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Fund Name(s):
  • Pictet Global Environmental Opportunities Fund
Fund Name SRI Style Product Region Asset Type Launch Date

Pictet Global Environmental Opportunities Fund
Environmentally Focused SICAV/Offshore* Global Equity 01/10/2014

Fund Size: £6513.00m

Total screened & themed / SRI assets: £108000.00

Total Responsible Ownership assets: £202000.00

Total assets under management: £202000.00

As at: 31/03/23

Contact: Contact us: lrichards@pictet.com

Overview

Our Global Environmental Opportunities strategy targets capital appreciation by investing in companies who seek to solve environmental challenges through innovation, technology and intelligent use of natural resources. We invest in companies that make a substantial active contribution to solving environmental challenges by providing solutions to others, rather than companies only focusing on minimizing the environmental impact of their own operations.

 

Filters

Fund information

Sustainability

Environmental policy

Sustainability policy

Limits exposure to carbon intensive industries

Resource efficiency policy or theme

Sustainable transport policy or theme

Sustainability theme or focus

Environmental damage and pollution policy

Favours cleaner, greener companies

UN Global Compact linked exclusion policy

Sustainability focus

UN Sustainable Development Goals (SDG) focus

Report against sustainability objectives

Encourage more sustainable practices through stewardship

Circular economy theme

Transition focus

Nature & Biodiversity

Responsible palm oil policy

Genetic engineering exclusion

Nature / biodiversity protection policy

Water stewardship policy

Climate Change & Energy

Nuclear exclusion policy

Coal, oil & / or gas majors excluded

Climate change / greenhouse gas emissions policy

Invests in clean energy / renewables

Fracking and tar sands excluded

Arctic drilling exclusion

Energy efficiency theme

Encourage transition to low carbon through stewardship activity

Fossil fuel exploration exclusion - direct involvement

Fossil fuel exploration exclusion – indirect involvement

Targeted Positive Investments

EU Sustainable Finance Taxonomy holdings 5-25% of fund assets

EU Sustainable Finance Taxonomy holdings >25% of fund assets

Invests >25% of fund in environmental/social solutions companies

Invests >50% of fund in environmental/social solutions companies

Human Rights

Human rights policy

Child labour exclusion

Responsible supply chain policy or theme

Oppressive regimes (not free or democratic) exclusion policy

Social / Employment

Social policy

Diversity, equality & inclusion Policy (fund level)

Labour standards policy

Favours companies with strong social policies

Mining exclusion

Meeting Peoples' Basic Needs

Green infrastructure focus

Banking & Financials

Banking exclusion

Exclude banks with significant fossil fuel investments

Financial institutions exclusion

Exclude banks that finance fossil fuels extraction

Governance & Management

Governance policy

Anti-bribery and corruption policy

Avoids companies with poor governance

Encourage board diversity e.g. gender

UN sanctions exclusion

Encourage higher ESG standards through stewardship activity

Fund Governance

ESG integration strategy

Employ external (fund) oversight or advisory committee

How The Fund Works

Balances company 'pros and cons' / best in sector

Strictly screened ethical fund

Positive selection bias

Negative selection bias

Norms focus

Combines norms based exclusions with other SRI criteria

Combines ESG strategy with other SRI criteria

ESG weighted / tilt

Focus on ESG risk mitigation

Significant harm exclusion

SRI / ESG / Ethical policies explained on website

Assets mapped to SDGs

All assets (except cash) meet published sustain'y criteria

Impact Methodologies

Aims to generate positive impacts (or 'outcomes')

Measures positive impacts

Positive environmental impact theme

Positive social impact theme

Invests in environmental solutions companies

Invests in social solutions companies

Invests in sustainability / ESG disruptors

Described as an ‘impact investment fund’

Aim to deliver positive impacts through engagement

Over 50% in assets providing environmental or social ‘solutions’

Labels & Accreditations

RSMR rated (OEIC funds only)

Eurosif Transparency

SFDR Article 9 fund / product (EU)

Intended Clients & Product Options

Intended for investors interested in sustainability

Intended for clients who want to have a positive impact

Available via an ISA (OEIC only)

