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1. Demographic: UN, Ourworldindata.org. Social: Yale University. Sustainability: Friede, Busch and Bassen - Journal of Sustainable Finance & Investment. Technology: US National Bureau of Economic Research

2. The analysis of the impact of green bonds is BlackRock analysis based on USD 1million invested in the iShares Global Green Bond ETF. The analysis is based on publicly available environmental impact reports as communicated by issuers as of green bonds and the holdings of the iShares Global Green Bond ETFs of 18/05/2020. 83.0% of iShares Global Green Bond ETF/s constituents are covered by BlackRock’s analysis. The results are for informational purposes only, to illustrate the positive environmental impact of a green bond portfolio. They are not meant to be a prediction or a projection. Not every issuer reports on every metric, hence no linear extrapolation should be performed. Quinet cannot be held responsible for inaccuracies in issuers’ reporting. US EPA’s Greenhouse Gas Equivalencies Calculator or CO2 and energy measures. Other assumptions: 1 Olympic pool – 2,500 m3 of water. 1 football field = 7,000 m2.

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Quintet’s investment analysts will continue to scan the investment horizon to determine where change is creating opportunity. We believe the investment industry has a large role to play in funding the firms and technologies that can have a positive impact on our environment and that we can do more. Our pioneering approach, focussed on transforming the economy, reducing emissions and removing carbon emitted can potentially help you achieve long-term returns in a way that supports a more sustainable world for future generations.

The next step

We can do more

The power of green bonds

We can reduce global emissions through our investment choices

Source: BlackRock, see footnote 2

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The path to climate neutrality also requires our society and economy to transform. Within the public markets, green bonds are an effective and transparent dedicated asset to finance transformation. Green bonds are debt instruments where the proceeds are exclusively used to fund green projects and are certified by the Climate Bond Initiative. Each entity that issues a green bond produces a report detailing how the money is spent and the impact on the environment.

Innovate by adopting and funding new sources of energy, supporting new technologies and re-engineering supply chains through a circular economy

Carbon focus: Transform

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The emerging frontier in pursuit of climate neutrality is carbon removal. From an investment perspective a range of opportunities exist. At present the most scalable removal techniques are voluntary emission reductions (VERs), commonly called voluntary carbon credits. VERs represent a ton of carbon that is either removed from the atmosphere – for example, by tree planting – or avoided – for example, by funding more fuel efficient wood-burning stoves. VERs operate within a robust system of project development and specification, independent verification and certification.

Actively remove CO2 from the earth’s atmosphere by ecological or engineering methods

Carbon focus: Remove

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Fighting climate change

We can reduce global emissions through our investment choices

USD 1 million invested in low-carbon equities is associated with around 22t CO2 /year

CO2

That is 57% less than conventional
global diversified equities 

Note: Scope 1 and 2 emissions. Source : MSCI, Nov 2020

Reducing greenhouse gas (GHG) emissions is a simple and effective concept. From an investment perspective we can measure the carbon emissions from corporations and then compute an investors’ share of, or ‘responsibility’ for, them.

Consume fewer resources, create less waste and substitute products and services

Carbon focus: Reduce

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Climate neutral investing is a form of thematic investment looking to benefit from social, regulatory, technological and sustainable shifts. What’s more, we believe that we can do more by helping investors have a direct impact on the environment. Our framework for climate neutral investing uses three strategies – reduce, remove and transform.

A spotlight on carbon neutral investing

We can do more

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Each force on its own provides a degree of insight and visibility that can be valuable relative to the short-term nature of financial markets. However, their full potential is realized when deployed in combination, as themes at the intersection of several structural drivers are more likely to persist.

Powerful structural drivers help capture opportunities

Source: See footnote 1

Identifying future themes

Our approach

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5 drivers

Thematics may outperform the wider market over a long-term horizon because they are underpinned by enduring structural drivers, which can operate with a degree of independence from the broader economic cycle. We consider five structural drivers when identifying and monitoring thematic opportunities:

Long-term drivers

Thematic opportunities

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Thematic investing can be a powerful approach for long-term investors, that involves identifying the trends that are changing our world but are underappreciated by the wider market, leading to potentially attractive returns for investors.

Many of today’s most powerful trends have significant sustainable drivers – from healthcare to energy and food. For this reason, we include thematics as one of our four investment lenses in our sustainable investing toolkit. We also map themes to the United Nations’ Sustainable Development Goals (SDGs). The SDGs were adopted by all UN member states in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.

Our approach to thematic investing

We can do more

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Sustainability

Sustainability is a powerful driver of change with important implications for investors. We’re playing an active role in helping you invest in the firms and technologies that support a better future

We believe it’s our responsibility to try to do more, to help support a richer life and planet. As part of our ongoing commitment to improving the world around us, we’re pioneering an investment framework in pursuit of climate neutrality called ‘reduce, transform and remove’.

