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LOIM launches four target net zero strategies

News Team, 04/05/2021

Lombard Odier Investment Managers (LOIM) today announced the launch of four ‘TargetNetZero’ strategies. The Fixed Income and Equity strategies – both Global and European - are designed to decarbonise portfolios and to help accelerate the transition to a more sustainable economy, while seeking to deliver strong returns for investors.

Aligned to the Paris Agreement upon launch, with an implied temperature rise of no more than 2°C, the strategies will progressively accelerate the rate of decarbonisation of their constituents to target Net Zero CO2 emissions by 2050, aligned with the more ambitious objective of the Paris Agreement of limiting global warming to 1.5°C.

The TargetNetZero range of strategies offer investors diversified portfolios that follow a differentiated and deeply integrated investment process. This process goes beyond a simplistic comparison of carbon footprints, to take into account the emission trajectories of companies across all emission scopes, as well as considering companies’ exposure to internal, industry and regulatory pressure that may further accelerate the climate transition. These unique, forward-looking insights allow us to re-assess exposure to carbon risks and opportunities and implement portfolio adjustments to improve alignment to the transition to a net zero economy progressively.

Hubert Keller, Managing Partner of Lombard Odier said in a statement: “At Lombard Odier we believe that investors need to re-think their approach to Net Zero. Although the industry has started to understand the urgency around decarbonisation, many of the solutions available in the market are simplistic, don’t sufficiently address the problem and (in some cases) significantly increase the risks and biases within portfolios.

“Carbon footprints alone do not tell us the full picture of climate risks in a portfolio. We believe that maintaining a diversified portfolio that identifies companies on a strong decarbonisation path, irrespective of sector, will help accelerate the transition to net zero and provide compelling returns for investors.

“At LOIM, we continue to expand and deepen our carbon expertise, so that we can fully assess companies’ carbon exposure and transition pathways, as they move toward achieving net-zero emissions targets. We have developed a four-step decarbonisation process that adds a more forward-looking, nuanced perspective on the climate transition and forms the backbone of our new range of TargetNetZero strategies.”

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