Fund management company information

About The Business

ESG / SRI engagement (AFM company wide)

Responsible ownership / stewardship policy or strategy (AFM company wide)

Responsible ownership policy for non SRI funds (AFM company wide)

Responsible ownership / ESG a key differentiator (AFM company wide)

Sustainable property strategy (AFM company wide)

Vote all* shares at AGMs / EGMs (AFM company wide)

Boutique / specialist fund management company

Integrates ESG factors into all / most fund research

In-house diversity improvement programme (AFM company wide)

Senior management KPIs include environmental goals (AFM company wide)

Invests in newly listed companies (AFM company wide)

Invests in new sustainability linked bond issuances (AFM company wide)

Offer structured intermediary training on sustainable investment

Resources

In-house responsible ownership / voting expertise

Employ specialist ESG / SRI / sustainability researchers

Use specialist ESG / SRI / sustainability research companies

Collaborations & Affiliations

PRI signatory

Climate Action 100+ or IIGCC member

Fund EcoMarket partner

GFANZ member (AFM company wide)

UN Principles of Responsible Banking framework signatory-co wide

TNFD forum member (AFM company wide)

Investment Association (IA) member

Accreditations

UK Stewardship Code signatory (AFM company wide)

Engagement Approach

Regularly lead collaborative ESG initiatives (AFM company wide)

Engaging on climate change issues

Engaging with fossil fuel companies on climate change

Engaging to reduce plastics pollution / waste

Engaging to encourage responsible mining practices

Engaging on biodiversity / nature issues

Engaging to encourage a Just Transition

Engaging on human rights issues

Engaging on labour / employment issues

Engaging on diversity, equality and / or inclusion issues

Engaging on governance issues

Engaging on mental health issues

Engaging on responsible supply chain issues

Company Wide Exclusions

Coal exclusion policy (group wide coal mining exclusion policy)

Controversial weapons avoidance policy (AFM company wide)

Fossil fuel exclusion policy (AFM company wide)

Climate & Net Zero Transition

Encourage carbon / greenhouse gas reduction (AFM company wide)

Net Zero commitment (AFM company wide)

Working towards a ‘Net Zero’ commitment (AFM company wide)

Carbon offsetting - offset carbon as part of our net zero plan (AFM company wide)

In-house carbon / GHG reduction policy (AFM company wide)

Publish 'CEO owned' Climate Risk policy (AFM company wide)

Net Zero - have set a Net Zero target date (AFM company wide)

Committed to SBTi / Science Based Targets Initiative

Transparency

Publish full voting record (AFM company wide)

Publish responsible ownership / stewardship report (AFM company wide)

Full SRI policy information on company website

Paris Alignment plan publicly available (AFM company wide)

Net Zero transition plan publicly available (AFM company wide)

Sustainability transition plan publicly available (AFM company wide)

Policy

The investment theme defines our long-term strategic orientation and sustainability objectives.

Investment themes are identified based on our megatrend framework.

The strategy aims to capture investment opportunities across all areas of the global industry, whilst making a positive contribution towards a more sustainable world. The strategy focuses on the following areas:

  • Energy efficiency
  • Pollution control
  • Water supply & technology
  • Waste management & recycling
  • Sustainable agriculture & forestry
  • Dematerialized economy

 

The companies’ business models must have a low environmental impact, as well as driving & benefitting from development of environmental solutions. We only select companies that make a substantial ‘active’ contribution to solving environmental challenges. This is measured by the strategic importance of environmentally related products and services within the company and by the quality and amount of R&D spent in the environmental domain.

In order to be eligible in the portfolio, at least 20% of the activities of the firm must be related to products and services actively solving environmental challenges.

A dedicated Advisory Board helps the investment managers to track the evolution of the theme and to identify future trends in technology, public policy, and consumption patterns. The Board also helps defining new theme segments.

Board members are recognized experts in their respective domain; they often come from academia, NGOs or the private sector.

