While everyone remains focused on the global pandemic, over the longer-term climate change is likely to be the biggest challenge. In this afternoon tea session, Invesco discussed how it is possible to align a Global Buy and Maintain credit portfolio with the goal of net zero without sacrificing diversification or overall yield.
The growing focus by governments, institutions, and individuals on environmental, social and governance (ESG) considerations, together with the realisation that these issues have a direct impact on the financial future of all companies, has led to an increasing focus on integrating ESG into investment decision-making. This is particularly relevant for investors taking a buy and maintain approach within their fixed income portfolios, given the long-term nature of the strategy where bonds are often held to maturity.
In recent years, there has been a significant increase in awareness of the impact of climate change, and what needs to be done to slow the rise in the Earth’s temperature in line with the objectives of the Paris Agreement. ‘Climate-change-aware or low-carbon investing’ is now a key theme across both institutional and personal investing. While there are still challenges around accurately measuring and reporting on metrics such as carbon emissions, water usage and pollution, there is a clear desire to construct portfolios that help tackle global warming. The COP26, held in Glasgow in November, was expected to catalyse further the push for net-zero investing across financial markets.
In this online tea, Luke Greenwood (Co-Head of Global Investment Grade Credit, Invesco Fixed Income), was be joined by colleagues Matthew Henly and Rob Neilson to discuss how a Global Buy and Maintain solution may be designed to reduce carbon intensity within a net zero investment framework while preserving the diversification and cashflow profiles required by UK pension funds.
To watch a recording of their presentation, please click on the 'Learn more here' button below (for professional investors only).
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