Skip to Content
Designing a framework for investing in net-zero transition leaders

Designing a framework for investing in net-zero transition leaders

DEMYSTIFYING NET ZERO

Responsible capitalism, underpinned by a circular economy, must replace the current linear model that generates negative externalities through the free use and degradation of the Earth’s natural resources and ecosystem services.

"Whilst the challenge is great, the opportunity that accompanies it brings hope and means to take action today."
"The physical consequences of human-induced warming have already begun to materialise, but the worst outcomes are still avoidable if we reduce net global greenhouse gas emissions to zero by 2050, in line with a 1.5oC warming scenario."

The climate science has confirmed that without deep and rapid reductions in greenhouse gas emissions, our planet will exceed 2oC of warming above pre-industrial times (1850–1900) this century.

The physical consequences of human-induced warming have already begun to materialise, but the worst outcomes are still avoidable if we reduce net global greenhouse gas emissions to zero by 2050, in line with a 1.5oC warming scenario.

Governments and corporations will play a pivotal role in directing the climate onto a 1.5oC trajectory, but as individuals, we also have scope for taking action against climate change, including through our investment portfolios.

Investors can address transition and physical risks and capitalise on an investment opportunity by investing in companies that are fully committed to a net-zero emissions future, we call these net-zero transition leaders.

Identifying true net-zero transition leaders requires a robust selection process that is driven by data. We have developed a screening process that establishes which companies have:

1. CLIMATE RELEVANCE, meaning influence over sufficient emissions to make their absolute reductions impactful,

2. demonstrated INTENTIONALITY and

3. MEASURABILITY baked into their target framework and disclosures

An increasing number of investment funds also target net-zero transition leaders. We have identified the best practices in the space in order to select those managers that are most closely aligned with the climate transition. The guidelines articulated in this paper are voluntarily stringent as we want to set a high bar when screening managers to ensure they are on a credible transition pathway.

Companies with ambitious plans towards net-zero emissions will also allocate significant resources to, and accelerate demand for, the climate solutions that will enable the transition. While this paper will focus on investing in net-zero transition leaders, they are a key complement to investments in companies providing the solutions that will enable and accelerate the transition. For over 20 years, Pictet has been actively investing in many of these crucial themes, which are a key component to achieving the ultimate goal of the Paris Agreement.

Find the complete document to download here:

PAM - White paper_demystifying net zero PAM - White paper_demystifying net zero.pdf - 968 KB

Conference on : Climate Action Initiative: A framework for investors seeking action through their portfolios

To view the conference recording please click here.

About Pictet Group

The Pictet Group is a partnership of seven owner-managers, with principles of succession and transmission of ownership that have remained unchanged since foundation in 1805. It offers only wealth management, asset management, alternative investment solutions and related asset services. The Group does not engage in investment banking, nor does it extend commercial loans. With CHF 609 (USD 689, EUR 563, GBP 504) billion in assets under management or custody at 31 December 2020, Pictet is today one of the leading Europe-based independent wealth and asset managers for private clients and institutional investors.

Headquartered in Geneva, Switzerland, and founded there, Pictet today employs around 4,900 people. It has 30 offices worldwide, in Amsterdam, Barcelona, Basel, Brussels, Dubai, Frankfurt, Geneva, Hong Kong, Lausanne, London, Luxembourg, Madrid, Milan, Monaco, Montreal, Munich, Nassau, New York, Osaka, Paris, Rome, Shanghai, Singapore, Stuttgart, Taipei, Tel Aviv, Tokyo, Turin, Verona and Zurich.

 





Pictet Group
Banque Pictet & Cie SA
Route des Acacias 60
1211 Geneva 73 - Switzerland