Address Climate Change in Your Bond Portfolio
Our Sustainable Climate Bond Strategy (the Strategy) seeks to align with the goals of the Paris Agreement, and allows investors to mitigate current and future carbon emissions, and reallocate capital towards green bonds and companies adapting to climate-related risks.
Climate Targets
Bonds which qualify as green or climate aligned according to CBI standards and taxonomy. 1
GHG emissions resulting from a company’s fossil fuel reserves. 1
Direct and indirect GHG emissions. 1
Adaptation Score on Climate change preparedness 1
Revenues from extractives activities. 1
Lose the Carbon, Fund the Transition
The Strategy employs a stratified sampling approach to achieve the most efficient trade-off between climate targets and tracking error, while achieving long-term returns broadly in line with the underlying benchmark.
The Strategy is characterised by the following:
Mitigation and Adaptation
Reallocates capital away from companies with high carbon emissions, fossil fuels and brown revenues
To help build a more climate-resilient portfolio, the Strategy also increases exposure to companies working proactively to minimise their exposure to actual or expected physical, economic and regulatory impacts of climate change.
Fund the Transition
Increases exposure to green bonds, climate-aligned issuers, adapting companies and bond issuers investing in the solutions needed to achieve net zero by 2050.
Aligns with the Paris Agreement
The Strategy seeks to align with the ambitious goals of the Paris Agreement — including limiting climate change to the 2° Celsius warming scenario relative to pre-industrial levels.2
Exclusionary Screening
Excludes companies involved in activities relating to controversial weapons, R-Factor™ Laggards, severe ESG controversies, tobacco, violations of the UN Global Compact and a prescriptive regulatory screen.
Meets Client Objectives Flexibly
The Strategy framework is flexible and allows clients to select a credit or aggregate benchmark which includes corporate bonds.
Targeted Climate Objectives
Other Climate Bond Solutions
Our Low-Carbon Corporate Bond framework offers bond investors a way to achieve a lower carbon footprint, while maintaining similar returns to the performance of their selected fixed income benchmark. Our customised portfolios can minimise tracking error for a targeted level of carbon reduction or maximise carbon reduction for a targeted level of tracking error.
We can help clients achieve significant improvements in carbon intensity with minimal impact to credit quality or interest-rate risk relative to corporate bond benchmarks.
How to Access
Both the Sustainable Climate Corporate Bond Strategy and Low-Carbon Corporate Bond framework are available via a separately managed account only.