Fulcrum targets two-degree portfolio with climate fund launch
Aligned with Paris Agreement temperature target
Fulcrum Asset Management has targeted a sub-2 degrees portfolio, as it launches a new climate change fund, which will be aligned with the Paris Agreement global temperature target.
Fulcrum said the Fulcrum Climate Change fund, which would have assets of £70m at launch, would be the first global equity strategy to be climate aligned.
The fund, a Luxembourg-domiciled SICAV, will be expected to hold between 150 and 200 stocks, invested across 25 themes, with no investee company exhibiting a temperature higher than 2.5 degrees. The weighted average portfolio temperature would be below 2 degrees, the firm said.
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Fulcrum said it had worked with Iceberg Data Lab, an environmental transition expert, and in collaboration with Arvella Investments, an Anglo-Franco sustainable wealth manager.
Fulcrum CEO Andrew Stevens said it had a "unique opportunity to bring to the market something that would have a real effect on climate change mitigation, while still providing diversified exposure to the global equity market".
Arvella Investments CIO Benoit Mercereau added: "With most major global benchmarks on a 3-degree trajectory, we are pleased to have been able to work with Fulcrum to design a fund that is not only providing us with access to the global equity market but doing so in a way that is in-line with a below 2 degree trajectory."
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Fulcrum worked with Iceberg to create a product designed to be in-line with science-based international best practise, it said. It will invest in companies that are on track to meet the Paris Agreement's 2 degree temperature target.
The firm added it would engage with companies to encourage further decarbonisation, climate-related disclosure and climate target setting.
Commenting on the launch, Square Mile Investment Consulting and Research managing director Richard Romer-Lee noted "strong investor support for strategies which embrace a responsible approach to investment", which was only likely to grow. "We are delighted to see Fulcrum innovate in this area," he added.
"Climate change poses one of the greatest threats to the environment, to society as a whole and to the continuation of life as we know it," Romer-Lee said.
"There is broad, popular support for taking active steps to ensure that the objectives of the Paris Agreement are met, and by allocating capital to companies that are aligned with its principles and which encourage the transition to a greener economy, asset managers can make a significant impact in the battle against climate change."
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