Skip to main content

Global Climate Strategy

Investing with your planet in mind

A solution for your planet and portfolio

 

Our planet is in crisis. If we don’t act now to ensure its protected and preserved, the consequences could have lasting effects for generations to come. But that’s not all. Investors are also dealing with challenges, with market volatility, asset class correlations, and artificial intelligence trends on the rise. How does the Global Climate Strategy invest with climate considerations in mind?

Back to top

Our planet’s challenges are becoming investor problems

  • Physical risks

    More frequent and extreme climate events cause billions in damage every year.

  • Transition risks

    Businesses slow to change will face increasing fines and regulatory scrutiny.

  • Stranded assets

    Carbon-generating assets are becoming obsolete due to actions against climate change.

But there are tools to solve these challenges

  • The Paris Agreement

    A legally binding international treaty on climate change, with the goal to hold “the increase in the global average temperature to well below 2°C above pre-industrial levels” and pursue efforts “to limit the temperature increase to 1.5°C above pre-industrial levels.”

  • Science Based Targets

    Science based targets provide companies with a clearly-defined path to reduce emissions in line with the Paris Agreement goals. More than 4,000 businesses around the world are already working with the Science Based Targets initiative (SBTi).

     

Aligning our fundamental analysis framework

Our goal is to combine sustainability considerations with in-depth analysis and qualitative, economic, and financial assessments.

  • Company analysis

    • Management assessment
    • Economic earning ranges
    • Capital structure
    • Reinvestment opportunities and capital discipline

  • Industry analysis

    • Structure and trends
    • Competitive nature of industry
    • Barriers to entry
    • Legislative environment

  • Economic analysis

    • Economic growth, business-cycle, interest rates
    • Global security valuations, liquidity, global fund flows
    • Investor sentiment
Back to top

Introducing the Global Climate Strategy

At the intersection of your portfolio and planet—the Global Climate Strategy uses the Paris Agreement and SBTs as a framework for its stock selection process. By combining both fundamental and environmental analysis, the strategy seeks to invest in attractively valued, quality companies that are making positive contributions to climate change.

  • Fundamental

    • Measures quality with cash flow return on invested capital 
    • Uses sustainable free cash flow to reveal economic reality

  • Environmental

    • Measures climate leadership with climate assessments

Investing in climate leaders through a pillared approach

  • Companies reducing their emissions (SBTs)1

     

  • Companies offering clean tech solution

  • Companies with lower emissions3

     

  • Change in average global temperatures above preindustrial levels by 21004

     

Which investments are

targeted?

  • Carbon intensity at least 50% lower than the benchmark
  • GHG intensity reduction targets are set
  • Companies in compliance with UN Global Compact Principles
  • Green revenue exposure higher than the benchmark
  • Limited exposure to sectors highly exposed to climate change

Which investments are 

avoided? 

  • Oil 
  • Gas
  • Tobacco
  • Coal 
  • Weapons

In collaboration with our ESG experts

Blending active management with sustainable oversight

Source: Manulife Investment Management, as of June 30, 2023. For illustrative purposes only.

And we don’t just talk the talk

Many companies claim they're reducing carbon emissions, but we don’t take this at face value.

  • Our outcome-based engagement framework

  • Ensure companies have a record of reducing carbon emissions

  • Monitor carbon reductions and assess corporate actions

  • Review annually, hold companies accountable and divest if necessary

Outcome-based engagement is key

  • Conversations with management
  • Taking matters to the board
  • Shareholder proxy voting
Learn more about our portfolio and our dedicated team of experts.
Back to top

Related viewpoints

October 19, 2023

It’s never too early to think long term—how investors can align with net zero by 2050

Alyson J. Slater

Alyson J. Slater,  Managing Director, Head of Sustainable Investment Canada, Public Markets Manulife Investment Management

Patrick Blais, CFA, FSA

Patrick Blais, CFA, FSA ,  Senior Portfolio Manager, Fundamental Equity Team, Manulife Investment Management Manulife Investment Management

Many countries, cities, companies, and other institutions have joined forces to reduce global GHG emissions, but we believe investors also have a crucial role to play in achieving net zero by 2050. We expand on three key elements.
Read more

January 22, 2021

Using the Paris Agreement on climate change as a long-term investment framework

Patrick Blais, CFA, FSA

Patrick Blais, CFA, FSA ,  Senior Portfolio Manager, Fundamental Equity Team, Manulife Investment Management Manulife Investment Management

Margaret Childe

Margaret Childe,  Former Head of ESG Research and Integration, Canada Manulife Investment Management

Investors have a vital part to play in ensuring corporations help meet the required reductions in carbon emissions set out by the Paris Agreement and in doing so, can also enhance returns.
Read more

May 10, 2023

Bank on it: the state of Canadian financial institutions in the wake of bank failures abroad

Steve Bélisle, CFA

Steve Bélisle, CFA,  Senior Portfolio Manager, Fundamental Equity Team, Manulife Investment Management Manulife Investment Management

Patrick Blais, CFA, FSA

Patrick Blais, CFA, FSA ,  Senior Portfolio Manager, Fundamental Equity Team, Manulife Investment Management Manulife Investment Management

The financial community was rocked by a string of bank failures in March. The failures of Silicon Valley Bank and Signature Bank in the United States could have been seen as isolated events, given their significant ties to the tech community that had seen a major downturn in recent months. But investors were rattled even further when Credit Suisse, one of the 30 global systemically important banks, was acquired by rival UBS to prevent the former’s collapse, followed weeks later by the collapse of First Republic Bank, which became the second-largest bank failure in U.S. history. The banking community was put on notice, including in Canada, where banks play a huge role in our economy.
Read more

The material contains information regarding the investment approach described herein and is not a complete description of the investment objectives, risks, policies, guidelines or portfolio management and research that supports this investment approach. Any decision to engage Manulife Investment Management should be based upon a review of the terms of the prospectus, offering documents or investment management agreement, as applicable, and the specific investment objectives, policies and guidelines that apply under the terms of such agreement. There is no guarantee investment objectives will be met. The investment process may change over time. The characteristics set forth above are intended as a general illustration of some of the criteria the strategy team considers in selecting securities for client portfolios. Client portfolios are managed according to mutually agreed upon investment guidelines.

This information has been provided by Manulife Investment Management. All material is compiled from sources believed to be reliable and correct but accuracy cannot be guaranteed. This is not to be construed as an offer to buy or sell any financial instrument nor does it constitute an offer or invitation to invest in any fund managed by Manulife Investment Management and has not been prepared in connection with any such offer. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities and sectors listed.

References to securities, transactions or holdings should not be considered a recommendation to purchase or sell a particular security and there is no assurance that, as of the date of publication, the securities remain in the portfolio. Additionally, it is noted that the securities or transactions referenced do not represent all of the securities purchased, sold or recommended during the period referenced and there is no guarantee as to the future profitability of the securities identified and discussed herein.

The indices cited are widely accepted benchmarks for investment performance within their relevant regions, sectors or asset classes, and represent non managed investment portfolio.