M&G has launched its first sustainable corporate bond strategy, the M&G (Lux) responsAbility Sustainable Solutions Bond Fund, in partnership with Swiss impact investing firm responsAbility. The fund, classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR), targets institutional and wholesale investors looking for sustainable active fixed-income options.
The strategy blends M&G’s expertise in credit investing with responsAbility’s 20-year track record in impact investing. It aims to build a diversified global portfolio of investment-grade bonds that drive positive change in six key areas: better health, better work & education, social inclusion, circular economy, environmental solutions, and climate action.
Investments will align with the UN Sustainable Development Goals (SDGs) and will consist of two types of bonds: project financing bonds, which fund specific projects targeting environmental (green) or social outcomes, and bonds from solution provider businesses that address social and environmental challenges through their core products and services.
The fund will be managed by M&G’s Mario Eisenegger and Ben Lord, with responsAbility acting as the investment adviser, supporting sustainability analysis and serving on M&G’s Impact, SDG & Solutions Committee. The launch coincides with a growing ESG bond market, which has seen $306 billion in corporate bond issuance in 2024, representing 23% of European investment-grade supply.
Neal Brooks, Global Head of Product and Distribution at M&G said, “This strategy is testament to M&G’s ability to combine its capabilities to create unique investment solutions that play to our strengths in active fixed income and responsAbility’s market-leading impact credentials. The M&G (Lux) responsAbility Sustainable Solutions Bond Fund has been tailored to meet demand from pension funds, insurance companies and wholesale investors in Europe looking to align active public fixed income portfolios to positive change.”
Fund manager Mario Eisenegger added, “One of the most effective ways for bond investors to contribute to the Sustainable Development Goals is by directly funding environmental and social projects and providing financing to businesses that make a meaningful, positive contribution to the planet or society through their underlying business models. This fund does exactly that, giving the team a clear mandate to be laser-focused on these urgent priorities when putting our clients’ money to work. Furthermore, the global reach and flexibility of this investment grade credit fund are beneficial for portfolio construction as these features enlarge the opportunity set for credit selection, improve diversification, and allow the fund to access sustainable solutions around the globe as they emerge.”
Stephanie Bilo, Chief Client & Investment Solutions Officer, responsAbility said, “As pioneers in impact investing and with a solid 20-year track-record in delivering for our clients and societies in emerging markets, we know how crucial it is for investors to make sustainable decisions among the myriads of options available. We’re very pleased to join forces with M&G’s fixed income team for the first time, capitalising on the strength of our climate research capabilities and contributing to the sustainable focus of the portfolio. This is a great opportunity to combine our expertise and deliver to institutional and wholesale clients alike.”
