Fulcrum Asset Management has said that the strategic equity component of its flagship diversified absolute return strategy is now fully climate-aligned.

The move means that approximately 10% of the assets in their Diversified Absolute Return and Diversified Core Absolute Return strategies are now invested in companies whose past and potential emissions performance are compatible with the goals of the Paris Agreement on climate change.

Fulcrum says this has been achieved by doubling allocations to its Fulcrum Climate Change strategy which only invests in stocks with an ‘implied temperature’ of below 2°C, while maintaining an average temperature below 1.5⁰C for the overall strategy. The strategy provides a way for asset allocators to climate-align a major part of their equity allocation while maintaining a highly diversified exposure across sectors and regions.

Between July 2022 and June 2023, the firm overall has cast over 900 votes against directors at investee companies and over 600 votes against pay packages, due to concerns around sustainability such as the lack of emissions targets.

Matt Roberts, Partner at Fulcrum Asset Management and Chair of Fulcrum’s Responsible Investment Committee says, “Aligning our strategic equity component with the goals of the Paris Agreement has been a huge piece of work across our teams. We launched our pioneering Fulcrum Climate Change strategy a little over three years ago now and integrating that equity exposure into our core diversified strategies (DAR and DCAR) has been a natural next step.”

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