Goldman Sachs Asset Management (GSAM) says it has applied environmental, social and governance (ESG) criteria to a euro money market fund for the first time following strong interest from investors.
The ‘low volatility NAV’ euro money market fund has applied “ESG enhancements” by implementing exclusion screens on certain issuers – such as those in the tobacco or controversial-weapons sectors – and by employing a corporate engagement strategy over the issue of diversity.
Over the coming months, GSAM is planning to roll out a similar approach on other money market funds as ESG continues to garner further interest, the firm said.
In July, BlackRock launched the first environmentally aware money market fund in Europe, called the Liquid Environmentally Aware Fund (LEAF). Rating agency Moody’s said this was “credit positive” for the firm as institutional investors increasingly wanted cash management to reflect their commitments to tackling climate change.
Melanie Seymour, head of global client service at BlackRock, said at a recent conference that the fund had seen “phenomenal flows” in just a few months.
Kathleen Hughes, global head of the liquidity solutions client business at GSAM, said: “Our global clients are demanding more focus be placed on ESG investments; there is appetite from many different investor types across the globe.
“We believe the enhancements we have made to our euro money market fund will resonate with investors looking for a cash solution that is considerate toward ESG and look forward to rolling this out across other currencies in future.”
GSAM has over $400 billion in assets under supervision in money market and short duration strategies.
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