Global investment manager M&G has launched a sustainable corporate bond strategy in collaboration with Swiss impact-focused asset manager responsAbility, which it acquired in 2022. Classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR), the Sustainable Solutions Bond Fund was designed following engagement with institutional and wholesale investors seeking sustainable active fixed-income strategies. Leveraging M&G’s credit expertise and responsAbility’s long-standing track record on impact and sustainable investing, the team will follow a fundamental credit strategy, constructing a diversified portfolio of global investment grade bonds driving positive change in six areas: better health, better work and education, social inclusion, circular economy, environmental solutions, and climate action. Investments will also be mapped to the UN Sustainable Development Goals (SDGs), with portfolio bonds classified either as ‘project financing bonds’ – funding a specific project targeting either environmental (green bonds) or social outcomes (social bonds) or a combination of both (sustainability bonds) – or as ‘solution provider businesses’, designating bonds issued by companies that actively address problems linked to environmental or social challenges through their core products and services. The fund will be co-managed by Mario Eisenegger and Ben Lord – long-standing members of M&G’s €161 billion (US$173.9 billion) fixed-income investment division. responsAbility will act as investment adviser. “One of the most effective ways for bond investors to contribute to the SDGs is by directly funding environmental and social projects, and providing financing to businesses that make a meaningful, positive contribution to the planet or society,” said Eisenegger. “This fund does exactly that, giving the team a clear mandate to be laser-focused on these urgent priorities when putting clients’ money to work.” Ten years after the first corporate green bond was issued in 2013, global ESG corporate bond issuance reached US$306 billion across the first three quarters of 2024, accounting for 23% of the current total corporate supply in the European investment grade space.
