Reasons to invest
Through high-conviction investment in companies with both strong fundamentals and the potential to transition to a low-carbon world, we target financial outperformance and a positive impact.
Why Climate Change High Yield Credit?
The strategy aims to outperform the global high-yield market through high-conviction investment in companies with strong fundamentals that also demonstrate the potential to decarbonise and transition to a low-carbon world.
We seek companies that have the willingness and ability to make a positive impact on the planet. Investors can gain exposure to the high-yield market and support the transition to a low-carbon economy.
We exclude companies involved in activities that we believe to be unsustainable or unethical. Although not exhaustive, our exclusions list includes companies involved in fossil fuels, tobacco, controversial weapons and those in contravention of the principles of the UN Global Compact.
How we invest
Our twin objectives are to deliver:
Strong financial performance
Positive climate impact through decarbonisation
We believe these aims are interwoven and self-reinforcing.
We begin with positive and negative screens. The negative screen excludes fossil fuels, tobacco, controversial weapons and companies in contravention of the principles of the UN Global Compact, as well as companies with a Climate Change Impact (CCI) score of 5. CCI scores measure a company’s decarbonisation in terms of progress and impact (the latter referring to the contribution the company makes to decarbonising the economy through its operations and products).
The positive screen selects innovators; companies with science-based targets; genuine transition stories encouraged by engagement and green bonds.
We assess the company fundamentals, scoring their operating, financial and ESG strengths based on analyst and engagement insight. Concurrently, our Sustainable Fixed Income team analyses the materiality of the company’s climate change agenda and assigns our CCI score.
Once we have established the company’s fundamentals and climate change agenda, we will identify which instrument within the capital structure it is best for us to use. Our analysts will produce a score for value.
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