The latest developments in the ESG space.

Allspring
Allspring has just launched two sub-funds: Climate Transition Buy and Maintain Plus 2025-2029 Fund and the Climate Transition Buy and Maintain Plus 2030-2034 Fund. Clients of global professional services company Aon provided £100 million ($124 million) of seed capital for the funds’ launch.

These two new funds complement Allspring’s existing climate transition fixed income suite where Allspring manages over £4 billion across a range of global fixed income products (investment grade, high yield, short duration, buy and maintain), allowing different client needs and risk appetites to be met.  

Fixed income is a core capability at Allspring, with three-quarters of its total assets (£339 billion of £440 billion) attributed across the fixed income spectrum, the firm said in a statement. Allspring has been managing buy and maintain mandates for over 20 years and manages £18 billion for clients globally.

The Climate Transition Buy and Maintain Plus Funds, which were launched on 22 January 2025, are registered for distribution in the UK for institutional investors. The plus element identifies the differentiation from traditional buy and maintain strategies, whereby these funds can allocate up to 25 per cent to sub-investment-grade credit in a risk-controlled manner seeking to provide investors an enhanced yield, which is particularly attractive in today’s market environment. 

The funds apply a climate transition approach to help clients achieve their net-zero ambition whilst meeting their financial objectives. The funds also integrate environmental, social and governance criteria to meet wider responsible investing commitments, the firm continued.  

Allspring Global Investments™ is an independent asset management company with more than £483 billion in assets under advisement, over 20 offices globally and investment teams supported by more than 460 investment professionals.

Baillie Gifford
Edinburgh-headquartered investment manager Baillie Gifford has renamed its Sustainable Income Fund. With effect from 31 January 2025, it is now the Baillie Gifford Monthly Income Fund.

The fund, with assets of £159.46 million ($198.7 million), aims to deliver a high level of natural monthly income together with capital returns which look to grow in line with inflation over the long term. The Financial Conduct Authority’s (FCA) new Sustainability Disclosure Requirements made it necessary to either adopt an SDR label or change the name of the fund. Hence the new name and the classification of “non-labelled” under SDR.

The firm highlighted that there will be no modification to the way the fund is managed; the investment philosophy and portfolio construction process remain the same. 

In addition, James Dow will be replaced by Jon Stewart as a member of the Baillie Gifford Monthly Income Portfolio Construction Group, effective on 31 January 2025. Stewart, who has 18 years of investment experience, has played an important role in the development of the Monthly Income strategy; he is Baillie Gifford’s lead property investor, while Dow will remain intrinsically linked to the strategy, the firm said in a statement.

Baillie Gifford, which has assets under management of £224 billion, has offices in Edinburgh, Amsterdam, Dublin, Frankfurt, Hong Kong, London, New York, Shanghai, Toronto, and Zurich.

Clarity AI
Clarity AI, a New York-headquartered sustainability tech company, has released a solution that fund managers, ESG analysts and others use to grapple with complex rules governing sales in Europe.

New sustainability labels have come out in recent years, such as a clamp down on “greenwashing.” Certain requirements, for example the UK’s Sustainability Disclosure Requirements – introduced by regulators – and others, such as France’s SRI label and Germany’s FNG, are government or industry-led.

“The goal is to reduce the amount of time fund managers spend on identifying potential investments that fall short of the standards, and understanding the cause for non-compliance, in order to decide on the best course of action,” Henry Waind, product lead at Clarity AI, said.

Recent guidelines from the European Securities and Markets Authority highlight the need for maintaing high standards for funds that use ESG-related terms in their names, including an 80 per cent minimum investment in sustainable assets. 

“Sustainability regulations and labels are proliferating, making it increasingly challenging for fund managers to keep up,” Tom Willman, regulatory lead at Clarity AI, said.

Clarity AI’s clients include firms such as Invesco, Nordea, Lazard Asset Management, and Santander. It also partners with organisations such as BlackRock, the London Stock Exchange Group (LSEG), BNP Paribas, Caceis, and SimCorp. It has offices in North America, Europe, and the Middle East.