Global investment manager Schroders announced today the launch of the Schroder ISF Global Climate Leaders, a new global equity fund investing in companies with ambitious targets to decarbonize, in alignment with the achievement of a 1.5°C scenario or better under the Paris Agreement.

According to Schroders, the new fund aims to provide investors with exposure to companies benefitting from a competitive advantage due to their ‘climate change leadership.’

Andy Howard, Global Head of Sustainable Investment, Schroders, said:

“As we look ahead, climate change will be a defining driver of the global economy, society and financial markets. Our clients have increasingly recognised the risk it poses and we’ve seen growing demand for investment funds targeting investment in those companies leading the transition to a lower carbon world. Schroder ISF Global Climate Leaders is a ground-breaking and innovative fund that places decarbonisation at the heart of its approach.”

The new fund will form part of the Schroders Global Transformation Range suite of funds providing investors with long-term exposure to the most powerful and persistent themes shaping the world’s future. The launch follows the introduction of another GTR fund earlier this week, investing in companies driving the transition towards more sustainable food and water.

Schroder ISF Global Climate Leaders will invest in 50-80 stocks across geographies and sectors, chosen from an investible universe created using company disclosures, climate initiatives and Schroders’ climate alignment tools. The fund will be managed by portfolio managers Simon Webber and Isabella Hervey-Bathurst.

Webber said:

“Achieving the goals of the Paris agreement requires a massive step change in the pace of emissions reduction globally. This fund will invest in those companies at the very forefront of making the necessary emission reductions.”

Hervey-Bathurst added:

“Historically companies have not been rewarded for investing to help decarbonise more rapidly than their peers. As society and policymakers pivot towards penalising inactivity and rewarding the companies that support tackling climate change, these investments will change from being a cost to a competitive advantage. We believe climate leaders will create more value while exhibiting lower risk.”