Strategy targets opportunities arising from a carbon-constrained and climate-damaged world

Lombard Odier Investment Managers (“LOIM”) is expanding its high-conviction sustainable equities offering with the launch of a Climate Transition strategy, which captures opportunities across all sectors, created by the urgent need to transition to a net-zero economy, and adapt to a warmer climate.

LOIM’s Climate Transition strategy invests in companies that are already generating superior returns and that we believe are well positioned to generate growth and gain market share, as the transition to a carbon-constrained and climate-damaged economy continues to accelerate.

Solution providers, transition candidates from hard-to-abate sectors, and adaptation leaders are incorporated into a high-conviction global equity portfolio of 40-50 stocks that fully captures the cross-sector opportunity.

The strategy follows a disciplined and forward-looking approach to identify companies that provide solutions to reduce, avoid or capture carbon. For example, the strategy will invest in companies offering energy efficiency improvement and renewable energy projects. At the same time, the strategy purposefully targets companies within carbon-intensive industries fundamental to economic growth, but that are transitioning to practices consistent with a net-zero pathway, where we believe they will benefit from competitive advantage and enhanced profitability.

Adaptation is another source of investment opportunity in an increasingly carbon-damaged world. The strategy includes companies that are focused on building more resilient infrastructure or those that monitor physical and financial risks related to climate damage.

This approach is inspired by the latest recommendations across science, industry and policy, and is informed by developments under the EU Sustainable Finance Action Plan through the emergent EU Taxonomy and Climate Benchmarks.

The Climate Transition strategy is managed by Paul Udall and François Meunier, Portfolio Managers within LOIM’s Global Equities team. Paul has been managing sustainable investment strategies, with a particular emphasis on climate change for 18 years. François is a leading expert in digitalisation and technological innovation with more than 19 years of industry experience.

The Oxford Martin Principles for Climate-Conscious Investment, and recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) are incorporated at the heart of the strategy’s stewardship approach, as well as in the overall stewardship activities of LOIM.

Hubert Keller, Managing Partner of Lombard Odier Group and CEO of LOIM said: “We are in the midst of a massive transformation towards a sustainable net-zero economy. Trillions are at stake in this climate transition, which we believe will create significant value and fundamentally shape portfolio outcomes in the years to come.

“LOIM’s Climate Transition strategy has been designed as a mainstream global building block for asset allocation. It represents one of several important steps we are taking across the Group to align all portfolios and capture the investment opportunities arising from climate transition.”

LOIM will provide investors with a sustainability report to show the positive climate impact that investment in these companies brings to society and the planet and to report on stewardship progress across the portfolio.