« Incentives | Main |Legislation »
Schroders launches climate change investment fund
With the Stern Review predicting the low-carbon energy product market will be worth at least $500bn a year by 2050, investment management giant Schroders have unveiled a new fund.
Launched last week the Schroder Global Climate Change Fund will invest in companies that create products or offer services which help to mitigate or adapt to the effects of climate change.
Simon Webber, joint fund manager at Schroder, said that there was a growing need for climate change-related investments. "Climate change is set to drive an industrial transformation and is potentially the biggest investment theme of the next 20 years," he observed. "It is estimated that globally, $20 trillion will need to be spent on new power generation infrastructure by 2030 to meet the rising number of new laws demanding a reduction in the used of carbon-based power."
The fund's investment objective is to provide capital growth primarily through investment in equities and securities of worldwide companies connected with climate change adaptation or mitigation.
"Across all sectors, climate change will have a broad and lasting impact along the value chain," said Matthew Franklin, joint fund manager. "For the mainstream equity investor, now is the time to adopt a global approach to what will be a major investment theme for the foreseeable future."
The fund aims to provide long-term out performance of the MSCI World Index from a concentrated portfolio of 50 to 80 stocks comprising the best stock ideas from Webber and Franklin.
Actively managed, the fund benefits from global exposure and the portfolio has little overlap with other mainstream global equity funds, offering real diversification. It is long term and has exposure to equity risk.
Schroders' Fund will invest in companies specialising in energy efficiency, environmental resources like biofuels and low carbon fossil fuels.
Sustainable transport manufacturers Toyota and poly-silicon suppliers Wacker Chemie, who provide the raw material needed for solar panels, integral to the delivery of clean energy, are also included in Schroders' fund.
Webber said: "We believe that by following this climate theme, opportunities exist for investors to reap the rewards."
The launch of the new fund provides further evidence that investors are endorsing the Stern Review's conclusion that tackling climate change is a "pro-growth strategy for the longer term".
Sarah Griffiths
