In focus

Net zero and multi-asset: what the transition means for portfolios

Asset owners are no strangers to targets; setting them, managing against them and revising them over time.

Our idea of a ‘sustainability budget’, which we introduced in March 2019, is such an example. It relates to the percentage of relevant sustainable capital allocation to target in a portfolio. At that time, we talked about the journey that asset owners would need to take to increase this target over time.

Now asset owners and investment managers find themselves having to set new targets and think about replotting their journey. This time they need to consider applying a ‘carbon budget’ to target net zero emissions from their assets by 2050 or sooner. While Schroders has committed to net zero by 2040, asset owners will need to set their own targets, which may be more or less ambitious.

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The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.