Aviva Investors' Climate Transition strategy reaches EUR1bn AUM
Aviva Investors' Climate Transition European Equity Strategy has reached EUR1 billion in assets under management in the six months since its launch, with EUR100 million in seed money from Aviva France and the rest from external clients.
The strategy invests in businesses that support the transition to a low carbon economy as global temperatures continue to rise due to climate change.
Euan Munro, Chief Executive Officer, Aviva Investors, says: “Unless emission trends are reversed, global warming has been predicted to threaten our existence by the end of the century and is therefore an utterly critical issue for investors. The fact that this strategy has attracted strong investor interest in such a short period of time highlights the urgency required by asset managers to offers solutions that address climate-related risks.”
Discussing the initial investment positioning of the strategy, Francoise Cespedes, Manager of the European Equity Climate Transition Fund, says: “Climate change provides opportunities for both companies whose products and services provide solutions that help drive down greenhouse gas emissions and those that support the efforts society will have to make to adapt to the physical impacts of climate change, such as rising sea levels and higher temperatures.
“We are exploring a number of different themes in the strategy. Energy efficiency is one example. It represents a cost-effective way of cutting carbon pollution from power plants, one of the biggest sources of greenhouse gas emissions. LED lamps typically use up to 80 per cent less energy than the traditional incandescent variety and can last up to 25 times longer, making a significant contribution towards cutting carbon emissions. The market-leading company in general LED lighting is expected to deliver two billion LED lightbulbs by 2020. We believe this sector is good for the economy, good for the environment and cheaper for consumers.
“Another theme that we expect to make a huge impact in the transition to a low carbon world is renewable energy. Renewables could supply four-fifths of the world’s electricity by 2050, massively cutting carbon emissions and helping mitigate climate change. But there is some way to go before renewable energy sources such as solar and wind power are fully integrated. We have been looking towards companies that can provide cleaner, more reliable and more affordable wind power and expect this sector to be at the forefront of helping mitigate climate change.”
The Climate Transition European Equity Strategy was launched in August 2019. It aims to increase the value of investments over time by adopting a long-term, high conviction investment approach, targeting companies deriving material revenues from goods and services addressing climate change mitigation and adaptation, as well as investing in those companies aligning their business models for a warmer, low-carbon world. The strategy does not invest in stocks exposed to coal, unconventional fossil fuels, Arctic oil and gas production or thermal coal electricity generation, and limits exposure to those producing oil and gas or gas-fired power generation.