Wells Fargo Asset Management (WFAM) today announced the launch of the Wells Fargo Municipal Sustainability Fund in an effort to provide clients innovative solutions and play a leading role in sustainable investing.
The Municipal Sustainability Fund utilizes a municipal bond assessment framework that WFAM developed in-house through the WFAM ESG Impact Framework, a partnership involving municipal bond professionals and environmental, social and governance (ESG) professionals. The fund invests in securities that are assessed to have positive environmental or social impact at the bond or issuer level. The investment process also includes a top-down macroeconomic assessment and a bottom-up fundamental security analysis.
The fund is managed by WFAM’s Municipal Fixed Income team, a 28-member investment team.
Sustainable investing is catching on with financial services firms. In fact, last year, Coin, a rather new conscious investing platform backed by financial services company John Hancock, launched to help people make a difference with their money by investing in a personalized mix of companies whose impact is aligned with their values. Coin lets customers invest directly in companies contributing toward eight Impact Areas aligned with the United Nations Sustainable Development Goals (SDGs).
In fact, three-quarters of US asset managers say their firms now offer sustainable investing strategies, up from 65% in 2016, according to new survey results from Morgan Stanley Institute for Sustainable Investing and Bloomberg. Eighty-two percent say it is possible to maximize financial returns while investing sustainably, and 89% say sustainable investing is here to stay.
The survey results demonstrate that sustainable investment strategies are now a “strategic imperative,”says Matthew Slovak, head of global sustainable finance at Morgan Stanley.
Most asset managers view sustainable investing as a business-building approach and believe that financial returns and sustainable outcomes can go hand in hand. But to drive future success in the space, asset managers say, companies need more expertise, more precise data, and better reporting.