Schroder ISF Global Climate Change Equity
A fund on the List of ESG Funds in Hong Kong.[1]The future is already here – begin your climate change investment journey today.
Climate change is the biggest challenge for the planet in the years and decades to come. Addressing this challenge will require a transition to a low-carbon economy. It will change societies, businesses and industries. But with change comes opportunities.
The good news is that the transition is happening now and the technologies needed have become mainstream. Climate change investing is your chance to capture the potential returns from this positive transformation. It’s your chance to support companies set to grow because they’re helping this transition to happen or helping societies adapt to the disruption it will create.
Why invest?
The impact of global warming on the economy and companies will be far reaching and profound. We believe that companies that recognise the threats and embrace the challenges early, or that form part of the solution to the problems linked to climate change, will ultimately outperform the broader market.
Schroder ISF Global Climate Change Equity is an actively managed, thematic fund capturing opportunities around the world by investing in companies we believe will be positively impacted by efforts to transition to a low carbon economy.
Identifying the climate change winners
Our investment process is built around five key themes:
Clean energy
Renewable energy sources have become cheaper to develop than other forms of power generation and they now account for almost two-thirds of net new power capacity globally[2].
Sustainable transport
Increasing access to and use of public transport is an important part of sustainable transport. However, a significant challenge for the transportation industry is ensuring that the combustion engine is replaced with environmentally friendly technology.
Environmental resources
How we use the earth’s resources will naturally play a critical role in meeting the climate change challenge. Companies at the forefront of areas such as water infrastructure, biofuels, carbon removal/storage and agricultural productivity will help us carve out more sustainable processes.
Low-carbon leader
Occurring across a wide variety of sectors and regions, a low-carbon leader is a company that has technologies, production processes, products or even a corporate culture that sets them apart in terms of dealing with the challenge of climate change.
Energy efficiency
To meet climate change targets, it is important that there is investment in new energy efficient products and technologies. This involves developing new processes and using new lightweight materials, such as aluminium.
Related documents
Schroder ISF Global Climate Change Equity
You can find more information on the fund including literature and performance data on our fund centre.
Recognition for investment expertise
ESG Clarity Awards 2022 - Climate Focused[3]
BENCHMARK Fund of the Year Awards 2021 Hong Kong - Best-in-Class, Top Fund awards - Retail Class - Ecology Sector Equity[4]
Key highlights
We've been doing this a long time
Schroder ISF Global Climate Change Equity was one of the first in its field and has been successfully running since 2007.
Looking beyond the obvious
Climate change will impact every company, so we don’t limit ourselves to particular sectors. This way we can build a diversified portfolio of companies, all linked to climate change. We do, however, exclude companies with ownership of fossil fuel reserves.
Diving deeper
We analyse how climate change will affect revenue, margins, running costs, valuations and the impact on the entire value chain to help build a complete picture of how companies will adapt and, ultimately, their return potential.
A team of climate change specialists
Our team has investment experience in sectors like technology, energy, utilities, materials and automotive – exactly the ones set to be affected by climate change.
Our sustainability experts understand the science of climate change and how it links to economic trends, while our data scientists provide us with unique insights that others may not be able to spot.
Our unique process
Universe creation
Our investment universe comprises of those companies whose long-term outlook we believe will be positively impacted by efforts to mitigate and adapt to climate change. This centers around 5 key themes; clean energy, sustainable transport, environmental resources, low carbon leader and energy efficiency.
Stock selection
The Global Climate Change team works with Schroders’ broader equity research team and takes a bottom-up research approach to stock selection. We also utilise ESG research from our Sustainability team and data science capabilities from our Data Insights Unit.
Portfolio construction
The portfolio comprises of 40-70 stocks which are weighted based on our risk-adjusted return expectations. Stocks with a higher relative upside, lower fundamental risk profile and higher liquidity will receive higher active weights in the portfolio.
Ongoing stewardship
We actively engage with companies in our portfolio to encourage transparent disclosure and ESG improvements. We evaluate voting issues on our investments and vote on them in line with our fiduciary responsibilities to clients. We vote on all resolutions unless we are restricted from doing so.
A day in the future
What will a low emission economy look like? Does any of this seem familiar to you?
60 seconds on climate change investing
How will climate change affect investment decisions?
CONTEXT and SustainEx
Our flagship tools
SustainEx
Identifying unpriced future risks…
- Forward looking measure of environmental and social impacts not yet reflected on financial statements.
- 30+ measures, sourced from 400+ pieces of academic research covering 9,000 companies.
- A single dollar amount per company used across Schroders.
- Can be applied to a portfolio to assess impact, areas of risk and possible engagement topics.
CONTEXT
And understanding how companies manage them
- 735 ESG trends for 47 sub sectors drawing on 75 different datasets (including our own tools).
- Builds on fundamental analysts’ knowledge and understanding of companies, sectors and materiality of key stakeholders.
- Enables investors to identify the best in class companies in a custom universe, with data refreshing quarterly.
- Enables targeted engagement with “improving companies” based on data and a system that tracks metrics over time.
Source: Schroders. The proprietary analytical ESG tool mentioned are designed to enhance the research process but do not guarantee favorable results.
Schroder International Selection Fund is referred to as Schroder ISF.
The fund has environmental and/or social characteristics within the meaning of Article 8 of Regulation (EU) 2019/2088 on Sustainability-related Disclosures in the Financial Services Sector (the “SFDR”).
1The list of ESG funds does not constitute an SFC official recommendation of these products or a guarantee of their ESG attributes or related performance. SFC authorization does not mean the product is suitable for any particular investor. For more details, please read
https://www.sfc.hk/en/Regulatory-functions/Products/List-of-ESG-funds.
2IEA World Energy Statistics, 2017
3The result of ESG Clarity Awards 2022 is based on the performance of the fund. ESG Clarity Awards 2022 (performance as of 31 March 2022).
4The result of Benchmark Fund of The Year Awards is based on the performance of A Acc EUR share class. Benchmark Fund of The Year Awards 2021 Hong Kong (performance between 1 October 2020 and 30 September 2021).