Skip to main content
main content, press tab to continue
Article | Investments Quarterly ideas Exchange

Preparing Buy & Maintain credit portfolios for net zero: Start now but be thoughtful

August 31, 2021

As the nature of the strategy is to hold bonds to maturity, it is therefore necessary that they are not only climate aware but help towards the transition to net zero.
Investments
N/A

As more defined benefit funds move down the de-risking path and require liability-aware cashflows, the allocations to credit, and Buy & Maintain, have increased. Given the nature of the strategy is to hold bonds to maturity, it is therefore necessary that these products are not only climate aware but are also structured to aid clients in their transition to net zero.

We’ve been working with a manager to incorporate decarbonisation in a widely-used Buy & Maintain fund

While measuring and tracking climate risk presents a continued challenge, there has been movement in the right direction and beginning with a set of baseline metrics can help track progress and maintain momentum over time. We believe clients who spend the time now to evaluate and engage with managers will be better positioned in the long run to achieve critical climate transition goals. As an example of what can be done, we have been working with a manager to incorporate decarbonisation in a widely-used Buy & Maintain fund and improve its alignment with the Paris Agreement.

In this piece, we share how clients can begin engaging with their Buy & Maintain managers and offer a case study of a recent mandate we worked with a manager to create.

Notice for UK persons accessing this page

This page contains links to certain historical documents which were issued by Willis Towers Watson (WTW) as at the date specified on each linked document, in relation to the products offered by WTW. WTW believes that it is useful to investors to retain these documents on our website, for your information and reference purposes. Each such document was assessed as being compliant with prevailing regulatory requirements as at its date of issue, including that its contents are fair, clear and not misleading. Given that these documents were issued as at a specific point in time, WTW does not believe it would be appropriate to retrospectively amend those documents. As a result such documents have not been reviewed in light of any subsequent regulatory guidance or market practice including the FCA’s anti-greenwashing guidance (FG24/3). Any persons accessing this page, and the documents made available on this page, should not seek to rely on such documents and should use them only for information or reference purposes. Any investment decision should be based exclusively on the formal offer and subscription documents for the relevant investment product, and not these historical documents.

Download

Campaign

Our pledge: Net zero by 2050

We’re targeting net zero greenhouse gas emissions by 2050 in our fully discretionary delegated investment portfolios

Contact us