Process

Our investment approach uses a unique scientific framework for the purpose of universe construction. The  framework – Planetary Boundaries – was first published in Nature magazine in 2009 (by Johan Rockström (Stockholm Resilience Centre)). It represents the state of the art in terms of the current scientific consensus regarding which environmental challenges matter most. The planetary boundaries framework identifies nine key environmental dimensions (water, climate change, biodiversity, landuse, nitrogen & phosphorous cycle, ocean acidification, ozone depletion, aerosol loading and chemical pollution) and specifies the respective thresholds that humanity shall not cross, lest it is to cause irreversible environmental damage with potentially catastrophic consequences. The area within the boundaries, where human activities can take place safely is called the ‘safe operating space’. We relate planetary boundaries and safe operating space to subindustries and to individual companies.

 

This allows us to understand how a company’s products and services, taken over their entire life cycle, impact on the nine key environmental dimensions. We can thus see whether a company’s activities lie within the safe operating space, and whether its business model is rather forfeited or favoured by stricter environmental constraints in the future. We only invest in companies within the safe operating space that provide at the same time make an ‘active’ contribution to solving environmental challenges.

 

We identify an initial universe of listed companies active in the environmental value chain. Out of 40’000 global companies, approx. 3’500 operate within the safe operating space as defined by the Planetary Boundaries framework.

 

Only companies with sufficient exposure to environmental solutions are eligible for investment. This includes areas such as energy efficiency, pollution control, water supply & technology, waste management & recycling, sustainable agriculture & forestry and the dematerialized economy. 400 of the firms operating within the safe operating space also make an active contribution to solving environmental challenges. These 400 companies are our investable universe.

 

We include companies in the investable universe only if at least 20% of the enterprise value (or sales, EBIT, EBITDA, or similar measures) is derived from theme-related activities (“purity” to the theme).

 

When defining the investment universe of Thematic strategies, we systematically exclude stocks that have negative impacts on the environment or society. If a company’s revenues generated by such activities are above the threshold, the company is excluded from the universe.

 

We also exclude companies in severe material breach of UN Global Compact Principles on human rights, labour standards, environmental protection and anti-bribery/corruption.

 

Exclusions are based on reliable sources gathered from reputable third-party research providers. Pictet AM retains full discretion over exclusions and always reserves the right to deviate from third party information on a case by case basis.

We monitor the exposure to all activities that might be perceived as controversial by some investors. We use Sustainalytics as our external data provider and enhance it with company disclosures and our own research.

Resources, Affiliations & Corporate Strategies

Pictet Asset Management has a dedicated ESG Team which leads and co-ordinates implementation of our responsible investment policy, including ESG integration in investment processes, ownership practices, risk management and reporting tools. The ESG Team reports directly to Sébastien Eisinger, Managing Partner Pictet Group, Co-CEO Pictet Asset Management and Head of Investments.

Key responsibilities include:

Investments

  • Selection and due-diligence of external data providers in collaboration with investment teams and other B/Ls
  • Development of proprietary assessment methodologies (eg sector-specific “E&S Deep Dives”, sovereign issuers)
  • Integration of relevant ESG datasets in IT systems and definition of quality checks
  • Training and awareness raising of investment teams

Active Ownership

  • Definition of engagement strategy and proxy voting policy
  • Co-ordinate targeted engagements and participation in collaborative initiatives
  • Consensus building between investment teams on specific resolutions

Pictet Asset Management has been a signatory of the UNPRI since 2007. In addition, Pictet Asset Management actively participates in several investor initiatives aimed at sharing best practices between asset managers and owners and encouraging corporate disclosure on ESG issues. We are notably involved in the IIGCC (Institutional Investors Group on Climate Change), SSF (Swiss Sustainable Finance) and similar organisation in the UK, Germany and Spain.

