We need to move to a low-carbon economy – and in fact, we already are. Companies are putting plans into action and the technologies we need are mainstream. This shift will transform societies, businesses and industries.
Climate change investing is your chance to capture the potential returns from that – by supporting companies both mitigating against climate change and adapting to a future in a changing climate.
*Schroder International Selection Fund is referred to as Schroder ISF.
What will a low emission economy look like?
Simon Webber, portfolio manager, weighs in on climate change investing.
Climate change is going to impact every company, so we look for opportunities across a global and diverse opportunity set rather than limit ourselves to particular sectors. In doing this, we can construct a well-diversified portfolio of different companies across sectors, all linked to climate change. We do, however, exclude companies which generate significant revenues from fossil fuels.
And we’re not new to this. We’ve been running this fund since 2007, and it was one of the first of its kind.
We go deeper to find the measures that matter
We don’t rely solely on traditional measures like carbon footprint. We use proprietary tools and analysis to build a more detailed and accurate picture of how companies and industries will evolve and adapt. We’re looking for how climate change will affect revenue, margins, running costs, valuations and the impact on the entire value chain. This gives us the best opportunity to pick those companies that will flourish as part of a low-carbon economy and, ultimately, potentially deliver better returns for you.
Benefit from climate change specialism across key sectors
Our team has investment experience in sectors like technology, energy, utilities, materials and automotive – exactly the ones set to be affected by climate change. We also have a dedicated sustainability team who understand the science of climate change and how it links to economic trends as well as data scientists to provide us with unique insights that others may not be able to spot.
Schroder ISF Global Climate Change Equity
Schroder ISF Global Climate Change Equity
“The goals set out in the Paris Agreement on climate change require a complete decarbonisation of the global economy – which will mean a whole new set of products, services and technologies than we’ve used in the past. It’s very important for investors to align with those changes, and to do so now. Because some of those new technologies – like renewable energy – have really come of age.”
Lead Portfolio Manager
Capital risk / distribution policy: As the fund intends to pay dividends regardless of its performance, a dividend may represent a return of part of the amount you invested.
Counterparty risk: The fund may have contractual agreements with counterparties. If a counterparty is unable to fulfil their obligations, the sum that they owe to the fund may be lost in part or in whole.
Currency risk: The fund may lose value as a result of movements in foreign exchange rates.
Currency risk / hedged shareclass: The hedging of the share class may not be fully effective and residual currency exposure may remain. The cost associated with hedging may impact performance and potential gains may be more limited than for unhedged share classes.
Derivatives risk: Derivatives may be used to manage the portfolio efficiently. A derivative may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the fund.
Emerging markets & frontier risk: Emerging markets, and especially frontier markets, generally carry greater political, legal, counterparty, operational and liquidity risk than developed markets.
Higher volatility risk: The price of this fund may be volatile as it may take higher risks in search of higher rewards.
IBOR risk: The transition of the financial markets away from the use of interbank offered rates (IBORs) to alternative reference rates may impact the valuation of certain holdings and disrupt liquidity in certain instruments. This may impact the investment performance of the fund.
Liquidity risk: In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares.
Market risk: The value of investments can go up and down and an investor may not get back the amount initially invested.
Operational risk: Operational processes, including those related to the safekeeping of assets, may fail. This may result in losses to the fund.
Performance risk: Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macro economic environment, investment objectives may become more difficult to achieve.
Sustainability risk: The fund has environmental and/or social characteristics. This means it may have limited exposure to some companies, industries or sectors and may forego certain investment opportunities, or dispose of certain holdings, that do not align with its sustainability criteria chosen by the investment manager. The fund may invest in companies that do not reflect the beliefs and values of any particular investor.
This document does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares of Schroder International Selection Fund (the “Company”). Nothing in this document should be construed as advice and is therefore not a recommendation to buy or sell shares. An investment in the Company entails risks, which are fully described in the prospectus.
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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”). For information on sustainability-related aspects of this fund please go to www.schroders.com
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