Aviva Investors has launched its second equity fund targeting opportunities arising from the transition to a low carbon economy in less than a year, Investment Week can reveal.
Managed by Jaime Ramos Martin with support from climate change specialist and senior ESG analyst Rick Stathers, the Aviva Investors Climate Transition Global Equity fund will invest in companies whose revenues derive from goods and services addressing climate change mitigation and adaptation.
In addition to allocating to companies that are "aligning their business models for a warmer, low-carbon world", the fund will not invest in those exposed to coal, unconventional fossil fuels, Arctic oil and gas production, or thermal coal electricity generation.
Using Stathers' proprietary methodology for defining climate investment risk, the portfolio's exposure to companies producing oil and gas, or gas-fired power generation will be limited.
The fund will aim to outperform global equity markets though a "highly-integrated investment approach", which will make use of Aviva Investors' 27-strong global responsible investment specialists and over 40 equities investment professionals, the firm said.
It follows the August 2019 launch of the Aviva Investors Climate Transition European Equity fund, which saw assets swell to €1bn (£900m) within its first six months.
Equities CIO at Aviva Investors David Cumming said: "Addressing climate-related risks is critical. It is an absolute requirement of asset managers and a key ESG focus for our investors.
"Since launching the Climate Transition European Equity Fund last year, we have seen tremendous interest from clients in the benefits of this type of investment-led solution.
"Through connected thinking across our investment teams and climate specialists, we expect our focus on this sector to give us an effective edge in our efforts to tackle climate change."
Ramos Martin added: "Markets are not properly pricing in the consequences of climate change and the necessary measures to mitigate and adapt to the issue.
"This represents a strong opportunity to deliver superior investment performance and sustainable outcomes for clients through positive climate risk management."