Fulcrum launches climate change fund to keep global temperature rise below two degrees
Fulcrum Asset Management has launched a new global equity fund which aims to invest in companies that are on-track to meet the Paris Agreement’s target of keeping the global temperature rise below 2 degrees Celsius.
The Fulcrum Climate Change Fund’s launch AUM is expected to be GBP70 million, and it aims to hold between 150-200 stocks invested across 25 themes, with no company in the portfolio having a higher temperature than 2.5 degrees.
Fulcrum says it is the first active global equity fund to be climate-aligned based on the Paris Agreement’s targets, and is designed to provide investors with diversified exposure to the global equity market, whilst maintaining a weighted average portfolio temperature of below 2 degrees.
Climate change has been a core investment theme in the Fulcrum Diversified Absolute Return Fund and will be strengthened with the launch of this stand-alone fund.
Andrew Stevens, CEO Fulcrum Asset Management, says: “We are delighted to respond to client demand for an ambitious and innovative climate change solution. We believe that we have a unique opportunity here to bring to the market something that could have a real effect on climate change mitigation while still providing diversified exposure to the global equity market.”
Fulcrum has worked with environmental transition experts, Iceberg Data Lab, to create a product that is designed to be in line with science-based international best practice. The fund is also a product of collaboration with Arvella Investments which, after an extensive yet fruitless search for an established diversified equity fund aligned with the Paris Agreement, turned to Fulcrum for a solution.
Benoit Mercereau, CIO at Arvella Investments, says: “With most major global benchmarks on a 3-degree trajectory, we are pleased to have been able to work with Fulcrum to design a fund that is not only providing us with access to the global equity market but doing so in a way that is in-line with a below 2°C trajectory.”
The Paris Agreement highlights the importance of making financial flows consistent with low-carbon pathways. The fund is designed to contribute to the re-allocation of capital by maintaining a portfolio temperature of below 2-degrees. Fulcrum will also engage with companies to encourage further decarbonisation, climate-related disclosure and climate target setting. If all companies adopted their sector’s existing best practice, the world would be much closer to mitigating global warming.
Richard Romer-Lee, managing director, Square Mile Investment Consulting and Research, says: "Climate change poses one of the greatest threats to the environment, to society as a whole and to the continuation of life as we know it. There is broad popular support for taking active steps to ensure that the objectives of the Paris Agreement are met, and by allocating capital to companies that are aligned with its principles and which encourage the transition to a greener economy, asset managers can make a significant impact in the battle against climate change. We believe that the already strong investor support for strategies which embrace a responsible approach to investment can only grow, and so we are delighted to see Fulcrum innovate in this area with the launch of this fund."
The Fund will be offered as a LUX SICAV - UCITS.