Hurricanes, droughts... When it comes to environmental issues, it is clear that humanity is now facing a real climate emergency. The numerous scientific reports, such as those published by the IPCC (Intergovernmental Panel on Climate Change), attest to the fact that there is no pause in climate change. It is still possible to act to preserve the future of the planet and generations, particularly in terms of investment.
When investing, it is best to be flexible and take a pragmatic approach. This is even more true when it comes to addressing the challenges of climate change. Realistically, investing only in exemplary companies will not fully achieve the relevant reduction in greenhouse gas emissions. Of course, we cannot do without the players in the renewable energy industry. But we must go further.
The stakes are high as the effects of climate change are evolving faster than expected, leading to more natural disasters around the world, such as the near-50°C heatwave that hit Canada in June 2021. In the latest part of its sixth assessment report, published in April, the IPCC1 highlighted solutions for reducing greenhouse gas emissions. It is still possible to reduce emissions by 50% by 2030, but on one condition: act now.
Replace fossil fuels with low carbon or neutral energies
Capture CO2 emissions
Energy efficiency & sustainable consumption
Faced with this problem, we at Carmignac have developed an approach based on three main axes aiming to invest in the most virtuous players as well as in the companies that we believe could have the greatest impact.
We invest not only in green energy suppliers but also in companies that play a key role in the energy transition, those that are CO2 emitters but that will eventually play a very important role in decarbonising the economy by transforming their activities. Indeed, we want to have a real impact by encouraging these major players to reduce their carbon emissions through our engagement and dialogue with them. Finally, we finance industries that provide innovative solutions that have an indirect impact on CO2 reduction (building insulation companies, circular economies, etc.).
Our approach illustrated by case studies
Responsible investment, a key factor for action
Today, the finance sector clearly appears to be a major player in the ecological and energy transition by responding to the problem of insufficient funding to deal with climate change. Within the asset management industry, for example, we have been witnessing for several years now a massive consideration of extra-financial criteria, which are now as important as financial ratios within fundamental analysis.
While Carmignac has integrated environmental, social and governance (ESG) criteria since its inception, the emphasis is now on our engagement through dialogue with companies in order to lead them towards more sustainable solutions, our objective being to ultimately have a positive contribution to the environment and society. To this end, we have developed a specific engagement policy with key players in the transition process, involving enhanced and more regular exchanges.
1Part III of the IPCC Sixth Assessment Report : Mitigation of Climate Change
Our contribution to the energy transition
Carmignac Portfolio Green Gold A EUR Acc
Recommended minimum investment horizon
Lower risk Higher risk
Potentially lower return Potentially higher return
EQUITY: The Fund may be affected by stock price variations, the scale of which is dependent on external factors, stock trading volumes or market capitalization.
COMMODITIES: Changes in commodity prices and the volatility of the sector may cause the net asset value to fall.
CURRENCY: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments.
DISCRETIONARY MANAGEMENT: Anticipations of financial market changes made by the Management Company have a direct effect on the Fund's performance, which depends on the stocks selected.
The Fund presents a risk of loss of capital.