Positive Impact fund.

It is managed by John William Olsen, with Ben Constable-Maxwell, head of sustainable and impact investing at M&G, taking the lead on the fund’s impact assessment, and measurement of environmental, social and governance (ESG) characteristics.

The fund will focus on six areas: climate solutions, clean air, water and land, the circular economy, better health, work conditions, and social equality. Across these areas, the fund invests in three types of impact companies: pioneers, enablers and leaders.

Graham Mason, chief investment officer for M&G equity, multi-asset and retail fixed interest, said: "Impact investing is important to us, and our customers.

"With the launch of this fund, impact investing is now more accessible to a wider base of our customers, and those looking for access to companies making a positive difference, either to society or the environment in which they operate, while aiming to deliver excellent investment performance."

Adrian Lowcock, head of personal investing at Willis Owen, said: "Impact investing is the new ethical investing, avoiding companies which damage society but more positively focused on looking for companies that make a positive social contribution. So rather than just avoiding the bad there is an active element of searching and investing for the good.

"The biggest challenge is in doing so is the priority is this impact with investment returns a secondary consideration.

"That said, as consumers and investors become more socially conscious and social media is allowing society to hold companies to greater account, businesses that address the big issues of the day are gaining interest."

He added: "The target of beating the MSCI AC World over five years highlights that fund managers and investors no longer see ESG and even the more focused impact strategies as separate to the wider market and these investments can compete with more mainstream funds. ESG will support the long term performance, but given the focus of the fund you are likely to still have greater volatility in the short term."

M&G's fund comes on the heels of a string of rival fund launches in recent months, including Fidelity's water and waste fund and Rathbones' global sustainability fund.

david.thorpe@ft.com