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Low-Carbon Investment Strategies

Bart GOOSENS * Directeur mondial de la gestion quantitative actions, Candriam.
Sébastien JALLET ** Gérant de fonds senior, gestion quantitative actions, Candriam.
David CZUPRYNA *** Responsable des portefeuilles clients ESG et responsable du développement ESG, Candriam. Contact : isabelle.cabie@candriam.com.


More and more investors the world over are basing their investment choices on an appreciation of climate risk. Several approaches have been developed to include the issue in the investment analysis and portfolio construction process. In this article, we analyse two standard strategies for optimising a portfolio's carbon footprint: exclusion and optimisation. Our simulations show that optimisation considerably reduces a portfolio's CO2 content, without increasing portfolio risk and yet with a low sectorial bias. Optimisation both enhances the portfolio's overall ESG risk profile while addressing investors' climate-related qualms. The optimisation approach should, in our opinion, shortly become the norm.


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