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Toward a low-carbon economy

20 April 2018

It is our view that climate change has become a key factor in our economic and social development, and that it will most probably remain that way for a long time.

Urgent action is needed. We face catastrophic consequences due to climate change, and immediate measures are needed to adapt to this new reality.

In 2014, the International Energy Agency (IEA) estimated that USD 53 trillion would need to be invested by 2035 in order to meet the COP 21 targets and potentially avoid the worst consequences of global warming. This amount of money cannot conceivably be mobilised without the participation of ordinary investors. The role of finance in the fight against climate disruption is to guide investments toward companies that contribute to reducing carbon emissions in order to limit warming to under two degrees, as established at COP 21. However, current trends on the equity indexes point to a warming of at least four degrees. To prevent the worst, we need not only to slow down CO2 emissions but also to reduce emissions by 60% from current levels by 2050.

We believe that this objective is perfectly compatible with our fiduciary obligations as asset managers: namely, to protect savings entrusted to us and to limit the costs associated with risks linked to climate change.

This is especially true considering that our strategic analysis of companies based on innovation and the ability to adapt and respond has unveiled surprising opportunities for value generation in areas like electrification, the optimisation of resource allocation and clean technology.

These were the factors behind our launch of the Zero Carbon global fund three years ago. This thematic fund maintains a neutral carbon footprint and invests in companies that create value through the energy transition. The core of our investment strategy is to focus on companies that provide energy solutions that generate additional growth thanks to their technologies, making it possible to transition toward a low carbon economy.

Key themes in this regard include digitalisation, automation and renewable energies. The fund also invests in companies that have gained competitive advantages in terms of cost and productivity by reducing their carbon footprint.

The “impact” component of this fund relates to the stated goal of reducing carbon emissions from investments and the possibility of measuring the results. Our aim is to combine strong environmental performance with strong financial performance and thereby demonstrate that using investments as a tool in the fight against climate disruption can also deliver strong financial results.

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