The challenges of decarbonising a Buy & Maintain portfolio
Portfolio Manager, James Briggs and Head of UK Institutional, Anil Shenoy, share their thoughts on climate change risk management in Buy & Maintain portfolios while discussing the issues around data and the importance of performing forward looking fundamental ESG analysis on each bond within the portfolio.
Key takeaways
- Buy & Maintain corporate bond portfolios are expected to form a core component of a defined benefit (DB) pension scheme’s overall investments, particularly as they mature and approach their endgame.
- Climate change risks are particularly relevant for these long-term portfolios as their investment horizon may be 15-20 years out, over which time climate related risks are expected to materialise.
- While there is no simple solution, an iterative discussion with the investment manager is necessary to understand any trade offs that need to be considered when implementing climate risk strategies in portfolios.
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Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
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