 

Pictet Group and / or Pictet Asset Management supports and actively participates in international and national initiatives, organisations and partnerships including the below (which indicates Pictet’s involvement, year joined and key areas of focus) :

  • FNG, SpainSIF: Member (2006) - Transparency on ESG
  • UNPRI: Signatory (2007) - Transparency on ESG
  • Copenhagen Institute for Futures Studies (CIFS): Member, Research Partnership: Megatrends Research (2007) - Interdisciplinary academic disciplines
  • CDP: Member (2007) - Carbon
  • Swiss Climate Foundation: Corporate sponsor (2008) - Climate
  • Sustainable Finance Geneva (SFG): Institutional Partner (Pictet Group), President Strategy and Surveillance Committee (2008) - Promotion of sustainable finance
  • EFAMA (European Fund and Asset Management Association): Member of the Stewardship Market Integrity & ESG Investment Standing Committee (2010) - Fund and Asset Management
  • Climate Bond Initiative: Member of the Standards Board (2013) - Climate
  • IIGCC (Institutional Investors Group on Climate Change): Member of the Adaptation & Resilience Working Group (2013) - Climate
  • FTSE Environmental Markets: Member of the Advisory Committee (2013) - Environment
  • Swiss Sustainable Finance (SSF): Founding member (2014) - Promotion of the integration of sustainability in the financial industry
  • JP Stewardship Code: Signatory (2014) - Stewardship standards
  • Stockholm Resilience Centre (SRC): Research Partnership: Planetary Boundaries Framework (from 2014-ongoing), Mistra Biodiversity Finance programme (from 2022) (2014) - Core focus is to advance research in the frontier of biosphere-based sustainability science, applying a social ecological approach and resilience thinking
  • Investment Association: Member of the Sustainability and Responsible Investment Committee (2018) - Stewardship and Corporate governance
  • Climate Action 100+: Collaborative Engagement (2018) - Climate
  • Access to Nutrition Initiative (ATNI): Signatory (Pictet Group) (2018) - Delivery of nutritious, affordable foods.
  • Empower: Partnership (2019) - Youth at Risk
  • UNEP Finance Initiative: Signatory (Pictet Group) (2019) - Environment
  • Task Force on Climate-related Financial Disclosures (TCFD): Signatory (2020) - Consistent climate-related financial risk disclosures
  • FAIRR: Member (2021) - Animal agriculture
  • ICGN (International Corporate Governance Network): Member (2021) - Governance
  • Science Based Targets Initiative (SBTI): Signatory (Pictet Group) (2021) - Climate
  • Net Zero Asset Managers Initiative: Signatory (Pictet Group) (2021) - Climate
  • ESG Data Convergence Project: Steering Committee member (Pictet Group) (2021) - ESG metrics
  • UN Principles on Responsible Banking: Signatory (Pictet Group) (2021) - Sustainable/responsible banking
  • UK Stewardship Code 2020: Signatory (2022) - Stewardship standards
  • Institute of International Finance (IIF): Research Partnership: Bonds that build back better (2022) - Green, transition, social, sustainability & sustainability-linked bonds
  • Responsible Investing Association (RIA): Member (2022) - Canada's industry association for responsible investment
  • Ceres Valuing Water Finance Initiative: Signatory (Pictet Group) (2022) - Water
  • Finance for Biodiversity Foundation: Member (Pictet Group); participants in the Impact Assessment and Engagement Working Groups. (2022) - Biodiversity
  • Taskforce for Nature-related Financial Disclosures (TNFD): Member of TNFD Forum (Pictet Group) (2022) - Risk management and disclosure framework on nature-related issues
  • UN Global Compact: Signatory (Pictet Group) (2022) - Global sustainability principles

Source: Pictet Asset Management, [April 2023]

 

Other industry associations:

  • Asset Management Association Switzerland (AMAS): Member (Pictet Group), Member of the Distribution, Taxes Specialist Committees (1993) - Swiss Asset Management industry development
  • German Investment Funds Association (BVI): Member (2004) - German Asset Management industry development
  • International Capital Markets Association (ICMA): Member (xx) Securities market

 

Furthermore, Pictet, together with Swiss Sustainable Finance, was leading an initiative to put pressure on index providers to remove controversial weapon manufacturers from mainstream indices. The initiative, launched in August 2018, secured the backing of 174 signatories controlling over USD 9.7 trillion and including international asset owners and managers (as of January 2020). This initiative has now been closed due to inclusion of controversial weapons exposure disclosures in draft RTS and EU Benchmarking regulation.

 

Literature

Last amended: 25/01/24 10:45

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05/05/2024