Taiwan’s Bureau of Labor Funds (BLF) has chosen global index provider Bloomberg to benchmark its new US$2.3 billion mandate that incorporates select environmental, social and governance (ESG) considerations, Bloomberg said in a statement.
The BLF fund, launched on July 3 2020, will be benchmarked to a customized Bloomberg Barclays MSCI Global Aggregate Corporate USD ex Controversial Industry Index, which adopts negative screening methods to exclude industries such as tobacco, alcohol and weapons.
"We are excited to partner with Bloomberg to launch Asia’s very first fixed-income mandate focusing on ESG investment principles," BLF deputy director general Liu Liju says in the statement. "Constructed to meet our specific requirements, the benchmark provides performance transparency and ensures our selected fund managers meet socially responsible criteria we set for them. We believe this is the time for institutional investors to consider sustainable investments that support a socially inclusive economic recovery. Pension funds, in particular, play an increasingly important role in guiding long-term capital responsibly and creating meaningful impact by deploying it at scale.”
With a 47-year tradition, Bloomberg Barclays Indices are the most widely-used indices for fixed-income investors seeking objective, rules-based and representative benchmarks to measure asset class risk and returns, Bloomberg says.
"This is the most exciting ESG development to take place in Asia so far," said Ji Zhuang, APAC head of indices at Bloomberg. "One of the region’s largest and most respected pension funds is sending a signal to the investment community about the future of ESG investments. We believe the appetite for custom ESG indices will only continue to grow and we look forward to supporting clients in Asia with ESG index solutions backed by Bloomberg’s powerful portfolio analytics, research, data and index heritage."
The BLF is responsible for overall planning and utilization of various labor funds in Taiwan. It has also been commissioned by the Ministry of Health and Welfare to manage the National Pension Insurance Fund. At the end of May 2020, its total asset under management has reached US$156 billion, around 45% of which is foreign investment.