UBS Asset Management and Aon have launched the UBS Global Emerging Markets Equity Climate Transition Fund.

The fund will use a rules-based strategy investing in emerging market companies and will apply positive and negative tilts, when compared to a broad emerging market index, towards stocks relating to climate change and aiming to decarbonize over time in line with the IPCC’s 1.5°C scenarios. The fund invests in emerging market companies that are supporting the transition to a low-carbon economy. Aon will seed the fund with a total of GBP 190m.

The fund will also gain exposure towards companies that align with the UN Sustainable Development Goals relating to health, clean energy, decent work, responsible consumption and production, and climate action.

Joanna Sharples, CIO, Aon DC Solutions says, !Clients and members expect us to support the low-carbon economy and in an innovative, cost-efficient way. But that’s something we couldn’t previously do with our Emerging Markets exposure. Now, UBS Asset Management’s strong sustainable investing and indexing capabilities have enabled us to create another innovative product which we hope will help meet our members’ needs.”

Ian Ashment, Head of Portfolio Engineering and Trading, UBS AM says, “We are proud to once again collaborate with Aon to provide pension plans with the ability to mitigate climate-related investment risks in emerging markets, while also considering social aspects. The transition to a low-carbon economy is vital to reduce the risk of climate change, and this Fund brings together our proprietary Climate Aware framework and global stewardship program to collaborate with companies to work towards a lower carbon future, linking climate action with inclusive growth.”

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