MAPFRE launches a biomethane fund. What makes it an article 9 fund?

The regulations on sustainable investment are one of the main concerns of investors, asset managers, and direct investors, given the reporting requirements, the difficulty of accessing data, and the changes to be made in order to categorize a portfolio as Article 8 or 9 under the Sustainable Finance Disclosure Regulation (SFDR).

Classifying a fund as Article 8 means that it “promotes sustainable activities,” although one can also invest in companies that do not meet ESG criteria. Article 9, on the other hand, is much more stringent and only includes fund that have an explicitly defined positive environmental and social impact.

In short, it could be said that Article 9 funds are the elite of socially responsible investing, and MAPFRE now has one of them.

This week, the Group launched MAPFRE Energías Renovables II, FCR in collaboration with is partners Abante and IAM Carbonzero. This new vehicle will invest in biomethane, a 100% green biofuel obtained from animal and vegetable waste that can be injected directly into the natural gas grid, generate electricity via engines, and be used as a fuel.

"This fund is the first MAPFRE fund to be categorized as Article 9 in line with the recent Sustainable Finance Disclosure Regulation (SFDR). It is the most demanding category because it includes sustainable funds that also have an explicitly defined positive environmental and social impact. With this fund, in addition to offering good financial returns, MAPFRE is contributing to the decarbonization of the planet, providing alternatives to the energy crisis, and, most importantly, we are investing in rural areas through agriculture and livestock. I’m also proud to say that the first plants will be developed in my native region of Extremadura," said Antonio Huertas, CEO of MAPFRE, during his speech at the APIE XL seminar in Santander.

The fund aims to raise up to 100 million euros, in a first phase, for the construction and development of between 20 and 25 plants in Spain over a five-year period. In turn, this will generate a total of 70 permanent jobs and 240 indirect jobs.

“With the 25 plants that the fund aims to build in Spain over a period of five years, the current installed capacity of this type of energy in in Spain is set to increase fivefold,” says Huertas.

The project looks to address several core strands, such as the decarbonization of the planet, the energy crisis, and the high dependence on imports of natural gas from abroad, as well as investment in the rural economy through agriculture and livestock farming.

 

Other sustainable funds

MAPFRE also has other funds that, while qualifying as ‘Socially Responsible Investment’ (SRI) under Article 8, will also be fighting for Article 9 classification in the short term. In this case, they are the following:

• MAPFRE AM Inclusión Responsable: this fund focuses on companies committed to including persons with disabilities in the workforce. The ultimate objective of this is to create a positive impact in the social integration of this group of people while achieving long-term profitability.
• MAPFRE AM Capital Responsable: this mixed fund seeks to preserve capital and growth with a long-term time horizon. Through a balanced portfolio of European stocks and bonds, it aims to raise awareness of the importance of including ESG criteria in the decision-making process of companies, prioritizing those that include it in their corporate governance.

Meanwhile, MAPFRE is also moving into sustainable investment through the France-based boutique investment firm La Financière Responsable, in which it now controls 51% of its capital following the purchase of an additional shareholding in February.