9 November 2021 - Paris Alignment Forum afternoon tea discussion - Invesco

Pensions for Purpose and Invesco hosted a Paris Alignment Forum afternoon tea at 2.30pm on Tuesday 9 November to discuss how to achieve net-zero alignment in investment grade credit portfolios.

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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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Invesco risk warning:

Investment risks: The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information:For Professional Clients in the UK. This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice. Issued in the UK by Invesco Asset Management Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK. Authorized and regulated by the Financial Conduct Authority.

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