How we helped our client reduce their bond portfolio’s exposure to greenhouse gases by 35%
The background
Having already addressed climate risk in their equity portfolio, the natural next step for our client was to better-protect their bond investments from climate change risks.
Our solution
We started by assessing the capabilities of 15 of our highly rated investment managers, subsequently narrowed down to a shortlist of four. As part of this process, we reviewed example portfolios, the proposed investment approaches and back tested data.
The outcome
The client's new portfolio is well diversified, spread across a large number of sectors and issuers. The yield was left unchanged, whilst the carbon exposure within the portfolio was reduced by around 35%. We also negotiated a material fee reduction for our client as part of the switch – a “win win”.
