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    Managing carbon emissions in buy-and-maintain corporate bond portfolios

    Managing carbon emissions in buy-and-maintain corporate bond portfolios

    13 September 2022 Responsible investment
    Decarbonising high-quality fixed income portfolios is becoming a priority for UK pension schemes.

    Claire Bews, Integrated Solutions Credit Portfolio Manager, examines the implications of doing so and how different approaches to emissions could result in radically different allocations.

    Claire describes the carbon metrics Insight uses, and the pros and cons of using them to construct portfolios. She also covers how we are helping clients think about the alignment of their portfolios with the Paris Climate Accord.

    Questions answered

    • What are the climate reporting requirements for UK pension schemes?
    • What are the common carbon emissions metrics?
    • What are Scope 1, 2 and 3 emissions?
    • How does each Scope vary by size and coverage in the sterling corporate bond universe?
    • What is the carbon intensity sweet spot for long-term fixed income investors?
    • What are the three most common net-zero frameworks?

    Key lessons

    • Be cautious of building a low-carbon intensity portfolio based on Scope 1 and 2 emissions only
    • Rather than automatically exclude, support suitable high carbon emitting issuers to enable transition to a low carbon economy

     

    See the second half of this video series: Helping clients to align bond portfolios to the Paris climate accord

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