The $3.1 billion M&G Emerging Markets Bond fund will introduce an additional layer of ESG oversight with the addition of the Norges Bank Exclusions from August.
While the fund does not have a sustainable investment objective, it excludes certain investments “to mitigate potential negative effects on the environment and society”.
Used as part of its exclusionary approach, the Norges Bank Exclusions is a regularly updated list of companies for exclusion or placed under observation.
The exclusions are determined by Norges Bank Investment Management and are based on recommendations from Norway’s Government Pension Fund’s Council of Ethics.
The Norges Bank Exclusions list includes several high-profile names, including British American Tobacco, Reliance Power and Boeing.
“The change will have little impact on the fund’s investment universe, but will make it more attractive for investors with these requirements, which we believe will increase future growth opportunities,” it said in an investor letter.
The asset manager said there will be no change to its investment objective, policy or strategy and its classification as an Article 8 fund under the Sustainable Finance Disclosure Regulation (SFDR) will remain unchanged.
According to its sustainability-related disclosures document, the M&G Emerging Markets Bond fund expects at least 70% of the portfolio to be aligned with environmental and social characteristics and at least 20% held in sustainable investments.