Large corporates account for nearly one fifth of total global carbon emissions. We believe a blue chip corporate credit strategy like this one is a good place to focus our attention as we look to support Net Zero goals. This fund follows a Net Zero approach based on an investment framework set out by the Paris Aligned Investment Initiative (PAII). It aims to contribute to the achievement of Net Zero by 2050 or sooner, while seeking to deliver income and long-term capital growth.
Our Net Zero assessments cover over two thirds of the market value of the Bloomberg Global Aggregate Corporate Index.
We are aiming for half of the fund’s assets to be aligned to a Net Zero pathway by 2027.
The team manages $11 billion in global investment grade assets.1
All sectors will need to decarbonise if we’re to achieve Net Zero by 2050. In recognition of this, we allocate to some of the highest emitting sectors with the aim of ensuring progress through commitments to Net Zero. To remain eligible for the fund, companies must demonstrate progress in addressing their emissions in line with the Paris temperature goals. We believe this is the best way to effect real-world change.
Issuers that are ill-prepared for transition, or incompatible with a Net Zero economy, will likely suffer defaults, losses and impairments. We believe that allocating to climate-resilient companies will improve the long-term credit quality of the fund.
We look beyond regional biases for a truly global approach. By examining opportunities from around the world, we look to create portfolios that can provide our clients with consistent income and capital growth.
Unlike traditional corporate bond managers, we don’t just focus on market timing and security selection. Instead, we go further. We identify the big themes driving economies and use this analysis to help drive our issuer selection. These themes could include things like:
We also implement “macro overlays” to manage the overall risk of the fund through the cycle. This involves using derivatives, which help reduce transaction costs compared to trading in and out of corporate bonds.
Access the Invesco Net Zero Global Investment Grade Corporate Bond Fund product page to view KIDs/KIIDs and factsheets.
The lead managers for the fund are Lyndon Man and Luke Greenwood. They have been the lead portfolio managers of global investment grade credit since 2013. Together they have a combined 50+ years of industry experience and have navigated a broad range of economic cycles. They are supported by Matthew Henly and draw on the resources of Invesco’s Global Fixed Income platform and Global Sustainable Investing Services team.
Net Zero is only possible if we collaborate. We partner with clients to understand their goals, and engage with investee companies to ensure progress to drive real-world change.
Lyndon Man
Fund Manager
“Net Zero” refers to a state where greenhouse gas (GHG) emissions are balanced by GHG removals from the atmosphere. The “net” in Net Zero is important because it will be difficult to reduce all emissions to zero on the required timescale. As well as deep and widespread cuts in emissions, there will likely be a need to scale up GHG removals. The Paris Agreement underlines the urgency of Net Zero, requiring states to aim to limit global warming to well below 2°C, and preferably to 1.5°C.
The Paris Agreement is a legally binding international treaty on climate change adopted in December 2015. Its goal is to limit global warming to well below 2°C, preferably to 1.5°C, compared to pre-industrial levels.
Net Zero Asset Managers Initiative is a network of asset managers. Invesco joined the initiative in March 2021.
The Paris Aligned Investment Initiative (PAII) provides a common set of recommended actions, metrics and methodologies through which investors can maximise their contribution to achieving global Net Zero global emissions by 2050 or sooner. The PAII was established in May 2019 by the Institutional Investors Group on Climate Change. The PAII’s objective is to ensure investors can decarbonise investment portfolios and increase investment in climate solutions, in a way that is consistent with a 1.5°C Net Zero emissions future.