Scroll down

Introducing climate neutral investing

We can do more

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Introducing climate neutral investing

We can do more

Sustainability

Sustainability is a powerful driver of change with important implications for investors. We’re playing an active role in helping you invest in the firms and technologies that support a better future

We believe it’s our responsibility to try to do more, to help support a richer life and planet. As part of our ongoing commitment to improving the world around us, we’re pioneering an investment framework in pursuit of climate neutrality called ‘reduce, transform and remove’.

Our approach

Thematic investing can be a powerful approach for long-term investors, that involves identifying the trends that are changing our world but are underappreciated by the wider market, leading to potentially attractive returns for investors.

Many of today’s most powerful trends have significant sustainable drivers – from healthcare to energy and food. For this reason, we include thematics as one of our four investment lenses in our sustainable investing toolkit. We also map themes to the United Nations’ Sustainable Development Goals (SDGs). The SDGs were adopted by all UN member states in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.

Our approach to thematic investing

We can do more

5 drivers

corner.png

Long-term drivers

Thematic opportunities

Thematics may outperform the wider market over a long-term horizon because they are underpinned by enduring structural drivers, which can operate with a degree of independence from the broader economic cycle. We consider five structural drivers when identifying and monitoring thematic opportunities:

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In 1968 the UN predicted that the global population would be 5.44 billion by 1990, which was remarkably close to the realized (estimated) figure of 5.35 billion.

Demographic change is predictable over long time periods

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Regulatory changes often take place gradually over long periods of time to reflect a changing world. Regulations can increase or restrict profits, often impacting entire industries or countries for decades.

Regulatory waves can boost or constrain profits

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According to Yale University, the proportionof American adults who said climate change was important to them rose from 55% in 2013 to 61% in 2016. By 2018 it was 72%.

Social shifts tend to occur gradually before gathering pace

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A study conducted by Friede, Busch and Bassen reviewed more than 2,000 academic papers and concluded the positive relationship between sustainability and corporate economic performance.

Sustainability is linked to positive corporate performance

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Technological progress is the “only source of permanent increases in productivity” according to the US National Bureau of Economic Research.

Technological progress is critical

Each force on its own provides a degree of insight and visibility that can be valuable relative to the short-term nature of financial markets. However, their full potential is realized when deployed in combination, as themes at the intersection of several structural drivers are more likely to persist.

Climate neutral investing is a form of thematic investment looking to benefit from social, regulatory, technological and sustainable shifts. What’s more, we believe that we can do more by helping investors have a direct impact on the environment. Our framework for climate neutral investing uses three strategies – reduce, remove and transform.

A spotlight on carbon neutral investing

We can do more

Reducing greenhouse gas (GHG) emissions is a simple and effective concept. From an investment perspective we can measure the carbon emissions from corporations and then compute an investors’ share of, or ‘responsibility’ for, them.

Consume fewer resources, create less waste and substitute products and services

Carbon focus: Reduce

icon
info_1.jpg

The emerging frontier in pursuit of climate neutrality is carbon removal. From an investment perspective a range of opportunities exist. At present the most scalable removal techniques are voluntary emission reductions (VERs), commonly called voluntary carbon credits. VERs represent a ton of carbon that is either removed from the atmosphere – for example, by tree planting – or avoided – for example, by funding more fuel efficient wood-burning stoves. VERs operate within a robust system of project development and specification, independent verification and certification.

Actively remove CO2 from the earth’s atmosphere by ecological or engineering methods

Carbon focus: Remove

icon (copy)

The path to climate neutrality also requires our society and economy to transform. Within the public markets, green bonds are an effective and transparent dedicated asset to finance transformation. Green bonds are debt instruments where the proceeds are exclusively used to fund green projects and are certified by the Climate Bond Initiative. Each entity that issues a green bond produces a report detailing how the money is spent and the impact on the environment.

Innovate by adopting and funding new sources of energy, supporting new technologies and re-engineering supply chains through a circular economy

Carbon focus: Transform

icon (copy1)

The power of green bonds

We can reduce global emissions through our investment choices

Source: BlackRock, see footnote 2

infograph_2c.png

Quintet’s investment analysts will continue to scan the investment horizon to determine where change is creating opportunity. We believe the investment industry has a large role to play in funding the firms and technologies that can have a positive impact on our environment and that we can do more. Our pioneering approach, focussed on transforming the economy, reducing emissions and removing carbon emitted can potentially help you achieve long-term returns in a way that supports a more sustainable world for future generations.

The next step

We can do more

Identifying future themes

Powerful structural drivers help capture opportunities

Note: Scope 1 and 2 emissions. Source : MSCI, Nov 2020

Fighting climate change

We can reduce global emissions through our investment choices

Seeing the world differently

Quintet’s Chief Investment Office share their views on the economy, markets and investing in our monthly Counterpoint publication.
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