M&G has added a sustainability objective for its M&G (Lux) Global Select and M&G (Lux) Pan European Select strategies, which will see the funds transition to SFDR Article 9 classification.
Evolving investment strategies to deliver more sustainable outcomes is a key part of M&G's ten point sustainability plan and is another step towards achieving net zero carbon emissions across its investment portfolio by 2050.
Reflecting the changes, which will be effective from 30 July 2021, the funds will be renamed M&G (Lux) Global Sustain Paris Aligned and M&G (Lux) Pan European Sustain Paris Aligned, respectively. John William Olsen will continue to manage both funds.
The funds will have additional criteria which will align them with the goals of the Paris Agreement on Climate Change. Companies eligible for the two portfolios will either be:
- Low Carbon Companies with a weighted average carbon intensity lower than 50% of that of each Fund's respective benchmark
- Reducing Carbon Companies committed to having in place science-based targets to reach net zero by 2050 (SBTi)
As a result of the new focused climate approach, the overall weighted average carbon intensity of the portfolios will typically be more than 50% below that of their benchmark average.
The fund manager expects that over 90% of companies in the portfolios should have science based targets in place by 2025. Climate related factors, such as companies' positive contribution to lower CO2 emissions and get to net zero, will also play a role in the stock selection.
The fund manager expects that over 90% of companies in the portfolios should have science based targets in place by 2025. Climate related factors, such as companies' positive contribution to lower CO2 emissions and get to net zero, will also play a role in the stock selection.
There will be no change to the funds' current financial objective1 and investment philosophy, which will continue to invest in stocks of public listed companies across sectors, combining sustainable business models with proven competitive advantages that aim to protect their profitability.
John William Olsen, fund manager, said: "Climate change is arguably the greatest challenge of our time and achieving the Paris climate deal's objectives is of foremost importance. The changes we are announcing today aim to contribute to this goal and to deliver, we will drive even greater engagement with our investee companies. Active engagement is a key feature of our investment philosophy as active managers, one crucial to achieve real positive change."
Jack Daniels, chief investment officer M&G plc, said: "Sustainability is a core priority for M&G. As an asset owner and an asset manager we have set ourselves an ambitious agenda to ensure we meet the ever-increasing expectations of our clients, who want to make a difference through sustainable investment while seeking attractive returns that meet their financial needs. Today's changes are another step in this direction, building our Planet+ range of sustainable investment solutions and supporting our commitment for our entire investment portfolio to be net zero by 2050."
