Climate+
A multi-private asset impact portfolio targeting negative carbon emissions
High Impact
Aims to facilitate the transition to a negative carbon emissions economy through its investments
Diversification benefits
Globally diversified multi-private assets portfolio in a single solution with simplified governance
Climate change solution
A portfolio targeted to deliver a positive contribution to climate change
Diversified climate focused multi-private asset portfolio
Our innovative Climate+ strategy aims to facilitate the transition to a net zero economy within three years. By building and operating a diversified portfolio across private markets asset classes and sectors focused on climate related themes, the strategy aims to facilitate the transition to a more sustainable future.
Since the climate crisis is not the only challenge we face, the strategy finances projects with clear social benefits, like affordable real estate and governance, such as financial inclusion.
Three pillars of the climate change solution
Since the environmental challenges we face are complex, we believe there are three pillars that contribute to a positive climate solution:
Mitigation: Efforts to reduce or prevent emission of greenhouse gases through the use of new technologies & energy efficient equipment, or changing consumer behaviour.
Adaptation: The process of adjusting to current or expected climate change and its effects. Building resilience to climate change for individuals and communities.
Capture: Carbon sequestration is the process of capturing carbon dioxide before it enters the atmosphere, transporting it, and storing it.
Effective, accessible, impactful
We believe that responsible private market solutions are an important part of any investment portfolio and should be widely accessible. That’s why we use a single portfolio to harness the best of Schroders Capital’s internal expertise and selected external capabilities to invest across infrastructure, real estate, private equity and natural capital.
We’ve coupled this with an innovative, open-ended evergreen structure. Not only does this mean you can invest on an ongoing basis, but by pooling these assets together it’s accessible to institutional investors of all sizes - including DC schemes.
A global climate solution with expert credentials
Every aspect of Climate+’s strategy benefits from our expertise. It uses a full range of specialist internal capabilities from Schroders Capital and best-in-class external manager funds such as natural capital. We also draw on the knowledge and experience of BlueOrchard, our impact investment business who have over 20 years of expertise in impact investing.
This all contributes to a solution with demonstrable positive impact, fully measurable using our comprehensive impact framework. That also means you’re fully informed on the benefits the portfolio is delivering, from negating carbon emissions to powering homes.
“Accompanying institutional investors on their journey to climate alignment gives us a unique opportunity to focus on how Schroders Capital can help meet the needs of people and the planet through a range of private asset classes and sectors. We are proud to direct and manage capital towards the Sustainable Development Goals and the transition to a net-zero world.”
Head of Sustainability and Impact at Schroders Capital
Key Investment Risks
While private assets investments offer potentially significant capital returns, funds and companies may face business and financial uncertainties. There can be no assurance that their use of the financing will be profitable to them or to any Fund. Investing in private asset funds and unlisted companies entails a higher risk than investing in companies listed on a recognised stock exchange or on other regulated markets. This is in particular because of the following major risk factors:
Investment risk: Private asset investments typically display uncertainties which do not exist to the same extent in other investments (e.g. listed securities). Private asset investments may be in entities which have only existed for a short time, which have little business experience, whose products do not have an established market, or which are faced with restructuring etc. Any forecast of future growth in value may therefore often be encumbered with greater uncertainties than is the case with many other investments.
Capital loss risk: The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.
Market risk: Market risk is the risk of investment losses due to negative effects of the capital markets on the overall performance of the fund.
Credit risk: The fund will have an investor commitment/draw-down funding model which exposes the investment vehicle to the credit risk of its investors. If an investor fails to comply with a drawdown notice, the investment vehicle may be unable to pay its obligations when due.
Liquidity risk: Given the illiquid nature of private asset investments, investing in private assets are subject to asset liquidity risk. This liquidity risk is a result of the likelihood that a loss from current net asset value would be realised if an asset in the fund needed to be sold quickly in the secondary market to meet the obligations of the fund.
Emerging market risk: Investments in emerging markets, or in funds that invest in emerging markets, are exposed to an increased level of risk resulting from the less developed nature of such markets and the institutions, legal system, and infrastructure within such markets.
Currency risk: Investments in companies or instruments which are denominated in currencies other than the fund’s respective currency expose the fund to the risk of losses in case foreign currencies depreciate.
Interest rate risk: The value of the fund’s fixed income investments may decrease if interest rates rise.
Valuation risk: It may be difficult to find appropriate pricing references in respect of unlisted investments. Certain investments are valued on the basis of estimated prices and are therefore subject to potentially greater pricing uncertainties than listed securities. The value of investments in real estate and other real assets is generally based upon the opinion of a specialist valuer, which opinion may not reflect the price at which the relevant asset could actually be realised.