Federated Hermes launches low-carbon bond fund with Swedish partner

Fund to actively engage with holdings to support climate change action

Federated Hermes has launched a new UCITS fund with the Swedish National Pension Fund AP1, which aims to generate returns by investing in bonds that support a low-carbon future.

Federated Hermes said the fund, which launched today, will not hold companies that have failed to engage on climate change and will exclude "controversial" sectors and "heavy greenhouse gas-emitting issuers that have no desire to change". The new bond fund's investment process makes use of a proprietary framework - the Climate Change Impact (CCI) Score - to reflect the progress and impact towards decarbonisation its holdings are making. A taxing question: Does carbon pricing hold the key to making the world carbon neutral before 2050? Federate Hermes head of credit, Fraser Lundie...