Defining the Global Environment universe
The Global Environment team has identified a diverse universe of companies that they believe are benefiting from decarbonisation. This paper explains the methodology they use to find them.
The Strategy aims to achieve long-term total returns by investing in the equities of companies expected to contribute to the transition to a lower-carbon global economy. It focuses on businesses in three key areas of decarbonisation: renewable energy, resource efficiency and electrification. The Strategy aims to have a measurable positive impact by financing companies that are solving the world’s environmental challenges.
A compelling investment proposition
A differentiated investment approach
An experienced team
We believe that investing in decarbonisation offers investors exposure to a new structural growth area; the potential to hedge carbon risk; and the chance to make a positive impact.
We look across global value chains to identify companies generating revenues from businesses that are helping the world avoid emissions.
We target companies with three key attributes: growth potential, sustainable returns and competitive advantages.
We believe an unconstrained and focused approach, combined with a long-term investment horizon and active engagement, is the optimal way to invest in decarbonisation.
General risks. Past performance is not a reliable indicator of future results and performance targets may not be achieved; losses may be made.
Specific risks. Currency exchange: Changes in the relative values of different currencies may adversely affect the value of investments and any related income. Derivatives: The use of derivatives is not intended to increase the overall level of risk. However, the use of derivatives may still lead to large changes in value and includes the potential for large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss. Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. insolvency), the owners of their equity rank last in terms of any financial payment from that company. Concentrated portfolio: The portfolio invests in a relatively small number of individual holdings. This may mean wider fluctuations in value than more broadly invested portfolios. Commodity-related investment: Commodity prices can be extremely volatile and losses may be made. Emerging market (inc. China): These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems. Sustainable Strategies: Sustainable, impact or other sustainability-focused portfolios consider specific factors related to their strategies in assessing and selecting investments. As a result, they will exclude certain industries and companies that do not meet their criteria. This may result in their portfolios being substantially different from broader benchmarks or investment universes, which could in turn result in relative investment performance deviating significantly from the performance of the broader market.